10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended September 30, 2014

OR

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

Commission File Number: 0-20293

UNION BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

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

1051 East Cary Street

Suite 1200

Richmond, Virginia 23219

(Address of principal executive offices) (Zip Code)

(804) 633-5031

(Registrant’s telephone number, including area code)

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

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

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

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

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

The number of shares of common stock outstanding as of October 31, 2014 was 45,453,897.

UNION BANKSHARES CORPORATION

FORM 10-Q

INDEX

ITEM		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	2
	Consolidated Statements of Income for the three and nine months ended September 30, 2014 and 2013	3
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 and 2013	4
	Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2014 and 2013	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	6
	Notes to Consolidated Financial Statements	7
	Report of Independent Registered Public Accounting Firm	45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71
Item 4.	Controls and Procedures	73
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	74
Item 1A.	Risk Factors	75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 6.	Exhibits	76
	Signatures	77

ii

Glossary of Acronyms

ALCO	–	Asset Liability Committee
ALL	–	Allowance for loan losses
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
ATM	–	Automated teller machine
the Bank	–	Union First Market Bank
bps	–	Basis points
the Company	–	Union Bankshares Corporation
Dodd-Frank Act	–	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EPS	–	Earnings per share
Exchange Act	–	Securities Exchange Act of 1934
FASB	–	Financial Accounting Standards Board
Federal Reserve Bank	–	Federal Reserve Bank of Richmond
FDIC	–	Federal Deposit Insurance Corporation
FHLB	–	Federal Home Loan Bank of Atlanta
FRB or Federal Reserve	–	Board of Governors of the Federal Reserve System
GAAP	–	Accounting principles generally accepted in the United States
HELOC	–	Home equity line of credit
LIBOR	–	London Interbank Offered Rate
NPA	–	Nonperforming assets
OREO	–	Other real estate owned
OTTI	–	Other than temporary impairment
PCI	–	Purchased credit impaired
SEC	–	Securities and Exchange Commission
StellarOne	–	StellarOne Corporation
TDR	–	Troubled debt restructuring
UMG	–	Union Mortgage Group, Inc.

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

	September 30,		December 31,
	2014		2013
ASSETS		(Unaudited)		(Audited)
Cash and cash equivalents:
Cash and due from banks	$	112,891	$	66,090
Interest-bearing deposits in other banks		35,489		6,781
Money market investments		1		1
Federal funds sold		311		151
Total cash and cash equivalents		148,692		73,023
Securities available for sale, at fair value		1,095,636		677,348
Restricted stock, at cost		48,554		26,036
Loans held for sale, net		31,469		53,185
Loans, net of unearned income		5,171,003		3,039,368
Less allowance for loan losses		32,109		30,135
Net loans		5,138,894		3,009,233
Bank premises and equipment, net		138,549		82,815
Other real estate owned, net of valuation allowance		37,754		34,116
Core deposit intangibles, net		34,089		11,980
Goodwill		296,876		59,400
Other assets		223,821		149,435
Total assets	$	7,194,334	$	4,176,571
LIABILITIES
Noninterest-bearing demand deposits		1,204,343		691,674
Interest-bearing deposits		4,429,707		2,545,168
Total deposits		5,634,050		3,236,842
Securities sold under agreements to repurchase		33,517		52,455
Other short-term borrowings		195,000		211,500
Long-term borrowings		299,162		199,359
Other liabilities		54,932		38,176
Total liabilities		6,216,661		3,738,332
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000 and 36,000,000, respectively; issued and outstanding, 45,514,028 shares and 24,976,434 shares, respectively.		60,267		33,020
Surplus		651,178		170,770
Retained earnings		254,260		236,639
Accumulated other comprehensive income (loss)		11,968		(2,190	)
Total stockholders' equity		977,673		438,239
Total liabilities and stockholders' equity	$	7,194,334	$	4,176,571

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2014			2013			2014			2013
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest and dividend income:
Interest and fees on loans	$	62,340		$	38,895		$	184,996		$	116,806
Interest on federal funds sold		-			-			1			1
Interest on deposits in other banks		21			3			41			14
Interest and dividends on securities:
Taxable		3,883			1,849			11,391			5,856
Nontaxable		3,347			2,094			10,005			6,135
Total interest and dividend income		69,591			42,841			206,434			128,812
Interest expense:
Interest on deposits		3,027			3,371			7,833			11,033
Interest on federal funds purchased		3			26			49			62
Interest on short-term borrowings		108			62			373			170
Interest on long-term borrowings		1,974			1,524			6,226			4,533
Total interest expense		5,112			4,983			14,481			15,798
Net interest income		64,479			37,858			191,953			113,014
Provision for loan losses		1,800			1,800			3,300			4,850
Net interest income after provision for loan losses		62,679			36,058			188,653			108,164
Noninterest income:
Service charges on deposit accounts		4,458			2,474			13,281			7,093
Other service charges, commissions and fees		5,055			3,185			15,138			9,214
Gains on securities transactions, net		995			5			1,449			47
Gains on sales of mortgage loans, net of commissions		2,598			2,061			7,925			10,581
Losses on sales of bank premises		(79	)		(7	)		(384	)		(337	)
Other operating income		3,715			1,498			10,236			3,751
Total noninterest income		16,742			9,216			47,645			30,349
Noninterest expenses:
Salaries and benefits		26,060			17,416			83,726			53,294
Occupancy expenses		4,902			2,820			15,184			8,439
Furniture and equipment expenses		3,050			1,665			8,555			5,250
Communications expense		1,291			698			3,740			2,070
Technology and data processing		3,280			2,013			9,145			5,778
Professional services		1,400			795			3,897			2,183
Marketing and advertising expense		2,064			1,017			4,821			3,177
FDIC assessment premiums and other insurance		1,577			759			4,563			2,305
OREO and credit-related expenses		6,559			1,601			10,254			3,159
Amortization of intangible assets		2,391			921			7,462			2,912
Acquisition and conversion costs		1,695			473			19,524			1,393
Other expenses		5,652			3,954			16,306			11,955
Total noninterest expenses		59,921			34,132			187,177			101,915
Income before income taxes		19,500			11,142			49,121			36,598
Income tax expense		4,576			3,196			11,602			10,206
Net income	$	14,924		$	7,946		$	37,519		$	26,392
Earnings per common share, basic	$	0.33		$	0.32		$	0.81		$	1.06
Earnings per common share, diluted	$	0.33		$	0.32		$	0.81		$	1.06

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income	$	14,924		$	7,946		$	37,519		$	26,392
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges		(228	)		293			(431	)		1,049
Reclassification adjustment for losses included in net income (net of tax, $89 and $87 for the three months and $231 and $291 for the nine months ended September 30, 2014 and 2013)		164			161			428			540
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period (net of tax, $968 and $212 for the three months and $7,992 and $6,580 for the nine months ended September 30, 2014 and 2013)		1,798			(393	)		14,843			(12,220	)
Reclassification adjustment for (gains) losses included in net income (net of tax, $348 and $2 for the three months and $367 and $17 for the nine months ended September 30, 2014 and 2013)		(647	)		(3	)		(682	)		(30	)
Other comprehensive income (loss)		1,087			58			14,158			(10,661	)
Comprehensive income	$	16,011		$	8,004		$	51,677		$	15,731

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands, except share amounts)

	Common Stock			Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance - December 31, 2012	$	33,510		$	176,635		$	215,634		$	10,084		$	435,863
Net income - 2013								26,392						26,392
Other comprehensive loss (net of tax, $6,597)											(10,661	)		(10,661	)
Dividends on Common Stock ($.40 per share)								(9,296	)					(9,296	)
Stock purchased under stock repurchase plan (500,000 shares)		(664	)		(8,835	)								(9,499	)
Issuance of common stock under Dividend Reinvestment Plan (37,182 shares)		50			656			(706	)					-
Issuance of common stock under Equity Compensation Plans (16,845 shares)		21			248									269
Vesting of restricted stock under Equity Compensation Plans (12,120 shares)		16			(16	)								-
Net settle for taxes on Restricted Stock Awards (2,563 shares)		(3	)		(16	)								(19	)
Stock-based compensation expense					622									622
Balance - September 30, 2013	$	32,930		$	169,294		$	232,024		$	(577	)	$	433,671
Balance - December 31, 2013	$	33,020		$	170,770		$	236,639		$	(2,190	)	$	438,239
Net income - 2014								37,519						37,519
Other comprehensive income (net of tax, $7,625)											14,158			14,158
Issuance of Common Stock in regard to acquisition (22,147,874 shares)		29,457			520,066									549,523
Dividends on Common Stock ($.43 per share)								(19,020	)					(19,020	)
Stock purchased under stock repurchase plan (1,731,025 shares)		(2,303	)		(41,174	)								(43,477	)
Issuance of common stock under Dividend Reinvestment Plan (37,489 shares)		50			828			(878	)					-
Issuance of common stock under Equity Compensation Plans (67,057 shares)		89			983									1,072
Issuance of common stock for services rendered (14,374 shares)		19			343									362
Vesting of restricted stock under Equity Compensation Plans (14,707 shares)		20			(20	)								-
Net settle for taxes on Restricted Stock Awards (63,916 shares)		(85	)		(1,480	)								(1,565	)
Stock-based compensation expense					862									862
Balance - September 30, 2014	$	60,267		$	651,178		$	254,260		$	11,968		$	977,673

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Dollars in thousands)

	2014			2013
Operating activities:		(Unaudited)			(Unaudited)
Net income	$	37,519		$	26,392
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation of bank premises and equipment		8,160			4,542
Writedown of OREO		7,265			491
Amortization, net		18,351			10,675
Accretion and amortization related to acquisition, net		(7,870	)		-
Provision for loan losses		3,300			4,850
Gains on securities transactions, net		(1,449	)		(47	)
Decrease in loans held for sale, net		33,093			109,519
(Gains) losses on sales of other real estate owned, net		(128	)		224
Losses on bank premises, net		384			337
Stock-based compensation expenses		862			622
Issuance of common stock grants for services		362			-
Net decrease (increase) in other assets		12,115			(26,255	)
Net (decrease) increase in other liabilities		(3,791	)		7,266
Net cash and cash equivalents provided by operating activities		108,173			138,616
Investing activities:
Purchases of securities available for sale		(351,153	)		(177,948	)
Proceeds from sales of securities available for sale		273,447			42,843
Proceeds from maturities, calls and paydowns of securities available for sale		111,390			106,327
Net decrease (increase) in loans		100,844			(48,515	)
Net increase in bank premises and equipment		(5,262	)		(2,981	)
Proceeds from sales of other real estate owned		9,929			5,085
Improvements to other real estate owned		(262	)		(460	)
Cash acquired in bank acquisitions		49,989			-
Net cash and cash equivalents provided by (used in) investing activities		188,922			(75,649	)
Financing activities:
Net increase in noninterest-bearing deposits		100,629			51,298
Net decrease in interest-bearing deposits		(175,918	)		(124,140	)
Net (decrease) increase in short-term borrowings		(84,665	)		18,932
Net increase in long-term borrowings (1)		1,518			1,668
Cash dividends paid - common stock		(19,020	)		(9,296	)
Repurchase of common stock		(43,477	)		(9,499	)
Issuance of common stock		1,072			269
Taxes paid related to net share settlement of equity awards		(1,565	)		(19	)
Net cash and cash equivalents used in financing activities		(221,426	)		(70,787	)
Increase (decrease) in cash and cash equivalents		75,669			(7,820	)
Cash and cash equivalents at beginning of the period		73,023			82,902
Cash and cash equivalents at end of the period	$	148,692		$	75,082
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	21,210		$	16,258
Income taxes		12,400			7,900
Supplemental schedule of noncash investing and financing activities
Unrealized gain (loss) on securities available for sale	$	21,786		$	(18,846	)
Changes in fair value of interest rate swap loss		(3	)		1,589
Transfers from loans to other real estate owned		5,257			7,227
Transfers from bank premises to other real estate owned		10,866			988
Transactions related to bank and branch acquisitions
Assets acquired		2,959,212			-
Liabilities assumed		2,647,165			-
(1) See Note 6 "Borrowings" related to 2014 activity.
See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2014

1. ACCOUNTING POLICIES

Effective April 25, 2014, the Company changed its corporate name from Union First Market Bankshares Corporation to Union Bankshares Corporation. The name change was approved at the Company’s annual meeting of shareholders held April 22, 2014. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation.

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

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2013 Annual Report on Form 10-K. If needed, certain previously reported amounts have been reclassified to conform to current period presentation.

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU 2014-01, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this ASU should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this ASU are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted. The Company is currently assessing the impact that ASU 2014-01 will have on its consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, “Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently assessing the impact that ASU 2014-04 will have on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” The amendments in this ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results and include disposals of a major geographic area, a major line of business, or a major equity method investment. The new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. Additionally, the new guidance requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted. The Company does not expect the adoption of ASU 2014-08 to have a material impact on its consolidated financial statements.

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In June 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU applies to any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” most industry-specific guidance, and some cost guidance included in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To be in alignment with the core principle, an entity must apply a five step process including: identification of the contract(s) with a customer, identification of performance obligations in the contract(s), determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue when (or as) the entity satisfies a performance obligation. Additionally, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer have also been amended to be consistent with the guidance on recognition and measurement. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently assessing the impact that ASU 2014-09 will have on its consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. The new guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement. The amendments in the ASU also require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. Additional disclosures will be required for the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The amendments in this ASU are effective for the first interim or annual period beginning after December 15, 2014; however, the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted. The Company is currently assessing the impact that ASU 2014-11 will have on its consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The new guidance applies to reporting entities that grant employees share-based payments in which the terms of the award allow a performance target to be achieved after the requisite service period. The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Existing guidance in “Compensation – Stock Compensation (Topic 718)”, should be applied to account for these types of awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted and reporting entities may choose to apply the amendments in the ASU either on a prospective or retrospective basis. The Company is currently assessing the impact that ASU 2014-12 will have on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, “Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.” The amendments in this ASU apply to creditors that hold government-guaranteed mortgage loans and is intended to eliminate the diversity in practice related to the classification of these guaranteed loans upon foreclosure. The new guidance stipulates that a mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure if (1) the loan has a government guarantee that is not separable from the loan prior to foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the other receivable should be measured on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Entities may adopt the amendments on a prospective basis or modified retrospective basis as of the beginning of the annual period of adoption; however, the entity must apply the same method of transition as elected under ASU 2014-04. Early adoption is permitted provided the entity has already adopted ASU 2014-04. The Company is currently assessing the impact that ASU 2014-14 will have on its consolidated financial statements.

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In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period. If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2014-15 to have a material impact on its consolidated financial statements.

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2. ACQUISITIONS

On January 1, 2014, the Company completed the acquisition of StellarOne, a bank holding company based in Charlottesville, Virginia, in an all stock transaction. StellarOne’s common shareholders received 0.9739 shares of the Company’s common stock in exchange for each share of StellarOne’s common stock, resulting in the Company issuing 22,147,874 common shares at a fair value of $549.5 million. As a result of the transaction, StellarOne’s former bank subsidiary, StellarOne Bank, became a wholly owned bank subsidiary of the Company. On May 9, 2014, StellarOne Bank was merged with and into Union First Market Bank.

The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition. The following table provides a preliminary assessment of the assets purchased, liabilities assumed, and the consideration transferred (dollars in thousands, except share and per share data):

Statement of Net Assets Acquired (at fair value) and consideration transferred:

Fair value of assets acquired:
Cash and cash equivalents	$	49,989
Securities available for sale		460,892
Loans held for sale		11,377
Loans		2,238,981
Bank premises and equipment		69,618
OREO		4,319
Core deposit intangible		29,570
Other assets		94,466
Total assets	$	2,959,212
Fair value of liabilities assumed:
Deposits	$	2,479,874
Short-term borrowings		49,227
Long-term borrowings		98,697
Other liabilities		19,367
Total liabilities	$	2,647,165
Net identifiable assets acquired	$	312,047
Preliminary Goodwill (1)		237,476
Net assets acquired	$	549,523
Consideration :
Company's common shares issued		22,147,874
Purchase price per share of the Company's common stock (2)	$	24.81
Value of Company common stock issued	$	549,489
Value of stock options outstanding		34
Fair value of total consideration transferred	$	549,523

(1) - No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the community bank segment.

(2) - The value of the shares of common stock exchanged with StellarOne shareholders was based upon the closing price of the Company's common stock at December 31, 2013, the last trading day prior to the date of acquisition.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

- 10 -

Loans

The acquired loans were recorded at fair value at the acquisition date without carryover of StellarOne’s previously established allowance for loan losses. The fair value of the loans was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected on the loans and then applying a market-based discount rate to those cash flows. In this regard, the acquired loans were segregated into pools based on loan type and credit risk. Loan type was determined based on collateral type, purpose, and lien position. Credit risk characteristics included risk rating groups (pass rated loans and adversely classified loans), updated loan-to-value ratios and past due status. For valuation purposes, these pools were further disaggregated by maturity, pricing characteristics (e.g., fixed-rate, adjustable-rate) and re-payment structure (e.g., interest only, fully amortizing, balloon). If new information is obtained regarding facts and circumstances about expected cash flows that existed as of the acquisition date, management will adjust in accordance with accounting for business combinations.

The acquired loans were divided into loans with evidence of credit quality deterioration which are accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, (acquired impaired or PCI) and loans that do not meet this criteria, which are accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, (acquired performing). The fair values of the acquired performing loans were $2.1 billion and the fair values of the acquired impaired loans were $145.5 million. The gross contractually required principal and interest payments receivable for acquired performing loans was $2.5 billion. The best estimate of contractual cash flows not expected to be collected related to the acquired performing loans is $35.4 million.

The following table presents the acquired impaired loans receivable at the acquisition date (dollars in thousands):

Contractually required principal and interest payments	$	214,803
Nonaccretable difference		(34,696	)
Cash flows expected to be collected		180,107
Accretable difference		(34,653	)
Fair value of loans acquired with a deterioration of credit quality	$	145,454

Bank Premises

The fair value of StellarOne’s premises, including land, buildings, and improvements, was determined based upon independent third party appraisals performed by licensed appraisers in the market in which the premises are located. These appraisals were based upon the highest and best use of the underlying asset(s) with final values determined based upon an analysis of the cost, sales comparison, and income capitalization approaches for each property appraised. The Company also engaged independent appraisers to value the leasehold interests. The fair value of the leasehold interest was not material to the consolidated financial statements.

Core Deposit Intangible

The fair value of the core deposit intangible was determined based on a blended market approach and discounted cash flow analysis using a discount rate based on the estimated cost of capital for a market participant. To calculate cash flows, deposit account servicing costs (net of deposit fee income) and interest expense on deposits were compared to the cost of alternative funding sources available through the FHLB. The life of the deposit base and projected deposit attrition rates were determined using StellarOne’s historical deposit data.

Time Deposits

The fair value adjustment of time deposits represents a premium over the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar-term time deposits. The premium is being accreted into income using the sum-of-years digits method over the weighted average remaining life.

- 11 -

Long-term Borrowings

The Company assumed long-term borrowings in the form of FHLB advances and trust preferred capital notes. The fair value of the trust preferred capital notes assumed was valued using an income approach with consideration of the market approach. The contractual cash flows were projected and discounted using a prevailing market rate. The market rate was developed using a third party broker opinion, implied market yields for recent subordinated debt sales, and new subordinated debt issuances for instruments with similar durations and pricing characteristics. The fair value of FHLB advances represents contractual repayments discounted using interest rates currently available on borrowings with similar characteristics and remaining maturities.

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities were established for acquisition accounting fair value adjustments as the future amortization/accretion of these adjustments represent temporary differences between book income and taxable income.

The following table presents certain pro forma information as if StellarOne had been acquired on January 1, 2013. These results combine the historical results of StellarOne in the Company's Consolidated Statements of Income and, while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on January 1, 2013. In particular, no adjustments have been made to eliminate the amount of StellarOne’s provision for credit losses that would not have been necessary had the acquired loans been recorded at fair value as of January 1, 2013. The Company expects to achieve further operating cost savings and other business synergies, including branch closures, as a result of the acquisition which are not reflected in the pro forma amounts below (dollars in thousands):

	Three months ended		Nine months ended
	September 30, 2013		September 30, 2013
	(unaudited)		(unaudited)
Total revenues (net interest income plus noninterest income)	$	82,180	$	246,972
Net income	$	17,827	$	54,834

Acquisition-related expenses associated with the acquisition of StellarOne were $1.7 million and $19.5 million for the three and nine months ended September 30, 2014, and $473,000 and $1.4 million for the three and nine months ended September 30, 2013, respectively.  Such costs include legal and accounting fees, lease and contract termination expenses, system conversion, integrating operations, and employee severances, which have been expensed as incurred. 

A summary of acquisition-related expenses associated with the StellarOne acquisition included in the Consolidated Statements of Income is as follows (dollars in thousands): 

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Salaries and employee benefits	$	200	$	-	$	7,878	$	-
Professional services		122		473		3,717		1,393
Other costs of operations		1,373		-		7,929		-
Total	$	1,695	$	473	$	19,524	$	1,393

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3. SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2014 and December 31, 2013 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
September 30, 2014
U.S. government and agency securities	$	1,328	$	603	$	-		$	1,931
Obligations of states and political subdivisions		419,525		17,545		(1,413	)		435,657
Corporate and other bonds		79,069		264		(434	)		78,899
Mortgage-backed securities		562,229		8,605		(1,506	)		569,328
Other securities		9,823		33		(35	)		9,821
Total securities	$	1,071,974	$	27,050	$	(3,388	)	$	1,095,636
December 31, 2013
U.S. government and agency securities	$	1,654	$	499	$	-		$	2,153
Obligations of states and political subdivisions		255,335		6,107		(6,612	)		254,830
Corporate and other bonds		9,479		115		(160	)		9,434
Mortgage-backed securities		405,389		4,954		(2,981	)		407,362
Other securities		3,617		26		(74	)		3,569
Total securities	$	675,474	$	11,701	$	(9,827	)	$	677,348

Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. The FHLB requires the Bank to maintain stock in an amount equal to 4.5% of outstanding borrowings and a specific percentage of the Bank’s total assets. The Federal Reserve Bank requires the Bank to maintain stock with a par value equal to 6% of its outstanding capital. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $23.8 million and $6.7 million as of September 30, 2014 and December 31, 2013 and FHLB stock in the amount of $24.7 million and $19.3 million as of September 30, 2014 and December 31, 2013, respectively.

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

	Less than 12 months					More than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2014
Obligations of states and political subdivisions	$	5,156	$	(62	)	$	53,000	$	(1,351	)	$	58,156	$	(1,413	)
Mortgage-backed securities		142,368		(507	)		45,989		(999	)		188,357		(1,506	)
Corporate bonds and other securities		32,090		(154	)		4,477		(315	)		36,567		(469	)
Totals	$	179,614	$	(723	)	$	103,466	$	(2,665	)	$	283,080	$	(3,388	)
December 31, 2013
Obligations of states and political subdivisions	$	80,368	$	(5,504	)	$	8,886	$	(1,108	)	$	89,254	$	(6,612	)
Mortgage-backed securities		168,297		(2,806	)		24,254		(175	)		192,551		(2,981	)
Corporate bonds and other securities		6,804		(80	)		1,720		(154	)		8,524		(234	)
Totals	$	255,469	$	(8,390	)	$	34,860	$	(1,437	)	$	290,329	$	(9,827	)

As of September 30, 2014, there were $103.5 million, or 75 issues, of individual securities that had been in a continuous loss position for more than 12 months. Additionally, these securities had an unrealized loss of $2.7 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities. As of December 31, 2013, there were $34.9 million, or 23 issues, of individual securities that had been in a continuous loss position for more than 12 months. Additionally, these securities had an unrealized loss of $1.4 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities.

The following table presents the amortized cost and estimated fair value of securities as of September 30, 2014 and December 31, 2013, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2014				December 31, 2013
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	17,809	$	17,855	$	6,791	$	6,796
Due after one year through five years		37,812		38,801		21,666		22,497
Due after five years through ten years		282,900		289,141		116,735		119,269
Due after ten years		733,453		749,839		530,282		528,786
Total securities available for sale	$	1,071,974	$	1,095,636	$	675,474	$	677,348

Securities with a carrying value of $371.1 million and $188.2 million as of September 30, 2014 and December 31, 2013, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes.

During each quarter, the Company conducts an assessment of the securities portfolio for OTTI consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the quarter ended September 30, 2014, and in accordance with the guidance, no OTTI was recognized.

- 14 -

Based on the assessment for the quarter ended September 30, 2011 and in accordance with the guidance, the Company determined that a single issuer trust preferred security incurred credit-related OTTI of $400,000, which was recognized in earnings for the quarter ended September 30, 2011. During the quarter ended June 30, 2014, the trust preferred security was called at a premium.  As a result, the Company recognized a gain on the call of the previously written down security of $400,000 in the second quarter of 2014.

OTTI recognized for the periods presented is summarized as follow (dollars in thousands):

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2013	$	400
Reductions for securities sold during the period (realized)		(400	)
Cumulative credit losses on investment securities, through September 30, 2014	$	-

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4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,		December 31,
	2014		2013
Commercial:
Commercial Construction	$	303,576	$	213,675
Commercial Real Estate - Owner Occupied		856,615		500,764
Commercial Real Estate - Non-Owner Occupied		1,423,093		755,905
Raw Land and Lots		210,557		187,529
Single Family Investment Real Estate		407,972		237,640
Commercial and Industrial		380,613		215,702
Other Commercial		79,356		52,490
Consumer:
Mortgage		489,076		237,414
Consumer Construction		76,991		48,984
Indirect Auto		194,633		174,843
Indirect Marine		40,347		38,633
HELOCs		496,145		281,579
Credit Card		23,736		23,211
Other Consumer		188,293		70,999
Total	$	5,171,003	$	3,039,368

The following table shows the aging of the Company’s loan portfolio, by class, at September 30, 2014 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-	$	-	$	4,455	$	672	$	298,449	$	303,576
Commercial Real Estate - Owner Occupied		4,401		1,153		784		27,710		676		821,891		856,615
Commercial Real Estate - Non-Owner Occupied		903		168		5,347		38,831		1,145		1,376,699		1,423,093
Raw Land and Lots		356		-		121		8,804		5,074		196,202		210,557
Single Family Investment Real Estate		1,208		976		100		19,337		4,202		382,149		407,972
Commercial and Industrial		1,346		257		473		4,642		3,005		370,890		380,613
Other Commercial		366		-		2,271		2,242		62		74,415		79,356
Consumer:
Mortgage		16,436		4,260		3,903		9,367		4,346		450,764		489,076
Consumer Construction		592		198		821		534		-		74,846		76,991
Indirect Auto		1,333		280		231		-		-		192,789		194,633
Indirect Marine		56		-		-		-		226		40,065		40,347
HELOCs		4,281		1,034		648		2,121		510		487,551		496,145
Credit Card		198		116		214		-		-		23,208		23,736
Other Consumer		1,534		838		1,205		1,700		361		182,655		188,293
Total	$	33,010	$	9,280	$	16,118	$	119,743	$	20,279	$	4,972,573	$	5,171,003

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The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2013 (dollars in thousands):

	30-59 Days Past Due		60-89 Days  Past Due		Greater Than 90 Days and still Accruing		PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-	$	-	$	-	$	1,596	$	212,079	$	213,675
Commercial Real Estate - Owner Occupied		514		-		258		-		2,037		497,955		500,764
Commercial Real Estate - Non-Owner Occupied		185		42		1,996		-		175		753,507		755,905
Raw Land and Lots		922		545		-		2,457		2,560		181,045		187,529
Single Family Investment Real Estate		1,783		277		563		275		1,689		233,053		237,640
Commercial and Industrial		348		152		220		-		3,848		211,134		215,702
Other Commercial		87		1		50		-		126		52,226		52,490
Consumer:
Mortgage		6,779		1,399		1,141		-		2,446		225,649		237,414
Consumer Construction		-		-		208		-		-		48,776		48,984
Indirect Auto		2,237		252		349		7		-		171,998		174,843
Indirect Marine		459		-		-		-		288		37,886		38,633
HELOCs		2,124		422		1,190		787		43		277,013		281,579
Credit Card		105		133		281		-		-		22,692		23,211
Other Consumer		888		124		490		96		227		69,174		70,999
Total	$	16,431	$	3,347	$	6,746	$	3,622	$	15,035	$	2,994,187	$	3,039,368

Nonaccrual loans totaled $20.3 million and $15.0 million at September 30, 2014 and December 31, 2013, respectively. There were no nonaccrual loans excluded from impaired loan disclosures in 2014 or 2013. Loans past due 90 days or more and accruing interest totaled $16.1 million and $6.7 million at September 30, 2014 and December 31, 2013, respectively.

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at September 30, 2014 (dollars in thousands):

	30-89 Days Past Due		Greater than  90 Days		Current		Total
Commercial:
Commercial Construction	$	382	$	698	$	3,375	$	4,455
Commercial Real Estate - Owner Occupied		1,218		989		25,503		27,710
Commercial Real Estate - Non-Owner Occupied		2,531		1,776		34,524		38,831
Raw Land and Lots		663		-		8,141		8,804
Single Family Investment Real Estate		1,903		2,745		14,689		19,337
Commercial and Industrial		592		277		3,773		4,642
Other Commercial		514		791		937		2,242
Consumer:
Mortgage		3,342		2,884		3,141		9,367
Consumer Construction		-		534		-		534
HELOCs		399		625		1,097		2,121
Other Consumer		185		174		1,341		1,700
Total	$	11,729	$	11,493	$	96,521	$	119,743

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The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at December 31, 2013 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Raw Land and Lots	$	-	$	-	$	2,457	$	2,457
Single Family Investment Real Estate		-		-		275		275
Consumer:
Indirect Auto		-		-		7		7
HELOCs		-		31		756		787
Other Consumer		40		-		56		96
Total	$	40	$	31	$	3,551	$	3,622

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by class at September 30, 2014 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	6,289	$	6,390	$	-	$	6,392	$	163
Commercial Real Estate - Owner Occupied		9,721		10,046		-		10,227		213
Commercial Real Estate - Non-Owner Occupied		22,966		23,066		-		23,158		839
Raw Land and Lots		45,652		48,404		-		57,544		1,889
Single Family Investment Real Estate		2,975		3,396		-		3,555		106
Commercial and Industrial		2,781		5,881		-		6,203		8
Other Commercial		962		966		-		990		43
Consumer:
Mortgage		2,459		2,490		-		2,502		19
Indirect Auto		-		11		-		13		-
Indirect Marine		90		191		-		191		-
HELOCs		678		822		-		980		8
Other Consumer		89		207		-		209		-
Total impaired loans without a specific allowance	$	94,662	$	101,870	$	-	$	111,964	$	3,288
Loans with a specific allowance
Commercial:
Commercial Construction	$	383	$	383	$	201	$	353	$	9
Commercial Real Estate - Owner Occupied		8,113		8,317		761		9,398		356
Commercial Real Estate - Non-Owner Occupied		10,701		10,685		506		11,037		406
Raw Land and Lots		3,759		3,789		487		4,426		71
Single Family Investment Real Estate		7,773		9,234		733		8,904		171
Commercial and Industrial		4,463		4,768		456		5,012		171
Other Commercial		432		449		39		480		22
Consumer:
Mortgage		3,984		4,064		740		4,095		50
Consumer Construction		376		376		34		377		14
Indirect Marine		332		536		14		540		12
HELOCs		580		635		13		649		14
Other Consumer		451		467		121		474		6
Total impaired loans with a specific allowance	$	41,347	$	43,703	$	4,105	$	45,745	$	1,302
Total impaired loans	$	136,009	$	145,573	$	4,105	$	157,709	$	4,590

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The following table shows the Company’s impaired loans, by class, at December 31, 2013 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	10,520	$	10,523	$	-	$	9,073	$	282
Commercial Real Estate - Owner Occupied		4,281		4,648		-		4,845		206
Commercial Real Estate - Non-Owner Occupied		15,012		15,100		-		15,288		572
Raw Land and Lots		52,259		52,551		-		61,606		2,024
Single Family Investment Real Estate		5,520		6,021		-		6,396		261
Commercial and Industrial		4,035		6,835		-		7,083		195
Other Commercial		55		134		-		134		-
Consumer:
Mortgage		1,361		1,361		-		1,374		60
Indirect Auto		11		19		-		26		-
Indirect Marine		495		874		-		887		42
HELOCs		1,604		1,755		-		1,921		11
Other Consumer		162		211		-		214		-
Total impaired loans without a specific allowance	$	95,315	$	100,032	$	-	$	108,847	$	3,653
Loans with a specific allowance
Commercial:
Commercial Construction	$	357	$	692	$	135	$	1,136	$	9
Commercial Real Estate - Owner Occupied		3,797		3,937		284		4,000		181
Commercial Real Estate - Non-Owner Occupied		549		597		76		616		40
Raw Land and Lots		1,875		1,905		83		1,985		101
Single Family Investment Real Estate		3,389		3,676		335		3,894		114
Commercial and Industrial		2,722		3,086		204		3,214		84
Other Commercial		255		269		35		254		6
Consumer:
Mortgage		4,041		4,147		660		4,183		123
Other Consumer		321		343		151		350		10
Total impaired loans with a specific allowance	$	17,306	$	18,652	$	1,963	$	19,632	$	668
Total impaired loans	$	112,621	$	118,684	$	1,963	$	128,479	$	4,321

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. TDRs totaled $29.0 million and $41.8 million as of September 30, 2014 and December 31, 2013, respectively. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology. For the quarter ended September 30, 2014, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification.

- 19 -

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30, 2014						December 31, 2013
	No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction		1	$	690	$	-		1	$	684	$	-
Commercial Real Estate - Owner Occupied		3		690		-		4		2,278		-
Commercial Real Estate - Non-Owner Occupied		4		3,918		-		6		3,771		-
Raw Land and Lots		11		16,084		-		15		20,741		-
Single Family Investment Real Estate		8		1,892		-		13		3,497		-
Commercial and Industrial		9		1,075		123		7		1,125		-
Other Commercial		1		207		-		-		-		-
Consumer:
Mortgage		8		1,587		-		10		2,318		-
Other Consumer		3		100		-		3		106		-
Total performing		48	$	26,243	$	123		59	$	34,520	$	-
Nonperforming
Commercial:
Commercial Construction		1	$	253	$	-		3	$	947	$	-
Commercial Real Estate - Owner Occupied		2		157		-		3		283		-
Raw Land and Lots		1		937		-		2		3,973		-
Single Family Investment Real Estate		-		-		-		1		50		-
Commercial and Industrial		5		486		-		8		1,195		-
Other Commercial		1		62		-		-		-		-
Consumer:
Mortgage		2		774		-		2		794		-
Other Consumer		1		59		-		1		62		-
Total nonperforming		13	$	2,728	$	-		20	$	7,304	$	-
Total performing and nonperforming		61	$	28,971	$	123		79	$	41,824	$	-

The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the three months ended September 30, 2014 and 2013, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default. During the nine months ended September 30, 2014, the Company identified one loan, totaling approximately $24,000, that went into default that had been restructured in the twelve-month period prior to the time of default. This loan was a mortgage loan which had a term modification at a market rate. During the nine months ended September 30, 2013, the Company identified one loan, totaling approximately $43,000, that went into default that had been restructured in the twelve-month period prior to the time of default. This loan was a raw land and lot loan which was modified to an interest only loan with a market rate of interest.

- 20 -

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2014 (dollars in thousands):

	Three months ended				Nine months ended
	September 30, 2014				September 30, 2014
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Term modification, at a market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied		1	$	989		1	$	989
Single Family Investment Real Estate		-		-		1		110
Commercial and Industrial		-		-		1		33
Other Commercial		-		-		2		269
Total loan term extended at a market rate		1	$	989		5	$	1,401
Total		1	$	989		5	$	1,401

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2013 (dollars in thousands):

	Three months ended				Nine months ended
	September 30, 2013				September 30, 2013
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only, at a market rate
Commercial:
Raw Land and Lots		-	$	-		1	$	43
Consumer:
Mortgage		1		139		2		738
Total interest only at market rate of interest		1	$	139		3	$	781
Term modification, at a market rate
Commercial:
Commercial Construction		-	$	-		2	$	545
Commercial Real Estate - Owner Occupied		1		167		2		1,093
Commercial Real Estate - Non-Owner Occupied		-		-		1		749
Raw Land and Lots		-		-		3		382
Single Family Investment Real Estate		-		-		7		2,499
Commercial and Industrial		-		-		4		613
Consumer:
Mortgage		-		-		2		686
Total loan term extended at a market rate		1	$	167		21	$	6,567
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied		-	$	-		1	$	149
Commercial and Industrial		-		-		1		8
Consumer:
Mortgage		-		-		1		154
Total loan term extended at a below market rate		-	$	-		3	$	311
Total		2	$	306		27	$	7,659

- 21 -

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2014. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	19,856		$	10,227		$	52	$	30,135
Recoveries credited to allowance		1,999			866			-		2,865
Loans charged off		(1,991	)		(2,200	)		-		(4,191	)
Provision charged to operations		1,455			1,793			52		3,300
	$	21,319		$	10,686		$	104	$	32,109
Ending Balance, ALL:
Loans individually evaluated for impairment	$	3,183		$	922		$	-	$	4,105
Loans collectively evaluated for impairment		18,136			9,764			104		28,004
Loans acquired with deteriorated credit quality		-			-			-		-
Total	$	21,319		$	10,686		$	104	$	32,109
Ending Balance, Loans:
Loans individually evaluated for impairment	$	125,310		$	8,855		$	-	$	134,165
Loans collectively evaluated for impairment		3,430,451			1,486,644			-		4,917,095
Loans acquired with deteriorated credit quality		106,021			13,722			-		119,743
Total	$	3,661,782		$	1,509,221		$	-	$	5,171,003

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the year ended December 31, 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821		$	10,107		$	(12	)	$	34,916
Recoveries credited to allowance		1,496			1,285			-			2,781
Loans charged off		(8,534	)		(5,084	)		-			(13,618	)
Provision charged to operations		2,073			3,919			64			6,056
Balance, end of period	$	19,856		$	10,227		$	52		$	30,135
Ending Balance, ALL:
Loans individually evaluated for impairment	$	1,152		$	811		$	-		$	1,963
Loans collectively evaluated for impairment		18,704			9,416			52			28,172
Loans acquired with deteriorated credit quality		-			-			-			-
Total	$	19,856		$	10,227		$	52		$	30,135
Ending Balance, Loans:
Loans individually evaluated for impairment	$	101,894		$	7,105		$	-		$	108,999
Loans collectively evaluated for impairment		2,059,079			867,668			-			2,926,747
Loans acquired with deteriorated credit quality		2,732			890			-			3,622
Total	$	2,163,705		$	875,663		$	-		$	3,039,368

- 22 -

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821		$	10,107		$	(12	)	$	34,916
Recoveries credited to allowance		1,051			841			-			1,892
Loans charged off		(4,775	)		(3,006	)		-			(7,781	)
Provision charged to operations		3,200			1,741			(91	)		4,850
Balance, end of period	$	24,297		$	9,683		$	(103	)	$	33,877
Ending Balance, ALL:
Loans individually evaluated for impairment	$	5,607		$	1,454		$	-		$	7,061
Loans collectively evaluated for impairment		18,690			8,229			(103	)		26,816
Loans acquired with deteriorated credit quality		-			-			-			-
Total	$	24,297		$	9,683		$	(103	)	$	33,877
Ending Balance, Loans:
Loans individually evaluated for impairment	$	107,566		$	7,730		$	-		$	115,296
Loans collectively evaluated for impairment		2,014,220			868,779			-			2,882,999
Loans acquired with deteriorated credit quality		3,031			920			-			3,951
Total	$	2,124,817		$	877,429		$	-		$	3,002,246

The Company uses the past due status and trends as the primary credit quality indicator for the consumer loan portfolio segment while a risk rating system is utilized for commercial loans. Commercial loans are graded on a scale of 1 through 9. A general description of the characteristics of the risk grades follows:

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

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

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

· Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

· Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

· Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position;

· Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

· Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

· Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

- 23 -

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of September 30, 2014 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	20,850	$	250,160	$	13,214	$	11,597	$	3,300	$	-	$	299,121
Commercial Real Estate - Owner Occupied		174,759		609,379		16,544		18,255		9,968		-		828,905
Commercial Real Estate - Non-Owner Occupied		294,645		1,004,064		40,097		13,246		32,210		-		1,384,262
Raw Land and Lots		12,356		124,968		14,568		3,797		46,064		-		201,753
Single Family Investment Real Estate		62,225		299,539		9,874		7,175		9,822		-		388,635
Commercial and Industrial		131,104		225,795		6,811		5,194		7,067		-		375,971
Other Commercial		33,174		34,284		7,037		1,224		1,395		-		77,114
Total	$	729,113	$	2,548,189	$	108,145	$	60,488	$	109,826	$	-	$	3,555,761

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of December 31, 2013 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	24,399	$	148,251	$	20,370	$	13,772	$	6,883	$	-	$	213,675
Commercial Real Estate - Owner Occupied		149,632		324,394		10,017		10,926		5,795		-		500,764
Commercial Real Estate - Non-Owner Occupied		224,702		453,279		21,953		46,084		9,887		-		755,905
Raw Land and Lots		8,648		98,927		14,132		16,439		46,926		-		185,072
Single Family Investment Real Estate		38,327		168,564		12,302		11,522		6,650		-		237,365
Commercial and Industrial		68,748		123,585		8,254		8,752		3,822		2,541		215,702
Other Commercial		18,593		23,160		8,529		1,897		311		-		52,490
Total	$	533,049	$	1,340,160	$	95,557	$	109,392	$	80,274	$	2,541	$	2,160,973

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of September 30, 2014 (dollars in thousands):

	4		5		6		7		8		Total
Commercial Construction	$	-	$	-	$	3,375	$	609	$	471	$	4,455
Commercial Real Estate - Owner Occupied		530		5,938		7,375		13,867		-		27,710
Commercial Real Estate - Non-Owner Occupied		1,654		295		16,148		20,734		-		38,831
Raw Land and Lots		1,414		1,465		2,464		3,461		-		8,804
Single Family Investment Real Estate		2,757		873		6,689		9,018		-		19,337
Commercial and Industrial		478		-		1,193		2,931		40		4,642
Other Commercial		-		-		282		1,960		-		2,242
Total	$	6,833	$	8,571	$	37,526	$	52,580	$	511	$	106,021

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of December 31, 2013 (dollars in thousands):

	4		5		6		7		8		Total
Raw Land and Lots	$	-	$	653	$	-	$	1,804	$	-	$	2,457
Single Family Investment Real Estate		275		-		-		-		-		275
Total	$	275	$	653	$	-	$	1,804	$	-	$	2,732

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

- 24 -

The following shows changes in the Company’s PCI loan portfolio and accretable yield for loans accounted for under ASC 310-30 for the periods presented (dollars in thousands):

	For the Nine Months Ended						For the Nine Months Ended
	September 30, 2014						September 30, 2013
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Balance at beginning of period	$	2,980		$	3,622		$	3,147		$	4,565
Additions		34,653			145,454			-			-
Accretion		(5,681	)		-			-			-
Charge-offs		(472	)		-			(54	)		(96	)
Transfers to OREO		-			(1,006	)		-			(201	)
Payments received, net		-			(28,327	)		-			(317	)
Other, net		(1,678	)		-			-			-
Balance at end of period	$	29,802		$	119,743		$	3,093		$	3,951

Loans in the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, totaled $1.9 billion at September 30, 2014 and $377.8 million at December 31, 2013; the remaining discount on these loans totaled $25.1 million and $3.3 million, respectively.

5. INTANGIBLE ASSETS

The Company’s intangible assets consist of core deposits and goodwill arising from previous acquisitions. The Company has determined that core deposit intangibles have a finite life and amortizes them over their estimated useful life. Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years, using an accelerated method. On January 1, 2014, the Company completed the acquisition of StellarOne and acquired intangible assets of $29.6 million and recorded $237.5 million of goodwill. See Note 2 “Acquisitions” in the “Notes to Consolidated Financial Statements” for additional information.

In accordance with ASC 350, Intangibles-Goodwill and Other, the Company reviews the carrying value of indefinite lived intangible assets at least annually or more frequently if certain impairment indicators exist. The Company performed its annual impairment testing in the second quarter of 2014 and determined that there was no impairment to its goodwill or intangible assets.

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

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2014
Amortizable core deposit intangibles	$	76,185	$	42,096	$	34,089
December 31, 2013
Amortizable core deposit intangibles	$	46,615	$	34,635	$	11,980
September 30, 2013
Amortizable core deposit intangibles	$	46,615	$	33,715	$	12,900

- 25 -

Amortization expense of core deposit intangibles for the three and nine months ended September 30, 2014 totaled $2.4 million and $7.5 million, respectively, for the three and nine months ended September 30, 2013 totaled $921,000 and $2.9 million, respectively, and for the year ended December 31, 2013 was $3.8 million. As of September 30, 2014, the estimated remaining amortization expense of core deposit intangibles is as follows (dollars in thousands):

For the remaining three months of 2014	$	2,334
For the year ending December 31, 2015		8,444
For the year ending December 31, 2016		6,932
For the year ending December 31, 2017		5,590
For the year ending December 31, 2018		4,144
For the year ending December 31, 2019		3,093
Thereafter		3,552
Total estimated amortization expense	$	34,089

6. BORROWINGS

Short-term Borrowings

Total short-term borrowings consist of securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Also included in total short-term borrowings are federal funds purchased, which are overnight borrowings from other financial institutions, and short-term FHLB advances. Total short-term borrowings consist of the following as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,			December 31,
	2014			2013
Securities sold under agreements to repurchase	$	33,517		$	52,455
Other short-term borrowings		195,000			211,500
Total short-term borrowings	$	228,517		$	263,955
Maximum month-end outstanding balance	$	274,281		$	263,955
Average outstanding balance during the period		238,104			119,433
Average interest rate during the period		0.24	%		0.30	%
Average interest rate at end of period		0.20	%		0.30	%
Other short-term borrowings:
Federal funds purchased	$	-		$	31,500
FHLB	$	195,000		$	180,000

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $150.0 million and $93.5 million at September 30, 2014 and December 31, 2013, respectively. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Bank had a collateral dependent line of credit with the FHLB of up to $1.5 billion and $805.2 million at September 30, 2014 and December 31, 2013, respectively.

- 26 -

Long-term Borrowings

In connection with certain bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $7.3 million at September 30, 2014. The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

	Principal		Investment(1)		Spread to 3-Month LIBOR			Rate			Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000		2.75	%		2.99	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II		36,000,000		1,114,000		1.40	%		1.64	%	6/15/2036
VFG Limited Liability Trust I Indenture		20,000,000		619,000		2.73	%		2.97	%	3/18/2034
FNB Statutory Trust II Indenture		12,000,000		372,000		3.10	%		3.34	%	6/26/2033
Total	$	90,500,000	$	2,801,000

(1) reported as 'Other Assets' within the Consolidated Balance Sheets

As part of a prior acquisition, the Company assumed subordinated debt with terms of LIBOR plus 1.45% and a maturity date of April 2016. At September 30, 2014, the carrying value of the subordinated debt was $17.5 million, with a remaining fair value discount of $774,000.

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s Consolidated Balance Sheet. In accordance with ASC 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s Consolidated Income Statement. Amortization expense for the three and nine months ended September 30, 2014 and 2013 was $452,000 and $1.3 million and $441,000 and $1.3 million, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB with a remaining fair value premium of $2.4 million at September 30, 2014. As of September 30, 2014, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR			Interest Rate			Maturity Date	Advance Amount
Adjustable Rate Credit		0.44	%		0.68	%	8/23/2022	$	55,000
Adjustable Rate Credit		0.45	%		0.69	%	11/23/2022		65,000
Adjustable Rate Credit		0.45	%		0.69	%	11/23/2022		10,000
Adjustable Rate Credit		0.45	%		0.69	%	11/23/2022		10,000
Fixed Rate		-			3.62	%	11/28/2017		10,000
Fixed Rate		-			3.44	%	7/28/2015		10,000
Fixed Rate		-			3.75	%	7/30/2018		5,000
Fixed Rate		-			3.97	%	7/30/2018		5,000
Fixed Rate Hybrid		-			2.11	%	10/5/2016		25,000
Fixed Rate Hybrid		-			0.91	%	7/25/2016		15,000
								$	210,000

As of December 31, 2013, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR			Interest Rate			Maturity Date	Advance Amount
Adjustable Rate Credit		0.44	%		0.69	%	8/23/2022	$	55,000
Adjustable Rate Credit		0.45	%		0.70	%	11/23/2022		65,000
Adjustable Rate Credit		0.45	%		0.70	%	11/23/2022		10,000
Adjustable Rate Credit		0.45	%		0.70	%	11/23/2022		10,000
								$	140,000

- 27 -

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $1.1 billion and $1.1 billion as of September 30, 2014 and December 31, 2013, respectively.

As of September 30, 2014, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
Remaining three months in 2014	$	-	$	-	$	-	$	75		$	(455	)	$	(380	)
2015		-		-		10,000		175			(1,831	)		8,344
2016		-		17,500		40,000		271			(1,882	)		55,889
2017		-		-		10,000		170			(1,923	)		8,247
2018		-		-		10,000		(143	)		(1,970	)		7,887
2019		-		-		-		(286	)		(2,018	)		(2,304	)
Thereafter		93,301		-		140,000		(5,923	)		(5,899	)		221,479
Total long-term borrowings	$	93,301	$	17,500	$	210,000	$	(5,661	)	$	(15,978	)	$	299,162

7. COMMITMENTS AND CONTINGENCIES

Litigation Matters

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

Litigation Relating to the StellarOne Acquisition

In a press release issued on June 10, 2013, the Company announced the signing of a definitive merger agreement for the acquisition of StellarOne. The Company closed the acquisition of StellarOne on January 1, 2014. On June 14, 2013, in response to the initial announcement of the definitive merger agreement, Jaclyn Crescente, individually and on behalf of all other StellarOne shareholders, filed a class action complaint against StellarOne, its current directors, StellarOne Bank, and the Company, in the U.S. District Court for the Western District of Virginia, Charlottesville Division (the “District Court”) (Case No. 3:13-cv-00021-NKM). The complaint alleged that the StellarOne directors breached their fiduciary duties by approving the merger with the Company and that the Company aided and abetted in such breaches of duty. The complaint sought, among other things, money damages. StellarOne and the Company believed that the claims were without merit; however, in order to eliminate the expense and uncertainties of further litigation, all the defendants entered into a memorandum of understanding with the plaintiffs in order to settle the litigation prior to the merger. Under the terms of the memorandum of understanding, the plaintiffs agreed to settle the lawsuit and release the defendants from all claims, subject to approval by the District Court. On May 19, 2014, the District Court approved the memorandum of understanding and the class action settlement in the case.

Financial Instruments with Off-Balance Sheet Risk

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

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk.

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

- 28 -

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

UMG, a wholly owned subsidiary of the Bank, uses rate lock commitments during the origination process and for loans held for sale. These commitments to sell loans are designed to mitigate UMG’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale. The Company held approximately $3.1 million and $2.0 million in loans available for sale in which the related rate lock commitment had expired as of September 30, 2014 and December 31, 2013, respectively. At September 30, 2014 and December 31, 2013, the reserves associated with these loans held for sale were $104,000 and $94,000, respectively, and are reflected on the balance sheet of the mortgage segment.

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

	September 30,		December 31,
	2014		2013
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,576,050	$	891,680
Standby letters of credit		139,459		48,107
Mortgage loan rate lock commitments		70,343		54,834
Total commitments with off-balance sheet risk	$	1,785,852	$	994,621
Commitments with balance sheet risk:
Loans held for sale	$	31,469	$	53,185
Total other commitments	$	1,817,321	$	1,047,806

(1) Includes unfunded overdraft protection.

The Company must maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act. For the final weekly reporting period in the periods ended September 30, 2014 and December 31, 2013, the aggregate amount of daily average required reserves was approximately $50.2 million and $16.0 million, respectively.

The Company has approximately $18.9 million in deposits in other financial institutions, of which $5.7 million serves as collateral for the trust swaps discussed in Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements.” The Company had approximately $12.1 million in deposits in other financial institutions that were uninsured at September 30, 2014. On an annual basis, the Company’s management evaluates the loss risk of its uninsured deposits in financial counter-parties.

For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts. See Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements” for additional information.

In the ordinary course of business, the Company records an indemnification reserve relating to mortgage loans previously sold based on historical statistics and loss rates; as of September 30, 2014 and December 31, 2013, the Company’s indemnification reserve was $840,000 and $627,000, respectively.

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8. DERIVATIVES

The Company has three interest rate swap agreements (the “trust swaps”) as part of the management of interest rate risk related to the trust preferred capital notes further described in Note 6 “Borrowings” in the “Notes to Consolidated Financial Statements”. The Company designated the trust swaps as a cash flow hedge intended to protect against the variability of cash flows associated with the aforementioned preferred capital securities. The trust swaps hedge the interest rate risk, wherein the Company receives interest of LIBOR from a counterparty and pays a weighted average fixed rate of 2.77% to the same counterparty calculated on a notional amount of $68.0 million. The terms of the trust swaps range from three to six years.

During the third quarter of 2013, the Company entered into eight interest rate swap agreements (the “prime loan swaps”) as part of the management of interest rate risk. The Company designated the prime loan swaps as cash flow hedges intended to protect the Company against the variability in the expected future cash flows on the designated variable rate loan products. During the first quarter of 2014, the Company discontinued four of the prime loan swaps with a total notional amount of $45.0 million, which were in place at December 31, 2013. The unrealized gain reclassified to earnings related to these four prime loan swaps was not material to the Company’s consolidated financial statements. The remaining four prime loan swaps hedge the underlying cash flows, wherein the Company receives a fixed interest rate ranging from 4.71% to 5.20% from the counterparty and pays interest based on the Wall Street Journal prime index, with a spread of up to 1.00%, to the same counterparty calculated on a notional amount of $55.0 million. One of the four prime loan swaps contains a floor rate of 4.00%. The terms of the four prime loan swaps is six years with a fixed rate that started September 17, 2013.

During 2014, the Company entered into four swaps (“FHLB advance swaps”) with a total notional amount of $140.0 million.  The Company designated the FHLB advance swaps as a cash flow hedge intended to protect against the variability in the expected future cash flows on the designated variable rate FHLB borrowings.  The FHLB advance swaps hedge the interest rate risk, wherein the Company will receive an interest rate based on the three month LIBOR from the counterparty and pays an interest rate ranging from 3.16% to 3.46% to the same counterparty calculated on the notional amount.  The swaps are deferred starting swaps with terms of six years and five years and effective dates of February 23, 2017 and February 23, 2018, respectively.

All swaps were entered into with counterparties that met the Company’s credit standards and the agreement contains collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant. As of September 30, 2014, the Company had $5.7 million of cash pledged as collateral for the trust swaps and securities with a market value of $4.9 million pledged as collateral for the prime loan swaps and FHLB advance swaps.

Amounts receivable or payable are recognized as accrued under the terms of the agreements. In accordance with ASC 815, Derivatives and Hedging, the Company has designated the trust swaps, prime loan swaps, and FHLB advance swaps as cash flow hedges, with the effective portions of the derivatives’ unrealized gains or losses recorded as a component of other comprehensive income. The ineffective portions of the unrealized gains or losses, if any, would be recorded in “Other expense” in the Consolidated Statements of Income. The Company has assessed the effectiveness of each hedging relationship by comparing the changes in cash flows on the designated hedged item. The Company’s cash flow hedges are deemed to be effective. At September 30, 2014, the fair value of the Company’s cash flow hedges was an unrealized loss of $5.0 million, the amount the Company would have expected to pay if the contract was terminated. The liability is recorded as a component of other comprehensive income recorded in the Company’s Consolidated Statements of Comprehensive Income.

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Shown below is a summary of the derivatives designated as cash flow hedges at September 30, 2014 and December 31, 2013 (dollars in thousands):

			Notional						Receive			Pay			Life
	Positions		Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2014
Pay fixed - receive floating interest rate swaps		7	$	208,000	$	-	$	5,049		0.24	%(1)		2.77	%(1)		2.38	(1)
Receive fixed - pay floating interest rate swaps		4	$	55,000	$	33	$	-		4.93	%		3.55	%		4.97

(1) Due to their deferred nature, the rates and the life exclude the four FHLB advance swaps.

			Notional						Receive			Pay			Life
	Positions		Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2013
Pay fixed - receive floating interest rate swaps		1	$	36,000	$	-	$	3,046		0.25	%		3.51	%		3.46
Receive fixed - pay floating interest rate swaps		8	$	100,000	$	-	$	516		5.17	%		3.89	%		5.72

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with counterparties in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives with fair values reported in “Other assets” and “Other liabilities” in the Consolidated Balance Sheets. As of September 30, 2014, the Company had securities with a market value of $2.0 million pledged as collateral for the loan swaps. Shown below is a summary regarding loan swap derivative activities at September 30, 2014 and December 31, 2013 (dollars in thousands):

			Notional						Receive			Pay			Life
	Positions		Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2014
Receive fixed - pay floating interest rate swaps		29	$	103,943	$	828	$	-		4.32	%		2.55	%		7.49
Pay fixed - receive floating interest rate swaps		29	$	103,943	$	-	$	828		2.55	%		4.32	%		7.49

			Notional						Receive			Pay			Life
	Positions		Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2013
Receive fixed - pay floating interest rate swaps		1	$	718	$	33	$	-		4.58	%		2.92	%		8.59
Pay fixed - receive floating interest rate swaps		1	$	718	$	-	$	33		2.92	%		4.58	%		8.59

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

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The market value of rate lock commitments and best efforts contracts is not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded in stand-alone markets.  The Company determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the value of the underlying asset while taking into consideration the probability that the rate lock commitments will close. 

During the first quarter of 2014, and in connection with the acquisition of StellarOne, the Company began recording the rate lock commitments derivative on its balance sheet at fair value.  Because the amounts associated with the rate lock commitments were determined to be immaterial, the Company did not record the value of the rate locks in any period prior to January 1, 2014.  While the rate lock commitment derivative is still considered immaterial to the consolidated financial statements, the Company began recording this asset on its Consolidated Balance Sheets within “Loans held for sale, net” post-acquisition when integrating the acquired mortgage operations of StellarOne.  The Company’s derivative related to rate lock commitments had a notional amount of $70.3 million at September 30, 2014 with a fair value of $612,000.  This derivative instrument does not qualify for hedge accounting; as a result, changes in fair value are recognized in current period earnings as a component of “Gain on sale of mortgage loans, net of commissions.”

9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2014 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2014	$	14,202		$	(3,321	)	$	10,881
Other comprehensive income (loss)		1,798			(228	)		1,570
Amounts reclassified from accumulated other comprehensive income		(647	)		164			(483	)
Net current period other comprehensive income (loss)		1,151			(64	)		1,087
Balance - September 30, 2014	$	15,353		$	(3,385	)	$	11,968

	Unrealized Gains (Losses) on Securities			Change in Fair Value of Cash Flow Hedges			Total
Balance - December 31, 2013	$	1,192		$	(3,382	)	$	(2,190	)
Other comprehensive income		14,843			(431	)		14,412
Amounts reclassified from accumulated other comprehensive income		(682	)		428			(254	)
Net current period other comprehensive income		14,161			(3	)		14,158
Balance - September 30, 2014	$	15,353		$	(3,385	)	$	11,968

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The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2013 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2013	$	2,719		$	(3,354	)	$	(635	)
Other comprehensive income (loss)		(393	)		293			(100	)
Amounts reclassified from accumulated other comprehensive income		(3	)		161			158
Net current period other comprehensive income (loss)		(396	)		454			58
Balance - September 30, 2013	$	2,323		$	(2,900	)	$	(577	)

	Unrealized Gains (Losses) on Securities			Change in Fair Value of Cash Flow Hedges			Total
Balance - December 31, 2012	$	14,573		$	(4,489	)	$	10,084
Other comprehensive income (loss)		(12,220	)		1,049			(11,171	)
Amounts reclassified from accumulated other comprehensive income		(30	)		540			510
Net current period other comprehensive income (loss)		(12,250	)		1,589			(10,661	)
Balance - September 30, 2013	$	2,323		$	(2,900	)	$	(577	)

Reclassifications of unrealized gains (losses) on available for sale securities are reported in the Consolidated Income Statement as "Gains on securities transactions, net" with the corresponding income tax effect being reflected as a component of income tax expense. Excluding OTTI recovery of $400,000 in the second quarter of 2014, the Company reported gains of $995,000 and $1.0 million for the three and nine months ended September 30, 2014, respectively, and gains of $5,000 and $47,000 for the three and nine months ended September, 30, 2013, respectively, related to gains/losses on the sale of securities. The tax effect of these transactions during the three and nine months ended September 30, 2014 and 2013 were $348,000 and $367,000 and $2,000 and $17,000, respectively, which were included as a component of income tax expense.

Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense in the Consolidated Income Statement with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported net interest expense of $253,000 and $659,000 and $248,000 and $831,000 for the three and nine months ended September 30, 2014 and 2013, respectively. The tax effect of these transactions during the three and nine months ended September 30, 2014 and 2013 were $89,000 and $231,000 and $87,000 and $291,000, respectively, which were included as a component of income tax expense.

10. FAIR VALUE MEASUREMENTS

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

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

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

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

Derivative instruments

As discussed in Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements,” the Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

During the ordinary course of business, the Company enters into interest rate lock commitments related to the origination of mortgage loans held for sale that are recorded at estimated fair value based on the value of the underlying loan, which in turn is based on quoted prices for similar loans in the secondary market. However, this value is adjusted by a pull-through rate which considers the likelihood that the loan in a lock position will ultimately close. The pull-through rate is derived from the Company’s internal data and is adjusted using significant management judgment. The pull-through rate is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. As such, interest rate lock commitments are classified as Level 3. The Company used a weighted average pull-through rate of approximately 90%. As of September 30, 2014, this derivative is recorded as a component of “Loans held for sale, net” on the Consolidated Balance Sheet.

Securities available for sale

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

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

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

The Company uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2014 and December 31, 2013.

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

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

	Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		33		-		33
Interest rate lock commitments		-		-		612		612
Securities available for sale:
U.S. government and agency securities		-		1,931		-		1,931
Obligations of states and political subdivisions		-		435,657		-		435,657
Corporate and other bonds		-		78,899		-		78,899
Mortgage-backed securities		-		569,328		-		569,328
Other securities		-		9,821		-		9,821
LIABILITIES
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		5,049		-		5,049

	Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	33	$	-	$	33
Securities available for sale:
U.S. government and agency securities		-		2,153		-		2,153
Obligations of states and political subdivisions		-		254,830		-		254,830
Corporate and other bonds		-		9,434		-		9,434
Mortgage-backed securities		-		407,362		-		407,362
Other securities		-		3,569		-		3,569
LIABILITIES
Interest rate swap	$	-	$	33	$	-	$	33
Cash flow hedges		-		3,562		-		3,562

- 35 -

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

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

Loans held for sale

Loans held for sale are carried at the lower of cost or market value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis. Nonrecurring fair value adjustments for the three and nine months ended September 30, 2014 totaled $139,000 and $225,000, respectively, and for the three and nine months ended September 30, 2013 were $177,000 and $363,000, respectively. Gains and losses on the sale of loans are recorded within the mortgage segment and are reported on a separate line item in the Consolidated Statements of Income.

Impaired loans

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

Other real estate owned

OREO is evaluated for impairment at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense. Fair values of OREO are carried at fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation.

Total valuation expenses related to OREO properties for the three and nine months ended September 30, 2014 totaled $6.2 million and $7.3 million, respectively, and for both the three and nine months ended September 30, 2013 were $491,000. During the third quarter of 2014, the Company reevaluated its OREO sales strategies in light of limited progress in selling properties in inactive rural markets that have continued to struggle coming out of the economic downturn and for which transaction volume for comparable sales has been slow or nonexistent. With the shift in strategy to more aggressively market this OREO, the Company obtained appraisals that reflect the newly determined highest and best use of the underlying assets.

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The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

	Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	-	$	30,857	$	-	$	30,857
Impaired loans		-		-		26,910		26,910
Other real estate owned		-		-		37,754		37,754

	Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	-	$	53,185	$	-	$	53,185
Impaired loans		-		-		7,985		7,985
Other real estate owned		-		-		34,116		34,116

The following table displays quantitative information about Level 3 Fair Value Measurements at September 30, 2014 (dollars in thousands):

	Fair Value Measurements at September 30, 2014
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	2	Market comparables	Discount applied to market comparables (1)		0	%
Commercial Real Estate - Owner Occupied		5,628	Market comparables	Discount applied to market comparables (1)		25	%
Commercial Real Estate - Non-Owner Occupied		9,731	Market comparables	Discount applied to market comparables (1)		16	%
Raw Land and Lots		2,483	Market comparables	Discount applied to market comparables (1)		1	%
Single Family Investment Real Estate		5,189	Market comparables	Discount applied to market comparables (1)		15	%
Commercial and Industrial		1,102	Market comparables	Discount applied to market comparables (1)		27	%
Other (2)		2,775	Market comparables	Discount applied to market comparables (1)		6	%
Total Impaired Loans		26,910
Other real estate owned		37,754	Market comparables	Discount applied to market comparables (1)		32	%
Total	$	64,664

⁽¹⁾ A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.

⁽²⁾ The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Indirect Marine, HELOCs, and Other Consumer.

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The following table displays quantitative information about Level 3 Fair Value Measurements at December 31, 2013 (dollars in thousands):

	Fair Value Measurements at December 31, 2013
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	219	Market comparables	Discount applied to market comparables (1)		0	%
Commercial Real Estate - Owner Occupied		2,043	Market comparables	Discount applied to market comparables (1)		17	%
Raw Land and Lots		908	Market comparables	Discount applied to market comparables (1)		10	%
Single Family Investment Real Estate		1,332	Market comparables	Discount applied to market comparables (1)		0	%
Commercial and Industrial		1,719	Market comparables	Discount applied to market comparables (1)		28	%
Other (2)		1,764	Market comparables	Discount applied to market comparables (1)		0	%
Total Impaired Loans		7,985
Other real estate owned		34,116	Market comparables	Discount applied to market comparables (1)		33	%
Total	$	42,101

⁽¹⁾ A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.

⁽²⁾ The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Consumer Construction, HELOCs, and Other Consumer.

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

Cash and cash equivalents

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

Loans

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

Deposits

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

Borrowings

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

Accrued interest

The carrying amounts of accrued interest approximate fair value.

Commitments to extend credit and standby letters of credit

The fair value of commitments 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 value of 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 at the reporting date. At September 30, 2014 and December 31, 2013, the fair value of loan commitments and standby letters of credit was immaterial.

- 38 -

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2014 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	148,692	$	148,692	$	-	$	-	$	148,692
Securities available for sale		1,095,636		-		1,095,636		-		1,095,636
Restricted stock		48,554		-		48,554		-		48,554
Interest rate lock commitments		612		-		-		612		612
Loans held for sale		30,857		-		30,857		-		30,857
Net loans		5,138,894		-		-		5,167,987		5,167,987
Interest rate swap		828		-		828		-		828
Cash flow hedges		33		-		33		-		33
Accrued interest receivable		21,260		-		21,260		-		21,260
LIABILITIES
Deposits	$	5,634,050	$	-	$	5,634,121	$	-	$	5,634,121
Borrowings		527,679		-		508,702		-		508,702
Accrued interest payable		1,963		-		1,963		-		1,963
Interest rate swap		828		-		828		-		828
Cash flow hedges		5,049		-		5,049		-		5,049

			Fair Value Measurements at December 31, 2013 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	73,023	$	73,023	$	-	$	-	$	73,023
Securities available for sale		677,348		-		677,348		-		677,348
Restricted stock		26,036		-		26,036		-		26,036
Loans held for sale		53,185		-		53,185		-		53,185
Net loans		3,009,233		-		-		3,035,504		3,035,504
Interest rate swap		33		-		33		-		33
Accrued interest receivable		15,000		-		15,000		-		15,000
LIABILITIES
Deposits	$	3,236,842	$	-	$	3,238,777	$	-	$	3,238,777
Borrowings		463,314		-		443,237		-		443,237
Accrued interest payable		902		-		902		-		902
Interest rate swap		33		-		33		-		33
Cash flow hedges		3,562		-		3,562		-		3,562

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

11. STOCK-BASED COMPENSATION

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) provides for the granting of stock-based awards in the form of incentive stock options (“incentive stock options,” intended to comply with the requirements of Section 422 of the Internal Revenue Code of 1986), non-statutory stock options, and nonvested stock to attract, retain, and reward key employees of the Company and its subsidiaries. The Company issues new shares to satisfy stock-based awards. Under the plan, the option price cannot be less than the fair market value of the stock on the grant date, and the stock option’s maximum term is ten years from the date of grant and vests in equal annual installments of 20% over a five year vesting schedule. The 2011 Plan became effective on January 1, 2011 after its approval by shareholders at the annual meeting of shareholders held on April 26, 2011. The following table summarizes the shares available in the 2011 Plan as of September 30, 2014:

	2011 Plan
Beginning Authorization		1,000,000
Granted		(516,727	)
Expired, forfeited, or cancelled		50,260
Remaining available for grant		533,533

In connection with the acquisition of StellarOne, each outstanding option to acquire StellarOne common stock, whether or not exercisable, was assumed by the Company and converted into an option to acquire the same number of whole shares of the Company’s common stock, subject to the exchange ratio of 0.9739. The exercise price per share of each new option was equal to the price under the original StellarOne option divided by the exchange ratio of 0.9739. Each converted StellarOne stock option has the same terms and conditions that were in effect prior to the completion of the acquisition. Restricted StellarOne stock awards, which were unvested and outstanding prior to the merger, were accelerated and converted into restricted stock awards of the Company on the same basis as stock options. Restricted common stock of the Company was issued from StellarOne stock incentive plans assumed in the acquisition, and subsequent awards from the Company will be issued from the 2011 Plan.

For the three months ended September 30, 2014 and 2013, the Company recognized stock-based compensation expense (included in salaries and benefits expense) of approximately $308,000 and $297,000 ($227,000 and $236,000 net of tax), respectively, and for the nine months ended September 30, 2014 and 2013, recognized $862,000 and $622,000 ($641,000 and $505,000 net of tax), respectively. Stock-based compensation expense represents approximately $0.01 per common share for both the three months ended September 30, 2014 and 2013, and $0.02 per common share for both the nine months ended September 30, 2014 and 2013.

Stock Options

The following table summarizes the stock option activity for the nine months ended September 30, 2014:

	Number of Stock Options			Weighted Average Exercise Price
Options outstanding, December 31, 2013		402,946		$	16.48
Options converted upon StellarOne acquisition		124,217			20.88
Exercised		(67,057	)		16.89
Expired		(60,579	)		22.91
Options outstanding, September 30, 2014		399,527			16.81
Options exercisable, September 30, 2014		273,971			18.16

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The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model. The model uses variables which include the historical dividend yield of the Company’s common stock, the average contractual life and vesting schedule of the option, the historic volatility of the Company’s common stock price, and the risk-free interest rate at the time the option was granted. Other than options that were assumed and converted upon completion of the StellarOne merger, the Company has not granted incentive compensation in the form of options since February 2012.

The following table summarizes information concerning stock options issued to the Company’s employees that are vested or are expected to vest and stock options exercisable as of September 30, 2014:

	Stock Options Vested or Expected to Vest		Exercisable
Stock options (number of shares)		398,809		273,971
Weighted average remaining contractual life in years		5.22		4.48
Weighted average exercise price on shares above water	$	14.38	$	14.68
Aggregate intrinsic value	$	2,815,845	$	1,670,373

Nonvested Stock

The 2011 Plan permits the granting of nonvested stock but limits such grants to one-third of the aggregate number of total awards granted. This equity component of compensation is divided between restricted (time-based) stock grants and performance-based stock grants. Generally, the restricted stock vests 50% on each of the third and fourth anniversaries from the grant date. The performance-based stock is subject to vesting based on achieving certain performance metrics; the grant of performance-based stock is subject to approval by the Company’s Compensation Committee in its sole discretion. The value of the nonvested stock awards is calculated by multiplying the fair market value of the Company’s common stock on the grant date by the number of shares awarded. Employees have the right to vote the shares and to receive cash or stock dividends (restricted stock), if any, except for the nonvested stock under the performance-based component (performance stock).

The following table summarizes the restricted stock activity for the nine months ended September 30, 2014:

	Number of Shares of Restricted Stock			Weighted Average Grant-Date Fair Value
Balance, December 31, 2013		260,763		$	16.47
Granted		134,431			24.29
Net settle for taxes		(63,916	)		24.83
Vested		(14,707	)		14.64
Forfeited		(25,377	)		20.94
Balance, September 30, 2014		291,194			20.04

The estimated unamortized compensation expense, net of estimated forfeitures, related to nonvested stock and stock options issued and outstanding as of September 30, 2014 that will be recognized in future periods is as follows (dollars in thousands):

	Stock Options		Restricted Stock		Total
For the remaining three months of 2014	$	79	$	480	$	559
For year ending December 31, 2015		233		1,469		1,702
For year ending December 31, 2016		130		1,155		1,285
For year ending December 31, 2017		15		443		458
For year ending December 31, 2018		-		56		56
Total	$	457	$	3,603	$	4,060

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12. EARNINGS PER SHARE

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

There were approximately 155,433 and 273,355 shares underlying anti-dilutive awards for the three months ended September 30, 2014 and 2013, respectively, and there were approximately 130,499 and 200,787 shares underlying anti-dilutive awards for the nine months ended September 30, 2014 and 2013, respectively. Anti-dilutive awards were excluded from the calculation of diluted EPS.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2014 and 2013 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted  Average Common  Shares (Denominator)		Per Share Amount
For the Three Months ended September 30, 2014
Net income, basic	$	14,924		45,649	$	0.33
Add: potentially dilutive common shares - stock awards		-		89		-
Diluted	$	14,924		45,738	$	0.33
For the Three Months ended September 30, 2013
Net income, basic	$	7,946		24,895	$	0.32
Add: potentially dilutive common shares - stock awards		-		68		-
Diluted	$	7,946		24,963	$	0.32
For the Nine Months ended September 30, 2014
Net income, basic	$	37,519		46,269	$	0.81
Add: potentially dilutive common shares - stock awards		-		98		-
Diluted	$	37,519		46,367	$	0.81
For the Nine Months ended September 30, 2013
Net income, basic	$	26,392		24,987	$	1.06
Add: potentially dilutive common shares - stock awards		-		44		-
Diluted	$	26,392		25,031	$	1.06

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13. SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment provides loan, deposit, investment, and trust services to retail and commercial customers throughout Virginia. The community bank segment includes the Company’s one banking subsidiary which has 131 branches in total throughout Virginia as well as trust and wealth management services.  Non-bank affiliates of the Company include Union Investment Services, Inc., which provides full brokerage services, and Union Insurance Group, LLC, which offers various lines of insurance products.  The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland, and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

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

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

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charged the mortgage banking segment interest at the one month LIBOR rate plus 1.5% with no floor. These transactions are eliminated in the consolidation process. A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

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Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three and nine months ended September 30, 2014 and 2013 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

(Dollars in thousands)

	Community Bank		Mortgage			Eliminations			Consolidated
Three Months Ended September 30, 2014
Net interest income	$	64,162	$	317		$	-		$	64,479
Provision for loan losses		1,800		-			-			1,800
Net interest income after provision for loan losses		62,362		317			-			62,679
Noninterest income		14,308		2,604			(170	)		16,742
Noninterest expenses		56,188		3,903			(170	)		59,921
Income (loss) before income taxes		20,482		(982	)		-			19,500
Income tax expense (benefit)		4,930		(354	)		-			4,576
Net income (loss)	$	15,552	$	(628	)	$	-		$	14,924
Total assets	$	7,189,047	$	41,857		$	(36,570	)	$	7,194,334
Three Months Ended September 30, 2013
Net interest income	$	37,465	$	393		$	-		$	37,858
Provision for loan losses		1,800		-			-			1,800
Net interest income after provision for loan losses		35,665		393			-			36,058
Noninterest income		7,322		2,062			(168	)		9,216
Noninterest expenses		29,904		4,396			(168	)		34,132
Income (loss) before income taxes		13,083		(1,941	)		-			11,142
Income tax expense (benefit)		3,902		(706	)		-			3,196
Net income (loss)	$	9,181	$	(1,235	)	$	-		$	7,946
Total assets	$	4,041,661	$	69,010		$	(63,563	)	$	4,047,108
Nine Months Ended September 30, 2014
Net interest income	$	191,090	$	863		$	-		$	191,953
Provision for loan losses		3,300		-			-			3,300
Net interest income after provision for loan losses		187,790		863			-			188,653
Noninterest income		40,224		7,932			(511	)		47,645
Noninterest expenses		174,780		12,908			(511	)		187,177
Income (loss) before income taxes		53,234		(4,113	)		-			49,121
Income tax expense (benefit)		13,106		(1,504	)		-			11,602
Net income (loss)	$	40,128	$	(2,609	)	$	-		$	37,519
Total assets	$	7,189,047	$	41,857		$	(36,570	)	$	7,194,334
Nine Months Ended September 30, 2013
Net interest income	$	111,612	$	1,402		$	-		$	113,014
Provision for loan losses		4,850		-			-			4,850
Net interest income after provision for loan losses		106,762		1,402			-			108,164
Noninterest income		20,266		10,586			(503	)		30,349
Noninterest expenses		89,242		13,176			(503	)		101,915
Income (loss) before income taxes		37,786		(1,188	)		-			36,598
Income tax expense (benefit)		10,633		(427	)		-			10,206
Net income (loss)	$	27,153	$	(761	)	$	-		$	26,392
Total assets	$	4,041,661	$	69,010		$	(63,563	)	$	4,047,108

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Union Bankshares Corporation

Richmond, Virginia

We have reviewed the accompanying consolidated balance sheet of Union Bankshares Corporation and subsidiaries as of September 30, 2014, and the related consolidated statements of income and comprehensive income for the three and nine month periods ended September 30, 2014 and 2013, and the related consolidated changes in stockholders' equity and cash flows for the nine month period ended September 30, 2014 and 2013. These consolidated financial statements are the responsibility of the Company's management.

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

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of Union Bankshares Corporation and subsidiaries as of December 31, 2013, and the related statements of income, comprehensive income, changes in stockholder's equity, and cash flows for the year then ended (not presented herein); and in our report dated March 11, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2013, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Yount, Hyde & Barbour, P.C.

Winchester, Virginia

November 5, 2014

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

Management’s discussion and analysis is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Union Bankshares Corporation and its subsidiaries (collectively, the “Company”). This discussion and analysis should be read with the consolidated financial statements, the notes to the financial statements, and the other financial data included in this report, as well as the Company’s Annual Report on Form 10-K and management’s discussion and analysis for the year ended December 31, 2013. Highlighted in the discussion are material changes from prior reporting periods and any identifiable trends affecting the Company. Results of operations for the three and nine months ended September 30, 2014 and 2013 are not necessarily indicative of results that may be attained for any other period. Amounts are rounded for presentation purposes while some of the percentages presented are computed based on unrounded amounts.

FORWARD-LOOKING STATEMENTS

Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact.  Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events.  Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, the stock and bond markets, accounting standards or interpretations of existing standards, technology, consumer spending and savings habits, and mergers and acquisitions, including integration risk in connection with the Company’s acquisition of StellarOne such as potential deposit attrition, higher than expected costs, customer loss and business disruption, including, without limitation, potential difficulties in maintaining relationships with key personnel, and other integration related-matters. More information is available on the Company’s website, http://investors.bankatunion.com and on the SEC’s website, www.sec.gov. The information on the Company’s website is not a part of this Form 10-Q. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.

CRITICAL ACCOUNTING POLICIES

General

The accounting and reporting policies of the Company are in accordance with GAAP and conform to general practices within the banking industry. The Company’s financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions, and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses, and related disclosures. Different assumptions in the application of these policies could result in material changes in the Company’s consolidated financial position and/or results of operations.

The more critical accounting and reporting policies include the Company’s accounting for the allowance for loan losses, mergers and acquisitions, and goodwill and intangible assets. The Company’s accounting policies are fundamental to understanding the Company’s consolidated financial position and consolidated results of operations. Accordingly, the Company’s significant accounting policies are discussed in detail in Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The following is a summary of the Company’s critical accounting policies that are highly dependent on estimates, assumptions, and judgments.

- 46 -

Allowance for Loan Losses

The provision for loan losses charged to operations is an amount sufficient to bring the allowance for loan losses to an estimated balance that management considers adequate to absorb potential losses in the portfolio. Loans are charged against the allowance when management believes the collectability of the principal is unlikely. Recoveries of amounts previously charged-off are credited to the allowance. Management’s determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to make adjustments to the allowance based on their judgments about information available to them at the time of their examination.

The Company performs regular credit reviews of the loan portfolio to review the credit quality and adherence to its underwriting standards. The credit reviews consist of reviews by its Loan Review group and reviews performed by an independent third party. Upon origination, each commercial loan is assigned a risk rating ranging from one to nine, with loans closer to one having less risk. This risk rating scale is the Company’s primary credit quality indicator. Consumer loans are generally not risk rated; the primary credit quality indicator for this portfolio segment is delinquency status. The Company has various committees that review and ensure that the allowance for loan losses methodology is in accordance with GAAP and loss factors used appropriately reflect the risk characteristics of the loan portfolio.

The Company’s ALL consists of specific, general, and unallocated components.

Specific Reserve Component - The specific reserve component relates to impaired loans. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Upon being identified as impaired, for loans not considered to be collateral dependent, an allowance is established when the discounted cash flows of the impaired loan are lower than the carrying value of that loan. Nonaccrual loans under $100,000 and other impaired loans under $500,000 are aggregated based on similar risk characteristics. The level of credit impairment within the pool(s) is determined based on historical loss factors for loans with similar risk characteristics, taking into consideration environmental factors specifically related to the underlying pool. The impairment of collateral dependent loans is measured based on the fair value of the underlying collateral (based on independent appraisals), less selling costs, compared to the carrying value of the loan. If the Company determines that the value of an impaired collateral dependent loan is less than the recorded investment in the loan, it either recognizes an impairment reserve as a specific component to be provided for in the allowance for loan losses or charges off the deficiency if it is determined that such amount represents a confirmed loss. Typically, a loss is confirmed when the Company is moving towards foreclosure (or final disposition) of the underlying collateral, the collateral deficiency has not improved for two consecutive quarters, or when there is a payment default of 180 days, whichever occurs first.

The Company obtains independent appraisals from a pre-approved list of independent, third party appraisal firms located in the market in which the collateral is located. The Company’s approved appraiser list is continuously maintained to ensure the list only includes such appraisers that have the experience, reputation, character, and knowledge of the respective real estate market. At a minimum, it is ascertained that the appraiser is currently licensed in the state in which the property is located, experienced in the appraisal of properties similar to the property being appraised, has knowledge of current real estate market conditions and financing trends, and is reputable. The Company’s internal Real Estate Valuation Group, which reports to the Risk and Compliance Group, performs either a technical or administrative review of all appraisals obtained. A technical review will ensure the overall quality of the appraisal, while an administrative review ensures that all of the required components of an appraisal are present. Generally, independent appraisals are updated every 12 to 24 months or as necessary. The Company’s impairment analysis documents the date of the appraisal used in the analysis, whether the officer preparing the report deems it current, and, if not, allows for internal valuation adjustments with justification. Adjustments to appraisals generally include discounts for continued market deterioration subsequent to the appraisal date. Any adjustments from the appraised value to carrying value are documented in the impairment analysis, which is reviewed and approved by senior credit administration officers and the Special Assets Loan Committee. External appraisals are the primary source to value collateral dependent loans; however, the Company may also utilize values obtained through broker price opinions or other valuations sources. These alternative sources of value are used only if deemed to be more representative of value based on updated information regarding collateral resolution. Impairment analyses are updated, reviewed, and approved on a quarterly basis at or near the end of each reporting period.

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General Reserve Component – The general reserve component covers non-impaired loans and is derived from an estimate of credit losses adjusted for various environmental factors applicable to both commercial and consumer loan segments. The estimate of credit losses is a function of the product of net charge-off historical loss experience to the loan balance of the loan portfolio averaged during the preceding twelve quarters, as management has determined this to adequately reflect the losses inherent in the loan portfolio. The environmental factors consist of national, local, and portfolio characteristics and are applied to both the commercial and consumer segments. The following table shows the types of environmental factors management considers:

ENVIRONMENTAL FACTORS
Portfolio	National	Local
Experience and ability of lending team	Interest rates	Level of economic activity
Depth of lending team	Inflation	Unemployment
Pace of loan growth	Unemployment	Competition
Franchise expansion	Gross domestic product	Military/government impact
Execution of loan risk rating process	General market risk and other concerns
Degree of oversight / underwriting standards	Legislative and regulatory environment
Value of real estate serving as collateral
Delinquency levels in portfolio
Charge-off levels in portfolio
Credit concentrations / nature and volume of the portfolio

Unallocated Component – This component may be used to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. Together, the specific, general, and any unallocated allowance for loan loss represents management’s estimate of losses inherent in the current loan portfolio. Though provisions for loan losses may be based on specific loans, the entire allowance for loan losses is available for any loan management deems necessary to charge-off. At September 30, 2014, there were no material amounts considered unallocated as part of the allowance for loan losses.

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. 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. A loan that is classified substandard or worse is considered 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. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. The impaired loan policy is the same for each of the seven classes within the commercial portfolio segment.

For the consumer loan portfolio segment, large groups of smaller balance homogeneous loans are collectively evaluated for impairment. This evaluation subjects each of the Company’s homogenous pools to a historical loss factor derived from net charge-offs experienced over the preceding twelve quarters. The Company applies payments received on impaired loans to principal and interest based on the contractual terms until they are placed on nonaccrual status. All payments received are then applied to reduce the principal balance and recognition of interest income is terminated.

Business Combinations and Acquired Loans

The Company’s merger and acquisition strategy focuses on high-growth areas with strong market demographics and targets organizations that have a comparable corporate culture, strong performance, and good asset quality, among other factors.

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Business combinations are accounted for under ASC 805, Business Combinations, using the acquisition method of accounting. The acquisition method of accounting requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. To determine the fair values, the Company will continue to rely on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. Under the acquisition method of accounting, the Company will identify the acquirer and the closing date and apply applicable recognition principles and conditions. If they are necessary to implement its plan to exit an activity of an acquiree, costs that the Company expects, but is not obligated, to incur in the future are not liabilities at the acquisition date, nor are costs to terminate the employment of or relocate an acquiree’s employees. The Company does not recognize these costs as part of applying the acquisition method. Instead, the Company recognizes these costs as expenses in its post-combination financial statements in accordance with other applicable GAAP.

Acquisition-related costs are costs the Company incurs to effect a business combination. Those costs include advisory, legal, accounting, valuation, and other professional or consulting fees. Some other examples of acquisition-related costs to the Company include systems conversions, integration planning consultants, and advertising costs. The Company will account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities will be recognized in accordance with other applicable GAAP. These acquisition-related costs are included within the Consolidated Statements of Income classified within the noninterest expense caption.

Loans acquired in a business combination are recorded at fair value on the date of the acquisition. Loans acquired with deteriorated credit quality are accounted for in accordance with ASC 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality, and are initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loans. Loans acquired in business combinations with evidence of credit deterioration are not considered to be impaired unless they deteriorate further subsequent to the acquisition. Certain acquired loans, including performing loans and revolving lines of credit (consumer and commercial), are accounted for in accordance with ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, where the discount is accreted through earnings based on estimated cash flows over the estimated life of the loan.

Goodwill and Intangible Assets

The Company follows ASC 350, Goodwill and Other Intangible Assets, which prescribes the accounting for goodwill and intangible assets subsequent to initial recognition. The provisions of this guidance discontinued the amortization of goodwill and intangible assets with indefinite lives but require an impairment review at least annually and more frequently if certain impairment indicators are evident.

ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Union Bankshares Corporation is the largest community banking organization headquartered in Virginia and operates in all major banking markets of the Commonwealth. Union Bankshares Corporation is the holding company for Union First Market Bank, which provides banking, trust, and wealth management services and has a statewide presence of 131 bank branches and more than 200 ATMs. Non-bank affiliates of the holding company include: Union Investment Services, Inc., which provides full brokerage services; Union Mortgage Group, Inc., which provides a full line of mortgage products; and Union Insurance Group, LLC, which offers various lines of insurance products.

In May 2014, Union First Market Bank announced that it has successfully integrated StellarOne Bank into its operations. With the integration complete, the former StellarOne branches are now operating as Union First Market Bank branches.

The Company announced that, effective April 25, 2014, its corporate name changed from Union First Market Bankshares Corporation to Union Bankshares Corporation. The name change was approved at the Company’s annual meeting of shareholders held April 22, 2014. Shares of the Company’s common stock are traded on the NASDAQ Global Select Market under the symbol UBSH.

Additional information is available on the Company’s website at http://investors.bankatunion.com. The information contained on the Company’s website is not a part of or incorporated into this report.

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RESULTS OF OPERATIONS

Executive Overview

For the quarter ended September 30, 2014, the Company reported net income of $14.9 million and earnings per share of $0.33. Excluding after-tax acquisition-related expenses of $1.1 million, operating earnings⁽¹⁾ for the quarter were $16.0 million, which represents an increase of $7.6 million, or 90.4%, in operating earnings from the third quarter of 2013, primarily related to the StellarOne acquisition. Operating earnings per share were $0.35 and $0.34 for the quarters ended September 30, 2014 and 2013, respectively.

For the nine months ended September 30, 2014, the Company reported net income of $37.5 million and diluted earnings per share of $0.81. Excluding after-tax acquisition-related expenses of $13.2 million, operating earnings⁽¹⁾ for the nine months were $50.7 million, which represents an increase of $22.9 million, or 82.4%, in operating earnings from the first nine months of 2013, primarily related to the StellarOne acquisition. Operating earnings per share were $1.09 and $1.11 for the nine month periods ended September 30, 2014 and 2013, respectively.

The 2014 three and nine month financial results include the financial results of StellarOne, which the Company acquired on January 1, 2014.

· Third quarter operating earnings⁽¹⁾ for the community bank segment, which excludes after-tax acquisition-related expenses of $1.1 million, were $16.7 million, or $0.36 per share; year-to-date community bank segment operating earnings were $53.3 million, or $1.15 per share.

· The mortgage segment reported a net loss of $628,000, or $0.01 per share, for the quarter and a net loss of $2.6 million, or $0.06 per share, for the first nine months of 2014.

· Operating Return on Average Tangible Common Equity⁽¹⁾ (“ROTCE”) was 9.82% for the quarter ended September 30, 2014 compared to operating ROTCE⁽¹⁾ of 9.31% for the quarter ended September 30, 2013. The operating ROTCE⁽¹⁾ of the community bank segment was 10.26% for the third quarter of 2014.

· Operating Return on Average Assets⁽¹⁾ (“ROA”) was 0.88% for the quarter ended September 30, 2014 compared to operating ROA⁽¹⁾ of 0.83% for the third quarter in 2013. The operating ROA⁽¹⁾ of the community bank segment 0.91% for the third quarter of 2014.

· Operating efficiency ratio⁽¹⁾ of 69.9% was comparatively flat for the third quarter of 2014 from 69.6% in the third quarter of 2013. The operating efficiency ratio for the community bank segment was 67.7% for the third quarter of 2014.

· On January 31, 2014, the Company’s Board of Directors authorized a share repurchase program to purchase up to $65.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program is authorized through December 31, 2015. As of September 30, 2014, approximately 1.7 million common shares have been repurchased and approximately $21.6 million remained available under the repurchase program.

⁽¹⁾ These supplementary measures are provided because the Company believes they may be valuable to investors. For a reconciliation of the non-GAAP measures operating earnings, EPS, ROTCE, ROA, and efficiency ratio, see “NON-GAAP MEASURES” included in this Item 2.

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Net Interest Income

	For the Three Months Ended
	Dollars in thousands
	09/30/14			09/30/13			Change
Average interest-earning assets	$	6,423,743		$	3,703,449		$	2,720,294
Interest income (FTE)	$	71,649		$	44,157		$	27,492
Yield on interest-earning assets		4.43	%		4.73	%		(30	)bps
Average interest-bearing liabilities	$	5,015,129		$	2,892,957		$	2,122,172
Interest expense	$	5,112		$	4,983		$	129
Cost of interest-bearing liabilities		0.40	%		0.68	%		(28	)bps
Cost of funds		0.32	%		0.53	%		(21	)bps
Net Interest Income (FTE)	$	66,537		$	39,174		$	27,363
Net Interest Margin (FTE)		4.11	%		4.20	%		(9	)bps
Core Net Interest Margin (FTE) (1)		3.92	%		4.16	%		(24	)bps

⁽¹⁾ Core net interest margin (FTE) excludes the impact of acquisition accounting accretion and amortization adjustments in net interest income.

For the third quarter of 2014, tax-equivalent net interest income was $66.5 million, an increase of $27.4 million from the third quarter of 2013, a result of a $2.7 billion increase in average interest-earning assets and a $2.1 billion increase in average interest-bearing liabilities, primarily due to the StellarOne acquisition. The third quarter tax-equivalent net interest margin decreased by 9 bps to 4.11% compared to 4.20% in the prior year. Core tax-equivalent net interest margin (which excludes the 19 bps impact of acquisition accounting accretion in the third quarter of 2014 and 4 bps in the third quarter of 2013) decreased by 24 bps from 4.16% in the third quarter of 2013 to 3.92%. Excluding the impact of acquisition accounting accretion in 2014 and 2013, the decline in net interest margin was driven by a decrease in earning asset yields outpacing the decline in cost of interest bearing liabilities. Yields on loans declined as new loans and renewed loans were originated and repriced at lower rates and investment securities yields declined driven by cash flows from securities reinvested at lower yields. In addition, the declines in net interest margin and earning asset yields were affected by the StellarOne acquisition, which carried a lower net interest margin.

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	For the Nine Months Ended
	Dollars in thousands
	09/30/14			09/30/13			Change
Average interest-earning assets	$	6,438,924		$	3,717,470		$	2,721,454
Interest income (FTE)	$	212,556		$	132,680		$	79,876
Yield on interest-earning assets		4.41	%		4.77	%		(36	)bps
Average interest-bearing liabilities	$	5,072,398		$	2,918,682		$	2,153,716
Interest expense	$	14,481		$	15,798		$	(1,317	)
Cost of interest-bearing liabilities		0.38	%		0.72	%		(34	)bps
Cost of funds		0.30	%		0.57	%		(27	)bps
Net Interest Income (FTE)	$	198,075		$	116,882		$	81,193
Net Interest Margin (FTE)		4.11	%		4.20	%		(9	)bps
Core Net Interest Margin (FTE) (1)		3.95	%		4.16	%		(21	)bps

⁽¹⁾ Core net interest margin (FTE) excludes the impact of acquisition accounting accretion and amortization adjustments in net interest income.

For the nine months ended September 30, 2014, tax-equivalent net interest income was $198.1 million, an increase of $81.2 million from the same period of 2013, a result of a $2.7 billion increase in average interest-earning assets and a $2.2 billion increase in average interest-bearing liabilities, primarily due to the StellarOne acquisition. The year-to-date tax-equivalent net interest margin decreased by 9 bps to 4.11% compared to 4.20% in the prior year. Core tax-equivalent net interest margin (which excludes the 16 bps impact of acquisition accounting accretion in 2014 and 4 bps in 2013) decreased by 21 bps from 4.16% for the nine months ended September 30, 2013 to 3.95%. Excluding the impact of acquisition accounting accretion in 2014 and 2013, the decline in net interest margin was driven by a decrease in earning asset yields outpacing the decline in cost of interest bearing liabilities. Yields on loans declined as new loans and renewed loans were originated and repriced at lower rates and investment securities yields declined driven by cash flows from securities reinvested at lower yields. In addition, the declines in net interest margin and earning asset yields were affected by the StellarOne acquisition, which carried a lower net interest margin.

The Company continues to believe that net interest margin will decline modestly over the next several quarters as decreases in earning asset yields are projected to outpace declines in interest-bearing liabilities rates.

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

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

	For the Three Months Ended September 30,
	2014								2013
	Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	738,932		$	3,883		2.08	%	$	375,257		$	1,849		1.95	%
Tax-exempt		404,371			5,150		5.05	%		223,595			3,222		5.72	%
Total securities		1,143,303			9,033		3.13	%		598,852			5,071		3.36	%
Loans, net (2) (3)		5,196,116			62,082		4.74	%		2,997,083			38,271		5.07	%
Loans held for sale		50,393			513		4.04	%		97,993			812		3.29	%
Federal funds sold		684			-		0.18	%		415			-		0.20	%
Money market investments		1			-		0.00	%		1			-		0.00	%
Interest-bearing deposits in other banks		33,246			21		0.24	%		9,105			3		0.14	%
Total earning assets		6,423,743			71,649		4.43	%		3,703,449			44,157		4.73	%
Allowance for loan losses		(31,631	)							(34,302	)
Total non-earning assets		849,712								368,783
Total assets	$	7,241,824							$	4,037,930
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	2,582,746			1,247		0.19	%	$	1,403,513			641		0.18	%
Regular savings		554,202			275		0.20	%		229,345			174		0.30	%
Time deposits (4)		1,370,299			1,505		0.44	%		934,302			2,556		1.09	%
Total interest-bearing deposits		4,507,247			3,027		0.27	%		2,567,160			3,371		0.52	%
Other borrowings (5)		507,882			2,085		1.63	%		325,797			1,612		1.96	%
Total interest-bearing liabilities		5,015,129			5,112		0.40	%		2,892,957			4,983		0.68	%
Noninterest-bearing liabilities:
Demand deposits		1,194,505								673,823
Other liabilities		52,531								39,838
Total liabilities		6,262,165								3,606,618
Stockholders' equity		979,659								431,312
Total liabilities and stockholders' equity	$	7,241,824							$	4,037,930
Net interest income				$	66,537							$	39,174
Interest rate spread (6)							4.03	%							4.05	%
Interest expense as a percent of average earning assets							0.32	%							0.53	%
Net interest margin (7)							4.11	%							4.20	%

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

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

(3) Interest income on loans includes $846,000 and $471,000 for the three months ended September 30, 2014 and 2013 in accretion of the fair market value adjustments related to acquisitions.

(4) Interest expense on certificates of deposits includes $2.0 million and $2,000 for the three months ended September 30, 2014 and 2013 in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on borrowings includes $262,000 and $122,000 for the three months ended September 30, 2014 and 2013 in amortization of the fair market value adjustments related to acquisitions.

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

(7) Core net interest margin excludes purchase accounting adjustments and was 3.92% and 4.16% for the three months ended September 30, 2014 and 2013.

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

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

	For the Nine Months Ended September 30,
	2014								2013
	Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	716,996		$	11,391		2.12	%	$	385,023		$	5,856		2.03	%
Tax-exempt		401,111			15,392		5.13	%		217,874			9,438		5.79	%
Total securities (2)		1,118,107			26,783		3.20	%		602,897			15,294		3.39	%
Loans, net (3) (4)		5,240,610			184,257		4.70	%		2,979,514			114,413		5.13	%
Loans held for sale		51,021			1,474		3.86	%		123,860			2,958		3.19	%
Federal funds sold		493			1		0.17	%		462			1		0.22	%
Money market investments		1			-		0.00	%		1			-		0.00	%
Interest-bearing deposits in other banks		28,692			41		0.19	%		10,736			14		0.18	%
Total earning assets		6,438,924			212,556		4.41	%		3,717,470			132,680		4.77	%
Allowance for loan losses		(31,128	)							(34,903	)
Total non-earning assets		847,608								361,623
Total assets	$	7,255,404							$	4,044,190
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	2,568,357			3,536		0.18	%	$	1,401,279			2,055		0.20	%
Regular savings		553,501			785		0.19	%		223,885			500		0.30	%
Time deposits (5)		1,414,674			3,512		0.33	%		984,677			8,478		1.15	%
Total interest-bearing deposits		4,536,532			7,833		0.23	%		2,609,841			11,033		0.57	%
Other borrowings (6)		535,866			6,648		1.66	%		308,841			4,765		2.06	%
Total interest-bearing liabilities		5,072,398			14,481		0.38	%		2,918,682			15,798		0.72	%
Noninterest-bearing liabilities:
Demand deposits		1,143,942								653,515
Other liabilities		53,660								37,373
Total liabilities		6,270,000								3,609,570
Stockholders' equity		985,404								434,620
Total liabilities and stockholders' equity	$	7,255,404							$	4,044,190
Net interest income				$	198,075							$	116,882
Interest rate spread (7)							4.03	%							4.05	%
Interest expense as a percent of average earning assets							0.30	%							0.57	%
Net interest margin (8)							4.11	%							4.20	%

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

(2) Interest income on securities includes $0 and $15,000 for the nine months ended September 30, 2014 and 2013 in accretion of the fair market value adjustments.

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

(4) Interest income on loans includes $81,000 and $1.6 million for the nine months ended September 30, 2014 and 2013 in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on certificates of deposits includes $7.4 million and $5,000 for the nine months ended September 30, 2014 and 2013 in accretion of the fair market value adjustments related to acquisitions.

(6) Interest expense on borrowings includes $412,000 and $367,000 for the nine months ended September 30, 2014 and 2013 in amortization of the fair market value adjustments related to acquisitions.

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

(8) Core net interest margin excludes purchase accounting adjustments and was 3.95% and 4.16% for the nine months ended September 30, 2014 and 2013.

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

	Three Months Ended									Nine Months Ended
	September 30, 2014 vs. September 30, 2013									September 30, 2014 vs. September 30, 2013
	Increase (Decrease) Due to Change in:									Increase (Decrease) Due to Change in:
	Volume			Rate			Total			Volume			Rate			Total
Earning Assets:
Securities:
Taxable	$	1,904		$	130		$	2,034		$	5,263		$	272		$	5,535
Tax-exempt		2,344			(416	)		1,928			7,137			(1,183	)		5,954
Total securities		4,248			(286	)		3,962			12,400			(911	)		11,489
Loans, net		26,449			(2,638	)		23,811			80,158			(10,314	)		69,844
Loans held for sale		(455	)		156			(299	)		(2,008	)		524			(1,484	)
Federal funds sold		-			-			-			-			-			-
Interest-bearing deposits in other banks		15			3			18			27			-			27
Total earning assets	$	30,257		$	(2,765	)	$	27,492		$	90,577		$	(10,701	)	$	79,876
Interest-Bearing Liabilities:
Interest-bearing deposits:
Transaction and money market accounts	$	571		$	35		$	606		$	1,643		$	(162	)	$	1,481
Regular savings		176			(75	)		101			523			(238	)		285
Time Deposits		880			(1,931	)		(1,051	)		2,707			(7,673	)		(4,966	)
Total interest-bearing deposits		1,627			(1,971	)		(344	)		4,873			(8,073	)		(3,200	)
Other borrowings		780			(307	)		473			2,952			(1,069	)		1,883
Total interest-bearing liabilities		2,407			(2,278	)		129			7,825			(9,142	)		(1,317	)
Change in net interest income	$	27,850		$	(487	)	$	27,363		$	82,752		$	(1,559	)	$	81,193

The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. The 2014 and remaining estimated discount/premium and net accretion impact are reflected in the following table (dollars in thousands):

	Loan Accretion			Certificates of Deposit		Borrowings			Total
For the quarter ended March 31, 2014	$	(546	)		2,921		75		$	2,450
For the quarter ended June 30, 2014		(219	)		2,460		75			2,316
For the quarter ended September 30, 2014		846			1,998		262			3,106
For the remaining three months of 2014		106			1,536		137			1,779
For the years ending:
2015		1,701			1,843		424			3,968
2016		2,619			-		458			3,077
2017		3,057			-		170			3,227
2018		2,695			-		(143	)		2,552
2019		2,152			-		(286	)		1,866
Thereafter		13,178			-		(5,923	)		7,255

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Noninterest Income

	For the Three Months Ended
	Dollars in thousands
	September 30,						Change
	2014			2013			$			%
Noninterest income:
Service charges on deposit accounts	$	4,458		$	2,474		$	1,984			80.2	%
Other service charges, commissions and fees		5,055			3,185			1,870			58.7	%
Gains on securities transactions, net		995			5			990			NM
Gains on sales of mortgage loans, net of commissions		2,598			2,061			537			26.1	%
Losses on bank premises, net		(79	)		(7	)		(72	)		NM
Other operating income		3,715			1,498			2,217			148.0	%
Total noninterest income	$	16,742		$	9,216		$	7,526			81.7	%
Mortgage segment operations	$	(2,604	)	$	(2,062	)	$	(542	)		26.3	%
Intercompany eliminations		170			168			2			1.2	%
Community Bank segment	$	14,308		$	7,322		$	6,986			95.4	%

NM - Not Meaningful

For the quarter ended September 30, 2014, noninterest income increased $7.5 million, or 81.7%, to $16.7 million from $9.2 million in the third quarter of 2013. A majority of this increase is concentrated in customer related noninterest income (service charges on deposit accounts, debit card interchange income, and income from wealth management services) due to the current quarter impact of the StellarOne acquisition. Gains on sales of mortgage loans, net of commissions, increased $537,000, or 26.1%, from the third quarter of 2013, as improved gain on sale margins outpaced the decline in mortgage loan origination volume of $40.9 million in the third quarter from $218.9 million during the same period in 2013. Gains on sales of mortgage loans include the results of StellarOne’s mortgage segment beginning in the first quarter of 2014.

	For the Nine Months Ended
	Dollars in thousands
	September 30,						Change
	2014			2013			$			%
Noninterest income:
Service charges on deposit accounts	$	13,281		$	7,093		$	6,188			87.2	%
Other service charges, commissions and fees		15,138			9,214			5,924			64.3	%
Gains on securities transactions		1,449			47			1,402			NM
Gains on sales of mortgage loans, net of commissions		7,925			10,581			(2,656	)		-25.1	%
Losses on bank premises		(384	)		(337	)		(47	)		NM
Other operating income		10,236			3,751			6,485			172.9	%
Total noninterest income	$	47,645		$	30,349		$	17,296			57.0	%
Mortgage segment operations	$	(7,932	)	$	(10,586	)	$	2,654			-25.1	%
Intercompany eliminations		511			503			8			1.6	%
Community Bank segment	$	40,224		$	20,266		$	19,958			98.5	%

NM - Not Meaningful

For the nine months ended September 30, 2014, noninterest income increased $17.3 million, or 57.0%, to $47.6 million from $30.3 million in the first nine months of 2013. The significant majority of this increase is concentrated in customer related noninterest income (service charges on deposit accounts, debit card interchange income, and income from wealth management services) due to the current year impact of the StellarOne acquisition. Gains on sales of mortgage loans, net of commissions, which include the results of StellarOne’s mortgage segment beginning in the first quarter of 2014, decreased $2.7 million, or 25.1%, compared to the first nine months of 2013, primarily driven by the decline in mortgage loan originations of $263.1 million from $785.2 million during the first nine months of 2013.

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Noninterest expense

	For the Three Months Ended
	Dollars in thousands
	September 30,						Change
	2014			2013			$		%
Noninterest expense:
Salaries and benefits	$	26,060		$	17,416		$	8,644		49.6	%
Occupancy expenses		4,902			2,820			2,082		73.8	%
Furniture and equipment expenses		3,050			1,665			1,385		83.2	%
OREO and credit-related expenses (1)		6,559			1,601			4,958		309.7	%
Acquisition-related expenses		1,695			473			1,222		NM
Other operating expenses		17,655			10,157			7,498		73.8	%
Total noninterest expense	$	59,921		$	34,132		$	25,789		75.6	%
Mortgage segment operations	$	(3,903	)	$	(4,396	)	$	493		-11.2	%
Intercompany eliminations		170			168			2		1.2	%
Community Bank segment	$	56,188		$	29,904		$	26,284		87.9	%

NM - Not Meaningful

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

For the quarter ended September 30, 2014, noninterest expense increased $25.8 million to $59.9 million from $34.1 million when compared to the third quarter of 2013. Excluding acquisition-related costs of $1.7 million in the current quarter and $473,000 in the third quarter of 2013, noninterest expense increased $24.6 million, or 73.0%, compared to the third quarter of the prior year; the increase is primarily due to the acquisition of StellarOne in 2014 and $6.2 million in OREO valuation adjustments recorded in the current quarter. The Company’s operating efficiency ratio, which excludes acquisition costs, was 69.9% compared to 69.6% for the third quarter of 2013.

	For the Nine Months Ended
	Dollars in thousands
	September 30,						Change
	2014			2013			$		%
Noninterest expense:
Salaries and benefits	$	83,726		$	53,294		$	30,432		57.1	%
Occupancy expenses		15,184			8,439			6,745		79.9	%
Furniture and equipment expenses		8,555			5,250			3,305		63.0	%
OREO and credit-related expenses (1)		10,254			3,159			7,095		224.6	%
Acquisition-related expenses		19,524			1,393			18,131		NM
Other operating expenses		49,934			30,380			19,554		64.4	%
Total noninterest expense	$	187,177		$	101,915		$	85,262		83.7	%
Mortgage segment operations	$	(12,908	)	$	(13,176	)	$	268		-2.0	%
Intercompany eliminations		511			503			8		1.6	%
Community Bank segment	$	174,780		$	89,242		$	85,538		95.8	%

NM - Not Meaningful

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

For the nine months ended September 30, 2014, noninterest expense increased $85.3 million to $187.2 million from $101.9 million when compared to the first nine months of 2013. Excluding acquisition-related costs of $19.5 million in the first nine months of the year compared to $1.4 million during the same period in the prior year, noninterest expense increased $67.1 million, or 66.8%; the increase is primarily due to the acquisition of StellarOne in 2014 and $7.3 million in OREO valuation adjustments recorded in the current year. The Company’s operating efficiency ratio, which excludes acquisition costs, was comparatively unchanged at 68.2% compared to 68.3% for the first nine months of 2013.

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SEGMENT INFORMATION

Community Bank Segment

For the three months ended September 30, 2014, which included the full-quarter impact of the StellarOne acquisition, net income of $15.6 million increased $6.4 million, or 69.4%, from the prior year’s third quarter. Excluding after-tax acquisition-related costs of $1.1 million and $471,000 in the third quarters of 2014 and 2013, respectively, net income increased $7.0 million, or 72.5%. Net interest income increased $26.7 million from the same period last year, largely a result of an increase of $2.7 billion in average earning assets and $2.1 billion in average interest bearing liabilities resulting from the StellarOne acquisition. The provision for loan losses for the current quarter was $1.8 million, unchanged from the same quarter a year ago.

Noninterest income increased $7.0 million from $7.3 million in the third quarter of 2013 to $14.3 million in the third quarter of 2014. The majority of the current quarter increase was in customer related noninterest income (services charges on deposit accounts, debit card interchange income, and income from wealth management services) and is primarily due to the acquisition of StellarOne. Noninterest expense increased $26.3 million from $29.9 million in the third quarter of 2013 to $56.2 million in the current quarter. Excluding current quarter and prior year third quarter acquisition-related costs of $1.7 million and $473,000, respectively, noninterest expense increased $25.1 million compared to the third quarter of 2013. The increase in noninterest expense is largely related to the acquisition of StellarOne and $6.2 million in OREO valuation adjustments taken in the current quarter. The community banking segment’s operating efficiency ratio was 67.7% compared to 63.8% for the third quarter of 2013.

For the nine months ended September 30, 2014, net income increased $13.0 million, or 47.8%, to $40.1 million when compared to the same period a year ago; excluding after-tax acquisition-related costs of $13.2 million and $1.4 million, respectively, in 2014 and 2013, net income increased $24.7 million, or 86.7%. These year-to-date earnings reflect a three-quarter impact of the StellarOne acquisition. Net interest income was $191.1 million, an increase of $79.5 million from the first nine months of 2013, largely a result of an increase of $2.7 billion in average earning assets and $2.2 billion in average interest bearing liabilities resulting from the StellarOne acquisition. The provision for loan losses declined $1.6 million due to improvements in asset quality and current year recovery of a loan that was previously charged-off in 2012.

Noninterest income increased $19.9 million from $20.3 million in the first nine months of 2013 to $40.2 million in the first nine months of 2014. The majority of this year-to-date increase was in customer related noninterest income (services charges on deposit accounts, debit card interchange income, and income from wealth management services) and is primarily due to the acquisition of StellarOne. Noninterest expense increased $85.6 million from $89.2 million in the first nine months of 2013 to $174.8 million in the current year. Excluding acquisition-related costs of $19.5 million and $1.4 million, respectively, in 2014 and 2013, noninterest expense increased $67.4 million compared to the same period in 2013. The increase in noninterest expense is largely related to the acquisition of StellarOne and $7.3 million in OREO valuation adjustments recorded in the current year. The community banking segment’s operating efficiency ratio was 65.4% compared to 64.7% for the first nine months of 2013.

Mortgage Segment

The mortgage segment reported a net loss of $628,000 for the third quarter of 2014, an improvement of $607,000 from a loss of $1.2 million in the third quarter of 2013. The improvement was largely a result of lower operating expenses and higher margins on sales of mortgage loans. Gains on sales of mortgage loans, net of commissions, which includes the results of StellarOne’s mortgage segment beginning in the first quarter of 2014, increased $537,000, or 26.1%, from the third quarter of 2013, despite a decline in mortgage loan originations of $40.9 million. Noninterest expense decreased $493,000, largely a result of lower variable volume-related costs and lower personnel costs.

The mortgage segment reported a net loss of $2.6 million for the first nine months of 2014, an increased loss of $1.8 million from the first nine months of 2013, as elevated expense levels resulting from excess loan origination processing capacity outpaced revenue generated by lower mortgage loan origination volumes. Gains on sales of mortgage loans, net of commissions, which include the results of StellarOne’s mortgage segment beginning in the first quarter of 2014, decreased $2.7 million, or 25.1%, compared to the first nine months of 2013 primarily driven by the decline in mortgage loan originations. Noninterest expense decreased $268,000, largely a result of cost control initiatives and lower volume-related loan production expenses. 

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Income Taxes

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

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

The effective tax rate for the three months ended September 30, 2014 and 2013 was 23.5% and 28.7%, respectively; the effective tax rate for the nine months ended September 30, 2014 and 2013 was 23.6% and 27.9%, respectively. The decline in the effective tax rate is primarily related to tax-exempt interest income on the investment portfolio and tax-exempt bank-owned life insurance income being a larger percentage of pre-tax income during 2014 due to elevated merger-related costs included in pre-tax income.

BALANCE SHEET

At September 30, 2014, total assets were $7.2 billion, an increase of $3.0 billion from December 31, 2013 and an increase of $3.1 billion from September 30, 2013, reflecting the impact of the StellarOne acquisition.

On January 1, 2014, the Company acquired StellarOne. Below is a summary of the transaction and related impact on the Company’s balance sheet:

· The fair value of assets acquired equaled $2.959 billion and the fair value of liabilities assumed equaled $2.647 billion.

· Total goodwill arising from the transaction equaled $237.5 million.

· Gross loans acquired equaled $2.283 billion with a fair value of $2.239 billion.

· Total deposits acquired equaled $2.469 billion with a fair value of $2.480 billion.

At September 30, 2014, loans net of unearned income were $5.2 billion, an increase of $2.1 billion from December 31, 2013. At September 30, 2014, total deposits were $5.6 billion, an increase of $2.4 billion from December 31, 2013.

On January 31, 2014, the Company’s Board of Directors authorized a share repurchase program to purchase up to $65.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program is authorized through December 31, 2015. During the nine months ended September 30, 2014, approximately 1.7 million common shares have been repurchased and, as of September 30, 2014, approximately $21.6 million remained available under the repurchase program. As of October 29, 2014, approximately 1.8 million common shares have been repurchased and approximately $20.1 million remained available under the repurchase program.

Securities

At September 30, 2014, the Company had total investments in the amount of $1.1 billion, or 15.9% of total assets, as compared to $703.4 million, or 16.8% of total assets, at December 31, 2013. The Company seeks to diversify its portfolio to minimize risk. It focuses on purchasing mortgage-backed securities for cash flow and reinvestment opportunities and securities issued by states and political subdivisions due to the tax benefits and the higher yield offered from these securities. All of the Company’s mortgage-backed securities are investment grade. The investment portfolio has a high percentage of municipals and mortgage-backed securities; therefore a higher taxable equivalent yield exists on the portfolio compared to its peers. The Company does not engage in structured derivative or hedging activities within the investment portfolio.

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The table below sets forth a summary of the securities available for sale and restricted stock, at fair value as of the dates indicated (dollars in thousands):

	September 30,		December 31,
	2014		2013
U.S. government and agency securities	$	1,931	$	2,153
Obligations of states and political subdivisions		435,657		254,830
Corporate and other bonds		78,899		9,434
Mortgage-backed securities		569,328		407,362
Other securities		9,821		3,569
Total securities available for sale, at fair value		1,095,636		677,348
Federal Reserve Bank stock		23,834		6,734
Federal Home Loan Bank stock		24,720		19,302
Total restricted stock		48,554		26,036
Total investments	$	1,144,190	$	703,384

During each quarter and at year end, the Company conducts an assessment of the securities portfolio for OTTI consideration. The Company determined that a single issuer trust preferred security incurred credit-related OTTI of $400,000 during the year ended December 31, 2011. During the quarter ended June 30, 2014, the trust preferred security was called at a premium.  As a result, the Company recognized a gain on sale of the previously written down security of $400,000 in the second quarter of 2014. No OTTI was recognized in 2012, 2013, or for the first nine months of 2014. The Company monitors the portfolio, which is subject to liquidity needs, market rate changes, and credit risk changes, to determine whether adjustments are needed. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

- 60 -

The following table summarizes the contractual maturity of securities available for sale at fair value and their weighted average yields as of September 30, 2014 (dollars in thousands):

	1 Year or Less		1 - 5 Years		5 - 10 Years		Over 10 Years and Equity Securities		Total
U.S. government and agency securities:
Amortized cost	$	-	$	1,310	$	-	$	18	$	1,328
Fair value		-		1,342		-		589		1,931
Weighted average yield (1)		-		2.86		-		-		2.82
Mortgage backed securities:
Amortized cost		69		16,369		155,564		390,227		562,229
Fair value		74		16,706		157,167		395,381		569,328
Weighted average yield (1)		5.56		2.45		1.71		1.93		1.89
Obligations of states and political subdivisions:
Amortized cost		6,084		20,027		120,022		273,392		419,525
Fair value		6,107		20,646		124,670		284,234		435,657
Weighted average yield (1)		3.41		3.62		4.73		5.00		4.83
Corporate bonds and other securities:
Amortized cost		11,656		106		7,314		69,816		88,892
Fair value		11,674		107		7,304		69,635		88,720
Weighted average yield (1)		1.99		4.61		1.07		1.99		1.92
Total securities available for sale:
Amortized cost		17,809		37,812		282,900		733,453		1,071,974
Fair value		17,855		38,801		289,141		749,839		1,095,636
Weighted average yield (1)		2.49		3.09		2.98		3.08		3.04

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

As of September 30, 2014, the Company maintained a diversified municipal bond portfolio with approximately 75% of its holdings in general obligation issues and the remainder backed by revenue bonds. Issuances within the State of Washington represented 10% and issuances within the State of Texas represented 15% of the municipal portfolio; no other state had a concentration above 10%. Approximately 96% of municipal holdings are considered investment grade by Moody’s or Standard & Poor’s. The non-investment grade securities are principally insured Texas municipalities with no underlying rating.  When purchasing municipal securities, the Company focuses on strong underlying ratings for general obligation issuers or bonds backed by essential service revenues.

Liquidity

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

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As of September 30, 2014, the cash, interest-bearing deposits in other banks, money market investments, federal funds sold, loans held for sale, and loans that mature within one year totaled $1.7 billion, or 27.3 %, of total earning assets. As of September 30, 2014, approximately $1.5 billion, or 29.4%, of total loans are scheduled to mature within one year based on contractual maturity, adjusted for expected prepayments.

Loan Portfolio

Loans, net of unearned income, were $5.2 billion at September 30, 2014 and were $3.0 billion at both December 31, 2013 and September 30, 2013. Loans secured by real estate continue to represent the Company’s largest category, comprising 85.5% of the total loan portfolio at September 30, 2014.

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

	September 30,				June 30,				March 31,				December 31,				September 30,
	2014				2014				2014				2013				2013
Loans secured by real estate:
Residential 1-4 family	$	931,672	18.0	%	$	940,121	18.0	%	$	930,744	17.6	%	$	475,688	15.7	%	$	473,967	15.8	%
Commercial		1,994,138	38.5	%		2,052,530	39.3	%		2,066,468	39.3	%		1,094,451	36.0	%		1,085,971	36.2	%
Construction, land development and other land loans		611,737	11.8	%		613,027	11.7	%		650,066	12.3	%		470,684	15.5	%		469,867	15.7	%
Second mortgages		61,372	1.2	%		66,477	1.3	%		67,695	1.3	%		34,891	1.1	%		36,185	1.2	%
Equity lines of credit		514,705	10.0	%		517,411	9.9	%		519,308	9.8	%		302,965	10.0	%		300,329	10.0	%
Multifamily		280,116	5.4	%		257,819	4.9	%		258,522	4.9	%		146,433	4.8	%		123,594	4.1	%
Farm land		28,724	0.6	%		29,528	0.6	%		32,500	0.6	%		20,769	0.7	%		21,082	0.7	%
Total real estate loans		4,422,464	85.5	%		4,476,913	85.7	%		4,525,303	85.8	%		2,545,881	83.8	%		2,510,995	83.7	%
Commercial Loans		362,361	7.0	%		373,406	7.1	%		368,949	7.0	%		194,809	6.4	%		185,910	6.2	%
Consumer installment loans
Personal		308,719	6.0	%		299,663	5.7	%		300,809	5.7	%		238,368	7.8	%		240,549	8.0	%
Credit cards		23,736	0.5	%		23,432	0.4	%		22,316	0.4	%		23,211	0.8	%		21,978	0.7	%
Total consumer installment loans		332,455	6.5	%		323,095	6.1	%		323,125	6.1	%		261,579	8.6	%		262,527	8.7	%
All other loans		53,723	1.0	%		59,655	1.1	%		56,821	1.1	%		37,099	1.2	%		42,814	1.4	%
Gross loans	$	5,171,003	100.0	%	$	5,233,069	100.0	%	$	5,274,198	100.0	%	$	3,039,368	100.0	%	$	3,002,246	100.0	%

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The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of September 30, 2014 (dollars in thousands):

					Variable Rate						Fixed Rate
	Total Maturities		Less than 1 year		Total		1-5 years		More than 5 years		Total		1-5 years		More than 5 years
Loans secured by real estate:
Residential 1-4 family	$	931,672	$	96,548	$	274,438	$	38,567	$	235,871	$	560,686	$	275,676	$	285,010
Commercial		1,994,138		349,078		173,986		152,537		21,449		1,471,074		963,712		507,362
Construction, land development and other land loans		611,737		448,489		9,379		3,261		6,118		153,869		131,543		22,326
Second mortgages		61,372		11,300		3,798		1,172		2,626		46,274		18,159		28,115
Equity lines of credit		514,705		349,285		2,303		236		2,067		163,117		26,952		136,165
Multifamily		280,116		62,006		24,849		22,344		2,505		193,261		131,671		61,590
Farm land		28,724		15,255		692		481		211		12,777		10,179		2,598
Total real estate loans		4,422,464		1,331,961		489,445		218,598		270,847		2,601,058		1,557,892		1,043,166
Commercial Loans		362,361		149,954		46,403		46,403		-		166,004		133,108		32,896
Consumer installment loans
Personal		308,719		46,070		-		-		-		262,649		117,617		145,032
Credit cards		23,736		23,736		-		-		-		-		-		-
Total consumer installment loans		332,455		69,806		-		-		-		262,649		117,617		145,032
All other loans		53,723		10,262		3,007		3,007		-		40,454		7,400		33,054
Gross loans	$	5,171,003	$	1,561,983	$	538,855	$	268,008	$	270,847	$	3,070,165	$	1,816,017	$	1,254,148

While the current economic environment is challenging, the Company remains committed to originating soundly underwritten loans to qualifying borrowers within its markets. The Company is focused on providing community-based financial services and discourages the origination of portfolio loans outside of its principal trade areas. As reflected in the loan table, at September 30, 2014, the largest component of the Company’s loan portfolio consisted of real estate loans, concentrated in commercial, construction, and residential 1-4 family. The risks attributable to these concentrations are mitigated by the Company’s credit underwriting and monitoring processes, including oversight by a centralized credit administration function and credit policy and risk management committee, as well as seasoned bankers focusing their lending to borrowers with proven track records in markets with which the Company is familiar. UMG serves as a mortgage brokerage operation, selling the majority of its loan production in the secondary market or selling loans to meet the Bank’s current asset/liability management needs.

Asset Quality

Overview

During 2014, the Company has experienced increases in both nonaccrual loan and OREO balances from the prior year. The increase in OREO balances has been mostly attributable to closed bank premises related to the StellarOne acquisition that were moved to OREO. Net charge-offs year-to-date remained lower than for the same period in the prior year. Both the allowance for loan losses to total loans ratio and allowance for loan losses to total loans ratio, adjusted for acquisition accounting, were down from the prior year. The magnitude of any change in the real estate market and its impact on the Company is still largely dependent upon continued recovery of residential housing and commercial real estate and the pace at which the local economies in the Company’s operating markets improve. All metrics discussed below exclude PCI loans aggregating $119.7 million (net of fair value mark).

Troubled Debt Restructurings

The total recorded investment in TDRs as of September 30, 2014 was $29.0 million, a decrease of $12.8 million, or 30.6%, from $41.8 million at December 31, 2013 and a decline of $18.9 million, or 39.5%, from $47.9 million at September 30, 2013. Of the $29.0 million of TDRs at September 30, 2014, $26.2 million, or 90.3%, were considered performing while the remaining $2.8 million were considered nonperforming. The decrease in the TDR balance from December 31, 2013 is attributable to loans removed from TDR status of $8.3 million, charge-offs of $2.9 million, and net payments of $3.9 million, partially offset by $1.4 million in additions and $849,000 in acquired TDRs. The TDRs related to the StellarOne acquisition were related to loans with a revolving feature and, therefore, excluded from being classified as PCI in accordance with ASC 310-30. Loans removed from TDR status represent restructured loans with a market rate of interest at the time of the restructuring. These loans have performed in accordance with their modified terms for twelve consecutive months and were no longer considered impaired. Loans removed from TDR status are collectively evaluated for impairment; due to the significant improvement in the expected future cash flows, these loans are grouped based on their primary risk characteristics, typically using the Company’s internal risk rating system as its primary credit quality indicator. Impairment is measured based on historical loss experience taking into consideration environmental factors. The significant majority of these loans have been subject to new credit decisions due to the improvement in the expected future cash flows, the financial condition of the borrower, and other factors considered during re-underwriting. The TDR activity during the quarter did not have a material impact on the Company’s allowance for loan losses, financial condition, or results of operations.

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Nonperforming Assets

At September 30, 2014, nonperforming assets totaled $58.0 million, an increase of $8.9 million, or 18.1%, from December 31, 2013 and an increase of $2.4 million, or 4.3%, from a year ago. In addition, NPAs as a percentage of total outstanding loans decreased 50 basis points to 1.12% in the current quarter from 1.62% as of December 31, 2013 and declined 73 basis points from 1.85% a year earlier.

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

	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Nonaccrual loans, excluding PCI loans	$	20,279		$	23,099		$	14,722		$	15,035		$	19,941
Foreclosed properties		28,783			33,739			35,487			34,116			35,576
Real estate investment		8,971			4,755			-			-			133
Total nonperforming assets		58,033			61,593			50,209			49,151			55,650
Loans past due 90 days and accruing interest		16,118			6,870			7,205			6,746			7,326
Total nonperforming assets and loans past due 90 days and accruing interest	$	74,151		$	68,463		$	57,414		$	55,897		$	62,976
Performing Restructurings	$	26,243		$	30,561		$	37,195		$	34,520		$	39,287
Balances
Allowance for loan losses	$	32,109		$	31,379		$	30,907		$	30,135		$	33,877
Average loans, net of unearned income		5,196,116			5,246,710			5,279,924			3,004,186			2,997,083
Loans, net of unearned income		5,171,003			5,233,069			5,274,198			3,039,368			3,002,246
Ratios
NPAs to total loans		1.12	%		1.18	%		0.95	%		1.62	%		1.85	%
NPAs & loans 90 days past due to total loans		1.43	%		1.31	%		1.09	%		1.84	%		2.10	%
NPAs to total loans & OREO		1.11	%		1.17	%		0.95	%		1.60	%		1.83	%
NPAs & loans 90 days past due to total loans & OREO		1.42	%		1.30	%		1.08	%		1.82	%		2.07	%
ALL to nonaccrual loans		158.34	%		135.85	%		209.94	%		200.43	%		169.89	%
ALL to nonaccrual loans & loans 90 days past due		88.22	%		104.70	%		140.95	%		138.35	%		124.24	%

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Nonperforming assets at September 30, 2014 included $20.3 million in nonaccrual loans (excluding PCI loans), a net increase of $5.2 million, or 34.9%, from December 31, 2013 and a net increase of $338,000, or 1.7%, from September 30, 2013. The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Beginning Balance	$	23,099		$	14,722		$	15,035		$	19,941		$	27,022
Net customer payments		(1,654	)		(1,088	)		(959	)		(1,908	)		(5,574	)
Additions		1,099			11,087			1,362			3,077			3,020
Charge-offs		(604	)		(137	)		(152	)		(4,336	)		(1,669	)
Loans returning to accruing status		(723	)		(523	)		-			(1,018	)		(1,068	)
Transfers to OREO		(938	)		(962	)		(564	)		(721	)		(1,790	)
Ending Balance	$	20,279		$	23,099		$	14,722		$	15,035		$	19,941

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

	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Raw Land and Lots	$	5,074		$	5,921		$	3,091		$	2,560		$	3,087
Commercial Construction		672			1,065			1,152			1,596			1,167
Commercial Real Estate		1,821			851			1,548			2,212			3,962
Single Family Investment Real Estate		4,202			5,737			1,794			1,689			2,076
Commercial and Industrial		3,005			3,794			3,655			3,848			6,675
Other Commercial		62			121			122			126			472
Consumer		5,443			5,610			3,360			3,004			2,502
Total	$	20,279		$	23,099		$	14,722		$	15,035		$	19,941
Coverage Ratio		158.34	%		135.85	%		209.94	%		200.43	%		169.89	%

Nonperforming assets at September 30, 2014 also included $37.8 million in OREO, an increase of $3.6 million, or 10.7%, from December 31, 2013 and an increase of $2.0 million, or 5.7%, from the prior year. The following table shows the activity in OREO for the quarters ended (dollars in thousands):

	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Beginning Balance	$	38,494		$	35,487		$	34,116		$	35,709		$	35,153
Additions of foreclosed properties		2,553			1,619			5,404			1,326			2,841
Additions of former bank premises		4,814			6,052			-			-			-
Capitalized Improvements		203			59			-			101			266
Valuation Adjustments		(6,192	)		(817	)		(256	)		(300	)		(491	)
Proceeds from sales		(2,216	)		(3,913	)		(3,800	)		(2,483	)		(1,773	)
Gains (losses) from sales		98			7			23			(237	)		(287	)
Ending Balance	$	37,754		$	38,494		$	35,487		$	34,116		$	35,709

Of the $20.4 million in additions to OREO in 2014, $4.3 million was acquired foreclosed property from StellarOne and $10.9 million related to bank premises no longer used in operations related to the StellarOne acquisition. OREO is evaluated for impairment at least quarterly by the Company’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense. During the third quarter of 2014, the Company reevaluated its OREO sales strategies in light of limited progress in selling properties in inactive rural markets that have continued to struggle coming out of the economic downturn and for which transaction volume for comparable sales has been slow or nonexistent. With the shift in strategy to more aggressively market this OREO, the Company obtained appraisals that reflect the newly determined highest and best use of the underlying assets. As a result, the Company recorded valuation adjustments of $6.2 million during the third quarter of 2014. These valuation adjustments will allow the Company to be more aggressive in disposing of long-held OREO properties and reducing the ongoing expenses associated with managing these properties.

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

	September 30,		June 30,		March 31,		December 31,		September 30,
	2014		2014		2014		2013		2013
Land	$	9,054	$	11,378	$	11,387	$	10,310	$	10,310
Land Development		7,585		10,509		11,314		10,904		10,901
Residential Real Estate		6,696		6,019		7,408		7,379		7,995
Commercial Real Estate		5,448		5,833		5,378		5,523		6,370
Former Bank Premises (1)		8,971		4,755		-		-		133
Total	$	37,754	$	38,494	$	35,487	$	34,116	$	35,709

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

Past Due Loans

At September 30, 2014, total accruing past due loans, excluding PCI loans, were $58.4 million, or 1.13% of total loans, compared to $26.5 million, or 0.87%, at December 31, 2013 and $30.5 million, or 1.02%, a year ago. At September 30, 2014, loans past due 90 days or more and accruing interest, excluding PCI loans, totaled $16.1 million, or 0.31% of total loans, compared to $6.7 million, or 0.22%, at December 31, 2013 and $7.3 million, or 0.24%, a year ago.

Charge-offs and delinquencies

For the quarter ended September 30, 2014, net charge-offs were $1.1 million, or 0.08% on an annualized basis, compared to net charge-offs of $2.3 million, or 0.30%, for the same quarter last year. For the nine months ended September 30, 2014, net charge-offs were $1.3 million, or 0.03% on an annualized basis, compared to $5.9 million, or 0.26%, for the same period in the prior year. The higher level of charge-offs in the first nine months of 2013 mainly related to loans that were previously considered impaired and specifically reserved for in prior periods.

Provision

The provision for loan losses for the quarter ended September 30, 2014 was $1.8 million, consistent with the same quarter in the prior year. The provision for loan losses for the nine months ended September 30, 2014 was $3.3 million compared to $4.9 million during the same period in the prior year. The decrease in the year-to-date provision for loan losses in the current year compared to the prior year is driven by improving asset quality and the impact of lower historical loss factors.

Allowance for Loan Losses

The allowance for loan losses increased $2.0 million from December 31, 2013 to $32.1 million at September 30, 2014. The ALL as a percentage of the total loan portfolio, adjusted for acquisition accounting (non-GAAP), was 1.12% at September 30, 2014, an increase from 1.10% at December 31, 2013 and a decrease from 1.25% at September 30, 2013. The allowance for loan losses as a percentage of the total loan portfolio, unadjusted for acquisition accounting, was 0.62% at September 30, 2014, 0.99% at December 31, 2013, and 1.13% at September 30, 2013. The decrease in the unadjusted allowance ratio was primarily attributable to improving credit quality metrics (as a percentage of total loans) and the acquisition of StellarOne. In acquisition accounting, there is no carryover of previously established allowance for loan losses.

The nonaccrual loan coverage ratio remains strong at 158.3% at September 30, 2014, compared to 200.4% at December 31, 2013, and 169.9% at September 30, 2013. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.

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

	September 30,			June 30,			March 31,			December 31,			September 30,
	2014			2014			2014			2013			2013
Balance, beginning of period	$	31,379		$	30,907		$	30,135		$	33,877		$	34,333
Loans charged-off:
Commercial		132			476			70			2,619			147
Real estate		1,138			695			438			2,342			2,104
Consumer		495			369			379			876			342
Total loans charged-off		1,765			1,540			887			5,837			2,593
Recoveries:
Commercial		108			84			65			161			46
Real estate		411			193			1,392			524			80
Consumer		176			235			202			204			211
Total recoveries		695			512			1,659			889			337
Net charge-offs		1,070			1,028			(772	)		4,948			2,256
Provision for loan losses		1,800			1,500			-			1,206			1,800
Balance, end of period	$	32,109		$	31,379		$	30,907		$	30,135		$	33,877
Allowance for loan losses to loans		0.62	%		0.60	%		0.59	%		0.99	%		1.13	%
ALL to loans, adjusted for acquisition accounting (Non-GAAP)		1.12	%		1.11	%		1.09	%		1.10	%		1.25	%
Net charge-offs to total loans		0.08	%		0.08	%		(0.06	)%		0.65	%		0.30	%
Provision to total loans		0.14	%		0.11	%		0.00	%		0.16	%		0.24	%

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

	September 30,					June 30,					March 31,					December 31,					September 30,
	2014					2014					2014					2013					2013
	$		%(1)			$		%(1)			$		%(1)			$		%(1)			$		%(1)
Commercial	$	2,250		7.0	%	$	2,239		7.1	%	$	2,162		7.0	%	$	1,932		6.4	%	$	2,098		6.2	%
Real estate		27,461		85.5	%		26,876		85.7	%		26,519		85.8	%		25,242		83.8	%		28,334		83.6	%
Consumer		2,398		7.5	%		2,264		7.2	%		2,226		7.2	%		2,961		9.8	%		3,445		10.2	%
Total	$	32,109		100.0	%	$	31,379		100.0	%	$	30,907		100.0	%	$	30,135		100.0	%	$	33,877		100.0	%

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

Deposits

As of September 30, 2014, total deposits were $5.6 billion, an increase of $2.4 billion, or 74.1%, from December 31, 2013 and an increase of $2.4 billion, or 74.7%, from September 30, 2013, a result of the addition of the deposit accounts acquired through the StellarOne acquisition. Total interest-bearing deposits consist of NOW, money market, savings, and time deposit account balances. Total time deposit balances of $1.3 billion accounted for 30.3% of total interest-bearing deposits at September 30, 2014. The Company continues to experience a shift from time deposits into lower cost transaction (demand deposits, NOW, money market, and savings) accounts. This shift is driven by the Company’s focus on acquiring low cost deposits and customer preference for liquidity in a historically low interest rate environment.

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The community bank segment may also borrow additional funds by purchasing certificates of deposit through a nationally recognized network of financial institutions. The Company utilizes this funding source when rates are more favorable than other funding sources. As of both September 30, 2014 and 2013, there were none purchased and included in certificates of deposit on the Company’s Consolidated Balance Sheet. Maturities of time deposits as of September 30, 2014 are as follows (dollars in thousands):

	Within 3 Months		3 - 12 Months		Over 12 Months		Total		Percent Of Total Deposits
Maturities of time deposits of $100,000 and over	$	80,716	$	204,321	$	280,897	$	565,934		10.04	%
Maturities of other time deposits		114,985		303,324		356,328		774,637		13.75	%
Total time deposits	$	195,701	$	507,645	$	637,225	$	1,340,571		23.79	%

Capital Resources

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

The FRB and the FDIC have adopted capital guidelines to supplement the existing definitions of capital for regulatory purposes and to establish minimum capital standards. Specifically, the guidelines categorize assets and off-balance sheet items into four risk-weighted categories. The minimum ratio of qualifying total assets is 8.0%, of which 4.0% must be Tier 1 capital, principally consisting of common equity, retained earnings, and a limited amount of perpetual preferred stock, less certain intangible items. The table below shows the Company exceeded the definition of “well capitalized” for regulatory purposes.

Prior to the StellarOne acquisition and in connection with two bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. In connection with the StellarOne acquisition, the Company acquired $32.0 million in trust preferred securities issued by StellarOne’s finance subsidiaries. These trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

The following table summarizes the Company’s regulatory capital and related ratios for the periods presented (dollars in thousands):

	September 30,			December 31,			September 30,
	2014			2013			2013
Tier 1 capital	$	729,834		$	428,489		$	421,357
Tier 2 capital		35,457			36,870			40,732
Total risk-based capital		765,291			465,359			462,089
Risk-weighted assets		5,583,644			3,284,430			3,209,564
Capital ratios:
Tier 1 risk-based capital ratio		13.07	%		13.05	%		13.13	%
Total risk-based capital ratio		13.71	%		14.17	%		14.40	%
Leverage ratio (Tier 1 capital to average adjusted assets)		10.55	%		10.70	%		10.62	%
Common equity to assets		13.59	%		10.49	%		10.72	%
Tangible common equity to tangible assets		9.42	%		8.94	%		9.09	%

In July 2013, the FRB issued revised final rules that make technical changes to its market risk capital rules to align it with the Basel III regulatory capital framework and meet certain requirements of the Dodd-Frank Act. The final new capital rules require the Company to comply with the following new minimum capital ratios, effective January 1, 2015: (1) a new common equity Tier 1 capital ratio of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6% of risk-weighted assets (increased from the current requirement of 4%); (3) a total capital ratio of 8% of risk-weighted assets (unchanged from current requirement); and, (4) a leverage ratio of 4% of total assets.

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Had the new minimum capital ratios described above been effective as of September 30, 2014, based on management’s interpretation and understanding of the new rules, the Company would have remained “well capitalized” as of such date.

NON-GAAP MEASURES

In reporting the results of September 30, 2014, the Company has provided supplemental performance measures on an operating or tangible basis. Operating measures exclude acquisition costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude non-operating adjustments resulting from acquisition activity and allow investors to see the combined economic results of the organization. Tangible common equity is used in the calculation of certain capital and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

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

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Alternative Performance Measures (non-GAAP)
Operating Earnings
Net Income (GAAP)	$	14,924		$	7,946		$	37,519		$	26,392
Plus: Merger and conversion related expense, after tax		1,102			471			13,161			1,391
Net operating earnings (loss) (non-GAAP)	$	16,026		$	8,417		$	50,680		$	27,783
Operating earnings per share - Basic	$	0.35		$	0.34		$	1.09		$	1.11
Operating earnings per share - Diluted		0.35			0.34			1.09			1.11
Operating ROA		0.88	%		0.83	%		0.93	%		0.92	%
Operating ROE		6.49	%		7.74	%		6.88	%		8.55	%
Operating ROTCE		9.82	%		9.31	%		10.41	%		10.29	%
Community Bank Segment Operating Earnings
Net Income (GAAP)	$	15,552		$	9,181		$	40,128		$	27,153
Plus: Merger and conversion related expense, after tax		1,102			471			13,161			1,391
Net operating earnings (loss) (non-GAAP)	$	16,654		$	9,652		$	53,289		$	28,544
Operating earnings per share - Basic	$	0.36		$	0.39		$	1.15		$	1.14
Operating earnings per share - Diluted		0.36			0.39			1.15			1.14
Operating ROA		0.91	%		0.95	%		0.98	%		0.95	%
Operating ROE		6.77	%		9.08	%		7.29	%		8.98	%
Operating ROTCE		10.26	%		10.97	%		11.10	%		10.86	%
Operating Efficiency Ratio FTE
Net Interest Income (GAAP)	$	64,479		$	37,858		$	191,953		$	113,014
FTE adjustment		2,058			1,316			6,122			3,868
Net Interest Income (FTE)	$	66,537		$	39,174		$	198,075		$	116,882
Noninterest Income (GAAP)		16,742			9,216			47,645			30,349
Noninterest Expense (GAAP)	$	59,921		$	34,132		$	187,177		$	101,915
Merger and conversion related expense		1,695			473			19,524			1,393
Noninterest Expense (Non-GAAP)	$	58,226		$	33,659		$	167,653		$	100,522
Operating Efficiency Ratio FTE (non-GAAP)		69.92	%		69.56	%		68.23	%		68.28	%
Community Bank Segment Operating Efficiency Ratio FTE
Net Interest Income (GAAP)	$	64,162		$	37,465		$	191,090		$	111,612
FTE adjustment		2,058			1,315			6,122			3,868
Net Interest Income (FTE)	$	66,220		$	38,780		$	197,212		$	115,480
Noninterest Income (GAAP)		14,308			7,322			40,224			20,266
Noninterest Expense (GAAP)	$	56,188		$	29,904		$	174,780		$	89,242
Merger and conversion related expense		1,695			473			19,524			1,393
Noninterest Expense (Non-GAAP)	$	54,493		$	29,431		$	155,256		$	87,849
Operating Efficiency Ratio FTE (non-GAAP)		67.67	%		63.84	%		65.39	%		64.72	%
Tangible Common Equity
Ending equity	$	977,673		$	433,671		$	977,673		$	433,671
Less: Ending goodwill		296,876			59,400			296,876			59,400
Less: Ending core deposit intangibles		34,089			12,900			34,089			12,900
Ending tangible common equity	$	646,708		$	361,371		$	646,708		$	361,371
Average equity	$	979,659		$	431,312		$	985,404		$	434,620
Less: Average trademark intangible		-			-			-			2
Less: Average goodwill		296,876			59,400			296,876			59,400
Less: Average core deposit intangibles		35,310			13,343			37,888			14,270
Average tangible common equity	$	647,473		$	358,569		$	650,640		$	360,948

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

	September 30,			December 31,			September 30,
	2014			2013			2013
Allowance for loan losses	$	32,109		$	30,135		$	33,877
Remaining credit mark on purchased performing loans		25,064			3,341			3,780
Adjusted allowance for loan losses		57,173			33,476			37,657
Loans, net of unearned income	$	5,171,003		$	3,039,368		$	3,002,246
Remaining credit mark on purchased performing loans		25,064			3,341			3,780
Less: PCI loans, net of credit mark		113,743			3,622			3,951
Adjusted loans, net of unearned income	$	5,082,324		$	3,039,087		$	3,002,075
Allowance for loan losses ratio		0.62	%		0.99	%		1.13	%
Allowance for loan losses ratio, adjusted for acquisition accounting		1.12	%		1.10	%		1.25	%

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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EARNINGS SIMULATION ANALYSIS

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

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

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

The following table represents the interest rate sensitivity on net interest income for the Company across the rate paths modeled for balances ended September 30, 2014 (dollars in thousands):

	Change In Net Interest Income
	%			$
Change in Yield Curve:
+300 basis points		6.06			15,746
+200 basis points		4.19			10,898
+100 basis points		1.75			4,540
Most likely rate scenario		-			-
-100 basis points		(1.89	)		(4,914	)
-200 basis points		(4.59	)		(11,943	)
-300 basis points		(5.16	)		(13,414	)

ECONOMIC VALUE SIMULATION

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

- 72 -

The following chart reflects the estimated change in net economic value over different rate environments using economic value simulation for the balances at the period ended September 30, 2014 (dollars in thousands):

	Change In Economic Value of Equity
	%			$
Change in Yield Curve:
+300 basis points		(1.66	)		(21,897	)
+200 basis points		(0.29	)		(3,768	)
+100 basis points		0.35			4,617
Most likely rate scenario		-			-
-100 basis points		(2.93	)		(38,731	)
-200 basis points		(8.07	)		(106,701	)
-300 basis points		(9.79	)		(129,462	)

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

ITEM 4 – CONTROLS AND PROCEDURES

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

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective at the reasonable assurance level. There was no change in the internal control over financial reporting that occurred during the quarter ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

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

Litigation Relating to the StellarOne Acquisition

In a press release issued on June 10, 2013, the Company announced the signing of a definitive merger agreement for the acquisition of StellarOne. The Company closed the acquisition of StellarOne on January 1, 2014. On June 14, 2013, in response to the initial announcement of the definitive merger agreement, Jaclyn Crescente, individually and on behalf of all other StellarOne shareholders, filed a class action complaint against StellarOne, its current directors, StellarOne Bank, and the Company, in the U.S. District Court for the Western District of Virginia, Charlottesville Division (the “District Court”) (Case No. 3:13-cv-00021-NKM). The complaint alleged that the StellarOne directors breached their fiduciary duties by approving the merger with the Company and that the Company aided and abetted in such breaches of duty. The complaint sought, among other things, money damages. StellarOne and the Company believed that the claims were without merit; however, in order to eliminate the expense and uncertainties of further litigation, all the defendants entered into a memorandum of understanding with the plaintiffs in order to settle the litigation prior to the merger. Under the terms of the memorandum of understanding, the plaintiffs agreed to settle the lawsuit and release the defendants from all claims, subject to approval by the District Court. On May 19, 2014, the District Court approved the memorandum of understanding and the class action settlement in the case.

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ITEM 1A – RISK FACTORS

There have been no other material changes with respect to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

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

(a) Sales of Unregistered Securities

Beginning in the third quarter of 2014, non-employee members of the Company’s Board of Directors may elect to receive, on a quarterly basis, either cash or Company common stock in lieu of an annual stock retainer for services as a director. During the third quarter of 2014, certain shares were issued from authorized but unissued shares of the Company’s common stock. Such shares are considered exempt from registration as they were issued pursuant to Section 4(a)(2) of the Exchange Act. The shares were also issued in a transaction that meets the requirements of Rule 16b-3(d) of the Securities Act of 1934. On July 31, 2014, the Company issued 10,150 shares based on the July 30, 2014 closing sale price of $24.22 and on September 3, 2014, the Company issued 4,224 shares based on the September 2, 2014 closing sale price of $23.70. During the three and nine months ended September 30, 2014, the aggregate amount of consideration received by the Company for the stock issuances was $345,942. The Company intends to use the proceeds from the sale of the securities for general corporate purposes.

(b) Use of Proceeds – Not Applicable

(c) Issuer Purchases of Securities

The following information describes the Company’s common stock repurchases during the nine months ended September 30, 2014:

Period	Total number of shares purchased (1)		Average price  paid per share  ($)		Total number of shares purchased as part of  publicly announced plan		Approximate  value of shares  that may yet be purchased under  the plan ($)
February 26 - February 28, 2014		206,886		25.01		206,886		59,826,000
March 1 - March 31, 2014		303,629		25.62		303,629		52,047,000
April 1 - April 30, 2014		390,818		25.14		390,818		42,222,000
May 1 - May 30, 2014		251,642		24.93		251,642		35,948,000
June 1 - June 30, 2014		189,100		25.47		189,100		31,131,000
July 1 - July 31, 2014		242,350		25.06		242,350		25,058,000
August 1 - August 31, 2014		62,600		23.95		62,600		23,559,000
September 1 - September 30, 2014		84,000		23.65		84,000		21,572,000
Total		1,731,025		25.09		1,731,025		21,572,000

⁽¹⁾On January 31, 2014, the Company’s Board of Directors authorized a share repurchase program to purchase up to $65.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program is authorized through December 31, 2015. The Company intends to continue to repurchase shares under this program.

- 75 -

ITEM 6 – EXHIBITS

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

Exhibit No.	Description
3.01	Bylaws of  Union Bankshares Corporation, as amended as of June 26, 2014 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on July 1, 2014).
31.01	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.00	Interactive data files formatted in eXtensible Business Reporting Language for the quarter ended September 30, 2014 pursuant to Rule 405 of Regulation S-T (1): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements.
	(1)    These files are furnished and deemed not filed.

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SIGNATURES

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

	Union Bankshares Corporation
	(Registrant)
Date: November 5, 2014	By:	/s/ G. William Beale
	G. William Beale,
	President and Chief Executive Officer
	(principal executive officer)
Date: November 5, 2014	By:	/s/ Robert M. Gorman
	Robert M. Gorman,
	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

- 77 -

EX-32.01

Exhibit 31.01

CERTIFICATIONS

I, G. William Beale, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 5, 2014
	/s/ G. William Beale
	G. William Beale,
	President and Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATIONS

I, Robert M. Gorman, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 5, 2014
	/s/ Robert M. Gorman
	Robert M. Gorman,
	Executive Vice President and Chief Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Union Bankshares Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge and belief: 

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ G. William Beale

G. William Beale, President and Chief Executive Officer

/s/ Robert M. Gorman

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

November 5, 2014

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

XML

ACQUISITIONS (Business Acquisition, Pro Forma Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
ACQUISITIONS [Abstract]
Total revenues (net interest income plus noninterest income)	$ 82,180	$ 246,972
Net income	$ 17,827	$ 54,834

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Excluding Purchased Impaired Loans) (Details) (Excluding Purchased Impaired [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	$ 3,555,761	$ 2,160,973
Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	299,121	213,675
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	828,905	500,764
Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,384,262	755,905
Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	201,753	185,072
Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	388,635	237,365
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	375,971	215,702
Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	77,114	52,490
1-3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	729,113	533,049
1-3 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	20,850	24,399
1-3 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	174,759	149,632
1-3 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	294,645	224,702
1-3 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	12,356	8,648
1-3 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	62,225	38,327
1-3 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	131,104	68,748
1-3 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	33,174	18,593
4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	2,548,189	1,340,160
4 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	250,160	148,251
4 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	609,379	324,394
4 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,004,064	453,279
4 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	124,968	98,927
4 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	299,539	168,564
4 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	225,795	123,585
4 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	34,284	23,160
5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	108,145	95,557
5 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	13,214	20,370
5 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	16,544	10,017
5 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	40,097	21,953
5 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	14,568	14,132
5 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	9,874	12,302
5 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	6,811	8,254
5 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	7,037	8,529
6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	60,488	109,392
6 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	11,597	13,772
6 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	18,255	10,926
6 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	13,246	46,084
6 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	3,797	16,439
6 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	7,175	11,522
6 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	5,194	8,752
6 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,224	1,897
7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	109,826	80,274
7 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	3,300	6,883
7 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	9,968	5,795
7 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	32,210	9,887
7 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	46,064	46,926
7 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	9,822	6,650
7 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	7,067	3,822
7 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,395	311
8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating		2,541
8 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating		2,541
8 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Aging of the Loan Portfolio by Class) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	$ 33,010	$ 16,431
60-89 Days Past Due	9,280	3,347
Greater Than 90 Days and still Accruing	16,118	6,746
Purchased Impaired (net of credit mark)	119,743	3,622	3,951
Nonaccrual	20,279	15,035
Current	4,972,573	2,994,187
Total loans	5,171,003	3,039,368	3,002,246
Commercial Construction [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due
60-89 Days Past Due
Greater Than 90 Days and still Accruing
Purchased Impaired (net of credit mark)	4,455
Nonaccrual	672	1,596
Current	298,449	212,079
Total loans	303,576	213,675
Commercial Real Estate - Owner Occupied [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	4,401	514
60-89 Days Past Due	1,153
Greater Than 90 Days and still Accruing	784	258
Purchased Impaired (net of credit mark)	27,710
Nonaccrual	676	2,037
Current	821,891	497,955
Total loans	856,615	500,764
Commercial Real Estate - Non-Owner Occupied [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	903	185
60-89 Days Past Due	168	42
Greater Than 90 Days and still Accruing	5,347	1,996
Purchased Impaired (net of credit mark)	38,831
Nonaccrual	1,145	175
Current	1,376,699	753,507
Total loans	1,423,093	755,905
Raw Land and Lots [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	356	922
60-89 Days Past Due		545
Greater Than 90 Days and still Accruing	121
Purchased Impaired (net of credit mark)	8,804	2,457
Nonaccrual	5,074	2,560
Current	196,202	181,045
Total loans	210,557	187,529
Single Family Investment Real Estate [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	1,208	1,783
60-89 Days Past Due	976	277
Greater Than 90 Days and still Accruing	100	563
Purchased Impaired (net of credit mark)	19,337	275
Nonaccrual	4,202	1,689
Current	382,149	233,053
Total loans	407,972	237,640
Commercial and Industrial [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	1,346	348
60-89 Days Past Due	257	152
Greater Than 90 Days and still Accruing	473	220
Purchased Impaired (net of credit mark)	4,642
Nonaccrual	3,005	3,848
Current	370,890	211,134
Total loans	380,613	215,702
Other Commercial [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	366	87
60-89 Days Past Due		1
Greater Than 90 Days and still Accruing	2,271	50
Purchased Impaired (net of credit mark)	2,242
Nonaccrual	62	126
Current	74,415	52,226
Total loans	79,356	52,490
Mortgage [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	16,436	6,779
60-89 Days Past Due	4,260	1,399
Greater Than 90 Days and still Accruing	3,903	1,141
Purchased Impaired (net of credit mark)	9,367
Nonaccrual	4,346	2,446
Current	450,764	225,649
Total loans	489,076	237,414
Consumer Construction [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	592
60-89 Days Past Due	198
Greater Than 90 Days and still Accruing	821	208
Purchased Impaired (net of credit mark)	534
Nonaccrual
Current	74,846	48,776
Total loans	76,991	48,984
Indirect Auto [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	1,333	2,237
60-89 Days Past Due	280	252
Greater Than 90 Days and still Accruing	231	349
Purchased Impaired (net of credit mark)		7
Nonaccrual
Current	192,789	171,998
Total loans	194,633	174,843
Indirect Marine [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	56	459
60-89 Days Past Due
Greater Than 90 Days and still Accruing
Purchased Impaired (net of credit mark)
Nonaccrual	226	288
Current	40,065	37,886
Total loans	40,347	38,633
HELOCs [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	4,281	2,124
60-89 Days Past Due	1,034	422
Greater Than 90 Days and still Accruing	648	1,190
Purchased Impaired (net of credit mark)	2,121	787
Nonaccrual	510	43
Current	487,551	277,013
Total loans	496,145	281,579
Credit Card [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	198	105
60-89 Days Past Due	116	133
Greater Than 90 Days and still Accruing	214	281
Purchased Impaired (net of credit mark)
Nonaccrual
Current	23,208	22,692
Total loans	23,736	23,211
Other Consumer [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	1,534	888
60-89 Days Past Due	838	124
Greater Than 90 Days and still Accruing	1,205	490
Purchased Impaired (net of credit mark)	1,700	96
Nonaccrual	361	227
Current	182,655	69,174
Total loans	$ 188,293	$ 70,999

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Change in Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Change in accumulated other comprehensive income
Unrealized Gains (losses) on Securities, Beginning Balance	$ 14,202	$ 2,719	$ 1,192	$ 14,573
Change in Fair Value of Cash Flow Hedge, Beginning Balance	(3,321)	(3,354)	(3,382)	(4,489)
Total, Beginning Balance	10,881	(635)	(2,190)	10,084
Other comprehensive income (loss) before reclass, Unrealized Gains (losses) on Securities	1,798	(393)	14,843	(12,220)
Other comprehensive income (loss) before reclass, Change in Fair Value of Cash Flow Hedge	(228)	293	(431)	1,049
Other comprehensive income (loss) before reclass, Total	1,570	(100)	14,412	(11,171)
Amounts reclassified from accumulated other comprehensive income, Unrealized Gains (losses) on Securities	(647)	(3)	(682)	(30)
Amounts reclassified from accumulated other comprehensive income, Change in Fair Value of Cash Flow Hedge	164	161	428	540
Amounts reclassified from accumulated other comprehensive income	(483)	158	(254)	510
Net current period other comprehensive income (loss), Unrealized Gains (losses) on Securities	1,151	(396)	14,161	(12,250)
Net current period other comprehensive income (loss), Change in Fair Value of Cash Flow Hedge	(64)	454	(3)	1,589
Other comprehensive income (loss)	1,087	58	14,158	(10,661)
Unrealized Gains (losses) on Securities, Ending Balance	15,353	2,323	15,353	2,323
Change in Fair Value of Cash Flow Hedge, Ending Balance	(3,385)	(2,900)	(3,385)	(2,900)
Total, Ending Balance	$ 11,968	$ (577)	$ 11,968	$ (577)

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Including Purchased Impaired Loans) (Details) (Purchased Impaired [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	$ 106,021	$ 2,732
Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	4,455
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	27,710
Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	38,831
Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	8,804	2,457
Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	19,337	275
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	4,642
Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	2,242
4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	6,833	275
4 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
4 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	530
4 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,654
4 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,414
4 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	2,757	275
4 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	478
4 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	8,571	653
5 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
5 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	5,938
5 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	295
5 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,465	653
5 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	873
5 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
5 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	37,526
6 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	3,375
6 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	7,375
6 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	16,148
6 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	2,464
6 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	6,689
6 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,193
6 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	282
7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	52,580	1,804
7 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	609
7 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	13,867
7 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	20,734
7 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	3,461	1,804
7 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	9,018
7 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	2,931
7 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	1,960
8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	511
8 [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	471
8 [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Raw Land and Lots [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating
8 [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating	40
8 [Member] | Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivables related risk rating

XML

STOCK-BASED COMPENSATION (Summary of Stock Option Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Summary of stock option activity
Number of Stock Options, Outstanding beginning balance	402,946
Weighted Average Exercise Price, Outstanding beginning balance	$ 16.48
Options converted upon StellarOne acquisition	124,217
Options converted upon StellarOne acquisition, Weighted Average Exercise Price	$ 20.88
Number of Stock Options, Exercised	(67,057)
Weighted Average Exercise Price, Exercised	$ 16.89
Number of Stock Options, Forfeited	(60,579)
Weighted Average Exercise Price, Forfeited	$ 22.91
Number of Stock Options, Outstanding ending balance	399,527
Weighted Average Exercise Price, Outstanding ending balance	$ 16.81
Number of Stock Options, Exercisable	273,971
Weighted Average Exercise Price, Options exercisable	$ 18.16

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013 loan	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 5,171,003,000	$ 3,002,246,000	$ 3,039,368,000
Loans and interest accruing 90 days past due	16,118,000		6,746,000
Average investment in impaired loans	157,709,000		128,479,000
Interest income recorded on impaired loans	4,590,000		4,321,000
Nonaccrual loans	20,279,000		15,035,000
Period for restructured loan to be considered default	90 days
Recorded Investment	136,009,000		112,621,000
Loans considered to be trouble debt restructurings	28,971,000		41,824,000
Nonaccrual loans excluded from impaired loan disclosure	0		0
Restructured loans that defaulted in the current period	24,000	43,000
Number of restructured loans that defaulted in current period	1	1
Acquired Loan Portfolio [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,900,000,000		377,800,000
Remaining discount on acquired loans	$ 25,100,000		$ 3,300,000

XML

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2014

STOCK-BASED COMPENSATION [Abstract]

Summary of Shares Available in Each Plan

The following table summarizes the shares available in the 2011 Plan as of September 30, 2014:  

	2011 Plan
Beginning Authorization	1,000,000
Granted	(516,727)
Expired, forfeited, or cancelled	50,260
Remaining available for grant	533,533

Summary of Stock Option Activity

The following table summarizes the stock option activity for the nine months ended September 30, 2014:

	Number of Stock Options	Weighted Average Exercise Price
Options outstanding, December 31, 2013	402,946	$	16.48
Options converted upon StellarOne acquisition	124,217		20.88
Exercised	(67,057)		16.89
Expired	(60,579)		22.91
Options outstanding, September 30, 2014	399,527		16.81
Options exercisable, September 30, 2014	273,971		18.16

Summary of Information Concerning Stock Options

The following table summarizes information concerning stock options issued to the Company’s employees that are vested or are expected to vest and stock options exercisable as of September 30, 2014:

	Stock Options Vested or Expected to Vest		Exercisable
Stock options (number of shares)		398,809		273,971
Weighted average remaining contractual life in years		5.22		4.48
Weighted average exercise price on shares above water	$	14.38	$	14.68
Aggregate intrinsic value	$	2,815,845	$	1,670,373

Summary of Nonvested Stock Activity

The following table summarizes the restricted stock activity for the nine months ended September 30, 2014:

	Number of Shares of Restricted Stock	Weighted Average Grant-Date Fair Value
Balance, December 31, 2013	260,763	$	16.47
Granted	134,431		24.29
Net settle for taxes	(63,916)		24.83
Vested	(14,707)		14.64
Forfeited	(25,377)		20.94
Balance, September 30, 2014	291,194		20.04

Estimated Unamortized Compensation Expense Recognized in Future

The estimated unamortized compensation expense, net of estimated forfeitures, related to nonvested stock and stock options issued and outstanding as of September 30, 2014 that will be recognized in future periods is as follows (dollars in thousands):

	Stock Options		Restricted Stock		Total
For the remaining three months of 2014	$	79	$	480	$	559
For year ending December 31, 2015		233		1,469		1,702
For year ending December 31, 2016		130		1,155		1,285
For year ending December 31, 2017		15		443		458
For year ending December 31, 2018		-		56		56
Total	$	457	$	3,603	$	4,060

XML

STOCK-BASED COMPENSATION (Summary of Information Concerning Stock Options) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Summary of information concerning stock options
Stock Options Vested or Expected to Vest, Stock options	398,809
Stock options, Exercisable	273,971
Stock Options Vested or Expected to Vest, Weighted average remaining contractual life in years	5 years 2 months 19 days
Weighted average remaining contractual life in years, Exercisable	4 years 5 months 23 days
Stock Options Vested or Expected to Vest, Weighted average exercise price on shares above water	$ 14.38
Weighted average exercise price on shares above water, Exercisable	$ 14.68
Stock Options Vested or Expected to Vest, Aggregate intrinsic value	$ 2,815,845
Aggregate intrinsic value, Exercisable	$ 1,670,373

XML

FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale	$ 30,857	$ 53,185
Other real estate owned	37,754	34,116
Fair Value, Measurements, Nonrecurring [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale	30,857	53,185
Impaired loans	26,910	7,985
Other real estate owned	37,754	34,116
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale
Impaired loans
Other real estate owned
Significant Other Observable Inputs Level 2 [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale	30,857	53,185
Significant Other Observable Inputs Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale	30,857	53,185
Impaired loans
Other real estate owned
Significant Unobservable Inputs Level 3 [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale
Significant Unobservable Inputs Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Schedule of financial assets measured at fair value on nonrecurring basis
Loans held for sale
Impaired loans	26,910	7,985
Other real estate owned	$ 37,754	$ 34,116

XML

INTANGIBLE ASSETS (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Core Deposits [Member]	Sep. 30, 2013 Core Deposits [Member]	Sep. 30, 2014 Core Deposits [Member]	Sep. 30, 2013 Core Deposits [Member]	Dec. 31, 2013 Core Deposits [Member]	Sep. 30, 2014 Core Deposits [Member] Minimum [Member]	Sep. 30, 2014 Core Deposits [Member] Maximum [Member]	Jan. 01, 2014 StellarOne Bank [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period											4 years	14 years
Intangible assets, amortization expense	$ 2,391	$ 921	$ 7,462	$ 2,912		$ 2,400	$ 921	$ 7,500	$ 2,900	$ 3,800
Impairment charges			0
Core deposit intangible													29,570
Goodwill	$ 296,876		$ 296,876		$ 59,400								$ 237,476	[1]

[1] No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the community bank segment.

XML

STOCK-BASED COMPENSATION (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Defined Benefit Plan Disclosure [Line Items]
Exchange ratio			0.9739
Recognized stock-based compensation expense	$ 308,000	$ 297,000	$ 862,000	$ 622,000
Recognized stock-based compensation expense, net of tax	$ 227,000	$ 236,000	$ 641,000	$ 505,000
Stock-based compensation expense per common share	$ 0.01	$ 0.01	$ 0.02	$ 0.02
Restricted stock vesting percentage			50.00%
2011 Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Option vesting proportion per year			20.00%
Vesting period			5 years
Stock options term from the grant date, maximum			10 years

XML

STOCK-BASED COMPENSATION (Estimated Unamortized Compensation Expense Recognized in Future) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2014	$ 559
For year ending December 31, 2015	1,702
For year ending December 31, 2016	1,285
For year ending December 31, 2017	458
For year ending December 31, 2018	56
Total	4,060
Stock Options [Member]
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2014	79
For year ending December 31, 2015	233
For year ending December 31, 2016	130
For year ending December 31, 2017	15
Total	457
Restricted Stock [Member]
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2014	480
For year ending December 31, 2015	1,469
For year ending December 31, 2016	1,155
For year ending December 31, 2017	443
For year ending December 31, 2018	56
Total	$ 3,603

XML

STOCK-BASED COMPENSATION (Summary of Shares Available in Each Plan) (Details) (2011 Plan [Member])	9 Months Ended
	Sep. 30, 2014
2011 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Authorization	1,000,000
Granted	(516,727)
Expired, forfeited, or cancelled	50,260
Remaining available for grant	533,533

XML

FAIR VALUE MEASUREMENTS (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 item	Sep. 30, 2013
FAIR VALUE MEASUREMENTS [Abstract]
Weighted average pull through rate			90.00%
Minimum number of market participants			4,000
Nonrecurring fair value adjustments recorded on loans held for sale	$ 139,000	$ 177,000	$ 225,000	$ 363,000
Total valuation expenses related to OREO properties	$ 6,200,000	$ 491,000	$ 7,265,000	$ 491,000

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SECURITIES (Tables)

9 Months Ended

Sep. 30, 2014

SECURITIES [Abstract]

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

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2014 and December 31, 2013 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized				Estimated
	Cost		Gains		(Losses)		Fair Value
September 30, 2014
U.S. government and agency securities	$	1,328	$	603	$	-	$	1,931
Obligations of states and political subdivisions		419,525		17,545		(1,413)		435,657
Corporate and other bonds		79,069		264		(434)		78,899
Mortgage-backed securities		562,229		8,605		(1,506)		569,328
Other securities		9,823		33		(35)		9,821
Total securities	$	1,071,974	$	27,050	$	(3,388)	$	1,095,636
December 31, 2013
U.S. government and agency securities	$	1,654	$	499	$	-	$	2,153
Obligations of states and political subdivisions		255,335		6,107		(6,612)		254,830
Corporate and other bonds		9,479		115		(160)		9,434
Mortgage-backed securities		405,389		4,954		(2,981)		407,362
Other securities		3,617		26		(74)		3,569
Total securities	$	675,474	$	11,701	$	(9,827)	$	677,348

Schedule of Gross Unrealized Losses and Fair Value of Investments

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

	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2014
Obligations of states and political subdivisions	$	5,156	$	(62)	$	53,000	$	(1,351)	$	58,156	$	(1,413)
Mortgage-backed securities		142,368		(507)		45,989		(999)		188,357		(1,506)
Corporate bonds and other securities		32,090		(154)		4,477		(315)		36,567		(469)
Totals	$	179,614	$	(723)	$	103,466	$	(2,665)	$	283,080	$	(3,388)
December 31, 2013
Obligations of states and political subdivisions	$	80,368	$	(5,504)	$	8,886	$	(1,108)	$	89,254	$	(6,612)
Mortgage-backed securities		168,297		(2,806)		24,254		(175)		192,551		(2,981)
Corporate bonds and other securities		6,804		(80)		1,720		(154)		8,524		(234)
Totals	$	255,469	$	(8,390)	$	34,860	$	(1,437)	$	290,329	$	(9,827)

Schedule of Amortized Cost and Estimated Fair Value of Securities

The following table presents the amortized cost and estimated fair value of securities as of September 30, 2014 and December 31, 2013, by contractual maturity (dollars in thousands).  Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2014				December 31, 2013
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	17,809	$	17,855	$	6,791	$	6,796
Due after one year through five years		37,812		38,801		21,666		22,497
Due after five years through ten years		282,900		289,141		116,735		119,269
Due after ten years		733,453		749,839		530,282		528,786
Total securities available for sale	$	1,071,974	$	1,095,636	$	675,474	$	677,348

Schedule of Other-Than-Temporary Impairment

OTTI recognized for the periods presented is summarized as follow (dollars in thousands):

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2013	$	400
Reductions for securities sold during the period (realized)		(400)
Cumulative credit losses on investment securities, through September 30, 2014	$	-

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Impaired Loans Individually Evaluated for Impairment by Class) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	$ 94,662	$ 95,315
Loans without a specific allowance, Unpaid Principal Balance	101,870	100,032
Loans without a specific allowance, YTD Average Investment	111,964	108,847
Loans without a specific allowance, Interest Income Recognized	3,288	3,653
Loans with a specific allowance, Recorded Investment	41,347	17,306
Loans with a specific allowance, Unpaid Principal Balance	43,703	18,652
Loans with a specific allowance, Related Allowance	4,105	1,963
Loans with a specific allowance, YTD Average Investment	45,745	19,632
Loans with a specific allowance, Interest Income Recognized	1,302	668
Recorded Investment	136,009	112,621
Unpaid Principal Balance	145,573	118,684
Year to Date Average Investment	157,709	128,479
Interest Income Recognized	4,590	4,321
Commercial Construction [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	6,289	10,520
Loans without a specific allowance, Unpaid Principal Balance	6,390	10,523
Loans without a specific allowance, YTD Average Investment	6,392	9,073
Loans without a specific allowance, Interest Income Recognized	163	282
Loans with a specific allowance, Recorded Investment	383	357
Loans with a specific allowance, Unpaid Principal Balance	383	692
Loans with a specific allowance, Related Allowance	201	135
Loans with a specific allowance, YTD Average Investment	353	1,136
Loans with a specific allowance, Interest Income Recognized	9	9
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	9,721	4,281
Loans without a specific allowance, Unpaid Principal Balance	10,046	4,648
Loans without a specific allowance, YTD Average Investment	10,227	4,845
Loans without a specific allowance, Interest Income Recognized	213	206
Loans with a specific allowance, Recorded Investment	8,113	3,797
Loans with a specific allowance, Unpaid Principal Balance	8,317	3,937
Loans with a specific allowance, Related Allowance	761	284
Loans with a specific allowance, YTD Average Investment	9,398	4,000
Loans with a specific allowance, Interest Income Recognized	356	181
Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	22,966	15,012
Loans without a specific allowance, Unpaid Principal Balance	23,066	15,100
Loans without a specific allowance, YTD Average Investment	23,158	15,288
Loans without a specific allowance, Interest Income Recognized	839	572
Loans with a specific allowance, Recorded Investment	10,701	549
Loans with a specific allowance, Unpaid Principal Balance	10,685	597
Loans with a specific allowance, Related Allowance	506	76
Loans with a specific allowance, YTD Average Investment	11,037	616
Loans with a specific allowance, Interest Income Recognized	406	40
Raw Land and Lots [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	45,652	52,259
Loans without a specific allowance, Unpaid Principal Balance	48,404	52,551
Loans without a specific allowance, YTD Average Investment	57,544	61,606
Loans without a specific allowance, Interest Income Recognized	1,889	2,024
Loans with a specific allowance, Recorded Investment	3,759	1,875
Loans with a specific allowance, Unpaid Principal Balance	3,789	1,905
Loans with a specific allowance, Related Allowance	487	83
Loans with a specific allowance, YTD Average Investment	4,426	1,985
Loans with a specific allowance, Interest Income Recognized	71	101
Single Family Investment Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	2,975	5,520
Loans without a specific allowance, Unpaid Principal Balance	3,396	6,021
Loans without a specific allowance, YTD Average Investment	3,555	6,396
Loans without a specific allowance, Interest Income Recognized	106	261
Loans with a specific allowance, Recorded Investment	7,773	3,389
Loans with a specific allowance, Unpaid Principal Balance	9,234	3,676
Loans with a specific allowance, Related Allowance	733	335
Loans with a specific allowance, YTD Average Investment	8,904	3,894
Loans with a specific allowance, Interest Income Recognized	171	114
Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	2,781	4,035
Loans without a specific allowance, Unpaid Principal Balance	5,881	6,835
Loans without a specific allowance, YTD Average Investment	6,203	7,083
Loans without a specific allowance, Interest Income Recognized	8	195
Loans with a specific allowance, Recorded Investment	4,463	2,722
Loans with a specific allowance, Unpaid Principal Balance	4,768	3,086
Loans with a specific allowance, Related Allowance	456	204
Loans with a specific allowance, YTD Average Investment	5,012	3,214
Loans with a specific allowance, Interest Income Recognized	171	84
Other Commercial [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	962	55
Loans without a specific allowance, Unpaid Principal Balance	966	134
Loans without a specific allowance, YTD Average Investment	990	134
Loans without a specific allowance, Interest Income Recognized	43
Loans with a specific allowance, Recorded Investment	432	255
Loans with a specific allowance, Unpaid Principal Balance	449	269
Loans with a specific allowance, Related Allowance	39	35
Loans with a specific allowance, YTD Average Investment	480	254
Loans with a specific allowance, Interest Income Recognized	22	6
Mortgage [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	2,459	1,361
Loans without a specific allowance, Unpaid Principal Balance	2,490	1,361
Loans without a specific allowance, YTD Average Investment	2,502	1,374
Loans without a specific allowance, Interest Income Recognized	19	60
Loans with a specific allowance, Recorded Investment	3,984	4,041
Loans with a specific allowance, Unpaid Principal Balance	4,064	4,147
Loans with a specific allowance, Related Allowance	740	660
Loans with a specific allowance, YTD Average Investment	4,095	4,183
Loans with a specific allowance, Interest Income Recognized	50	123
Consumer Construction [Member]
Financing Receivable, Impaired [Line Items]
Loans with a specific allowance, Recorded Investment	376
Loans with a specific allowance, Unpaid Principal Balance	376
Loans with a specific allowance, Related Allowance	34
Loans with a specific allowance, YTD Average Investment	377
Loans with a specific allowance, Interest Income Recognized	14
Indirect Auto [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment		11
Loans without a specific allowance, Unpaid Principal Balance	11	19
Loans without a specific allowance, YTD Average Investment	13	26
Loans without a specific allowance, Interest Income Recognized
Indirect Marine [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	90	495
Loans without a specific allowance, Unpaid Principal Balance	191	874
Loans without a specific allowance, YTD Average Investment	191	887
Loans without a specific allowance, Interest Income Recognized		42
Loans with a specific allowance, Recorded Investment	332
Loans with a specific allowance, Unpaid Principal Balance	536
Loans with a specific allowance, Related Allowance	14
Loans with a specific allowance, YTD Average Investment	540
Loans with a specific allowance, Interest Income Recognized	12
HELOCs [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	678	1,604
Loans without a specific allowance, Unpaid Principal Balance	822	1,755
Loans without a specific allowance, YTD Average Investment	980	1,921
Loans without a specific allowance, Interest Income Recognized	8	11
Loans with a specific allowance, Recorded Investment	580
Loans with a specific allowance, Unpaid Principal Balance	635
Loans with a specific allowance, Related Allowance	13
Loans with a specific allowance, YTD Average Investment	649
Loans with a specific allowance, Interest Income Recognized	14
Other Consumer [Member]
Financing Receivable, Impaired [Line Items]
Loans without a specific allowance, Recorded Investment	89	162
Loans without a specific allowance, Unpaid Principal Balance	207	211
Loans without a specific allowance, YTD Average Investment	209	214
Loans without a specific allowance, Interest Income Recognized
Loans with a specific allowance, Recorded Investment	451	321
Loans with a specific allowance, Unpaid Principal Balance	467	343
Loans with a specific allowance, Related Allowance	121	151
Loans with a specific allowance, YTD Average Investment	474	350
Loans with a specific allowance, Interest Income Recognized	$ 6	$ 10

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SECURITIES (Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Investment Securities) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	$ 1,071,974	$ 675,474
Gross Unrealized Gains	27,050	11,701
Gross Unrealized (Losses)	(3,388)	(9,827)
Total securities available for sale, Estimated Fair Value	1,095,636	677,348
US Government Agencies Debt Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	1,328	1,654
Gross Unrealized Gains	603	499
Gross Unrealized (Losses)
Total securities available for sale, Estimated Fair Value	1,931	2,153
Obligations of States and Political Subdivisions [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	419,525	255,335
Gross Unrealized Gains	17,545	6,107
Gross Unrealized (Losses)	(1,413)	(6,612)
Total securities available for sale, Estimated Fair Value	435,657	254,830
Corporate and Other Bonds [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	79,069	9,479
Gross Unrealized Gains	264	115
Gross Unrealized (Losses)	(434)	(160)
Total securities available for sale, Estimated Fair Value	78,899	9,434
Mortgage Backed Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	562,229	405,389
Gross Unrealized Gains	8,605	4,954
Gross Unrealized (Losses)	(1,506)	(2,981)
Total securities available for sale, Estimated Fair Value	569,328	407,362
Other Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	9,823	3,617
Gross Unrealized Gains	33	26
Gross Unrealized (Losses)	(35)	(74)
Total securities available for sale, Estimated Fair Value	$ 9,821	$ 3,569

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FAIR VALUE MEASUREMENTS (Carrying Values and Estimated Fair Values of the Company's Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 148,692	$ 73,023
Securities available for sale	1,095,636	677,348
Restricted stock	48,554	26,036
Loans held for sale	30,857	53,185
Net loans	5,167,987	3,035,504
Interest rate swap	828	33
Cash flow hedges	33
Accrued interest receivable	21,260	15,000
LIABILITIES
Deposits	5,634,121	3,238,777
Borrowings	508,702	443,237
Accrued interest payable	1,963	902
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Carrying Value [Member]
ASSETS
Cash and cash equivalents	148,692	73,023
Securities available for sale	1,095,636	677,348
Restricted stock	48,554	26,036
Loans held for sale	30,857	53,185
Net loans	5,138,894	3,009,233
Interest rate swap	828	33
Cash flow hedges	33
Accrued interest receivable	21,260	15,000
LIABILITIES
Deposits	5,634,050	3,236,842
Borrowings	527,679	463,314
Accrued interest payable	1,963	902
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS
Cash and cash equivalents	148,692	73,023
Securities available for sale
Restricted stock
Loans held for sale
Net loans
Interest rate swap
Cash flow hedges
Accrued interest receivable
LIABILITIES
Deposits
Borrowings
Accrued interest payable
Interest rate swap
Cash flow hedges
Significant Other Observable Inputs Level 2 [Member]
ASSETS
Cash and cash equivalents
Securities available for sale	1,095,636	677,348
Restricted stock	48,554	26,036
Loans held for sale	30,857	53,185
Net loans
Interest rate swap	828	33
Cash flow hedges	33
Accrued interest receivable	21,260	15,000
LIABILITIES
Deposits	5,634,121	3,238,777
Borrowings	508,702	443,237
Accrued interest payable	1,963	902
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Significant Unobservable Inputs Level 3 [Member]
ASSETS
Cash and cash equivalents
Securities available for sale
Restricted stock
Loans held for sale
Net loans	5,167,987	3,035,504
Interest rate swap
Cash flow hedges
Accrued interest receivable
LIABILITIES
Deposits
Borrowings
Accrued interest payable
Interest rate swap
Cash flow hedges
Interest Rate Lock Commitments [Member]
ASSETS
Derivative assets	612
Interest Rate Lock Commitments [Member] | Carrying Value [Member]
ASSETS
Derivative assets	612
Interest Rate Lock Commitments [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS
Derivative assets
Interest Rate Lock Commitments [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS
Derivative assets
Interest Rate Lock Commitments [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS
Derivative assets	$ 612

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ACQUISITIONS (Schedule of Business Acquisition and the Amounts of Acquired Identifiable Assets and Liabilities) (Details) (USD $) In Thousands, except Share data, unless otherwise specified			0 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Jan. 01, 2014 StellarOne Bank [Member]	Jan. 01, 2014 StellarOne Bank [Member]
Fair value of assets acquired:
Cash and cash equivalents				$ 49,989
Securities available for sale				460,892
Loans held for sale				11,377
Loans				2,238,981
Bank premise and equipment				69,618
OREO				4,319
Core deposit intangible				29,570
Other assets				94,466
Total assets				2,959,212
Fair value of liabilities assumed:
Deposits				2,479,874
Short-term borrowings				49,227
Long-term borrowings				98,697
Other Liabilities				19,367
Total liabilities				2,647,165
Net identifiable assets acquired				312,047
Preliminary goodwill	296,876	59,400		237,476	[1]
Net assets acquired				549,523
Company's common shares issued			22,147,874
Purchase price per share of the Company's common stock				$ 24.81	[2]
Value of Company common stock issued			549,489
Value of stock options outstanding			34
Fair value of total consideration transferred			$ 549,523

[1] No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the community bank segment.

[2] The value of the shares of common stock exchanged with StellarOne shareholders was based upon the closing price of the Company's common stock at December 31, 2013, the last trading day prior to the date of acquisition.

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of TDR by Class and Modification Type) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013 loan	Sep. 30, 2014 loan	Sep. 30, 2013 loan
Financing Receivable, Modifications [Line Items]
No. of Loans	1	2	5	27
Recorded investment at period end	$ 989	$ 306	$ 1,401	$ 7,659
Troubled Debt Restructuring Term Modification at Market Rate [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans	1	1	5	21
Recorded investment at period end	989	167	1,401	6,567
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Commercial Construction [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				2
Recorded investment at period end				545
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans		1		2
Recorded investment at period end		167		1,093
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans	1		1	1
Recorded investment at period end	989		989	749
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Raw Land and Lots [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				3
Recorded investment at period end				382
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Single Family Investment Real Estate [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans			1	7
Recorded investment at period end			110	2,499
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans			1	4
Recorded investment at period end			33	613
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Other Commercial [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans			2
Recorded investment at period end			269
Troubled Debt Restructuring Term Modification at Market Rate [Member] | Mortgage [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				2
Recorded investment at period end				686
Troubled Debt Restructuring Term Modification Below Market Rate [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				3
Recorded investment at period end				311
Troubled Debt Restructuring Term Modification Below Market Rate [Member] | Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				1
Recorded investment at period end				149
Troubled Debt Restructuring Term Modification Below Market Rate [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				1
Recorded investment at period end				8
Troubled Debt Restructuring Term Modification Below Market Rate [Member] | Mortgage [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				1
Recorded investment at period end				154
Modified to Interest Only at Market Rate [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans		1		3
Recorded investment at period end		139		781
Modified to Interest Only at Market Rate [Member] | Raw Land and Lots [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans				1
Recorded investment at period end				43
Modified to Interest Only at Market Rate [Member] | Mortgage [Member]
Financing Receivable, Modifications [Line Items]
No. of Loans		1		2
Recorded investment at period end		$ 139		$ 738

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DERIVATIVES (Narrative) (Details) (USD $)	9 Months Ended				9 Months Ended			9 Months Ended					9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014 Minimum [Member]	Sep. 30, 2014 Maximum [Member]	Sep. 30, 2014 Trust Swaps [Member]	Sep. 30, 2014 Trust Swaps [Member] Minimum [Member]	Sep. 30, 2014 Trust Swaps [Member] Maximum [Member]	Sep. 30, 2014 Interest Rate Swaps [Member]	Sep. 30, 2014 Prime Loan Swaps [Member] item loan	Sep. 30, 2013 Prime Loan Swaps [Member] item	Sep. 30, 2014 Prime Loan Swaps [Member] Minimum [Member]	Sep. 30, 2014 Prime Loan Swaps [Member] Maximum [Member]	Sep. 30, 2014 FHLB Advance Swaps [Member] loan	Sep. 30, 2014 FHLB Advance Swaps [Member] Swap One [Member]	Sep. 30, 2014 FHLB Advance Swaps [Member] Swap Two [Member]	Sep. 30, 2014 FHLB Advance Swaps [Member] Minimum [Member]	Sep. 30, 2014 FHLB Advance Swaps [Member] Maximum [Member]	Sep. 30, 2014 Prime Loan Swaps and FHLB Advance Swaps [Member]	Mar. 31, 2014 Discontinued Prime Loan Swaps [Member] item	Sep. 30, 2014 Interest Rate Lock Commitments [Member]
Derivatives, Fair Value [Line Items]
Interest rate spread calculated on the Wall Street Journal Prime Index								1.00%
Notional amount				$ 68,000,000				$ 55,000,000				$ 140,000,000						$ 45,000,000	$ 70,300,000
Number of loan swaps with floor rates								1
Cash flow hedge term					3 years	6 years
Unrealized loss of fair value of the cash flow hedges	(5,000,000)
Positions								4	8			4						4
Receive Rate										4.71%	5.20%
Pay Rate				2.77%						4.00%					3.16%	3.46%
Interest rate swaps agreement, term								6 years					6 years	5 years
Market value of securities pledged as collateral for derivative instruments							2,000,000										4,900,000
Period of time between issuance of a loan commitment, closing, and sale of the loan		30 days	120 days
Deposits with other financial institutions serves as collateral				5,700,000
Asset																			$ 612,000

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BORROWINGS (Short-Term Borrowings) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Short-term borrowings
Securities sold under agreements to repurchase	$ 33,517	$ 52,455
Other short-term borrowings	195,000	211,500
Total short-term borrowings	228,517	263,955
Maximum month-end outstanding balance	274,281	263,955
Average outstanding balance during the period	238,104	119,433
Average interest rate during the period	0.24%	0.30%
Average interest rate at end of period	0.20%	0.30%
Other short-term borrowings:
Federal Funds purchased		31,500
FHLB	$ 195,000	$ 180,000

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Stated at Face Amount, Net of Unearned Income) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Loans stated at face amount, net of unearned income
Loans, net of unearned income	$ 5,171,003	$ 3,039,368	$ 3,002,246
Commercial Construction [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	303,576	213,675
Commercial Real Estate - Owner Occupied [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	856,615	500,764
Commercial Real Estate - Non-Owner Occupied [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	1,423,093	755,905
Raw Land and Lots [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	210,557	187,529
Single Family Investment Real Estate [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	407,972	237,640
Commercial and Industrial [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	380,613	215,702
Other Commercial [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	79,356	52,490
Mortgage [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	489,076	237,414
Consumer Construction [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	76,991	48,984
Indirect Auto [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	194,633	174,843
Indirect Marine [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	40,347	38,633
HELOCs [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	496,145	281,579
Credit Card [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	23,736	23,211
Other Consumer [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	$ 188,293	$ 70,999

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013
Operating activities:
Net income	$ 37,519		$ 26,392
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation of bank premises and equipment	8,160		4,542
Writedown of OREO	7,265		491
Amortization, net	18,351		10,675
Accretion and amortization related to acquisition, net	(7,870)
Provision for loan losses	3,300		4,850
Gains on securities transactions, net	(1,449)		(47)
Decrease in loans held for sale, net	33,093		109,519
(Gains) losses on sales of other real estate owned, net	(128)		224
Losses on bank premises, net	384		337
Stock-based compensation expenses	862		622
Issuance of common stock grants for services	362
Net decrease (increase) in other assets	12,115		(26,255)
Net (decrease) increase in other liabilities	(3,791)		7,266
Net cash and cash equivalents provided by operating activities	108,173		138,616
Investing activities:
Purchases of securities available for sale	(351,153)		(177,948)
Proceeds from sales of securities available for sale	273,447		42,843
Proceeds from maturities, calls and paydowns of securities available for sale	111,390		106,327
Net decrease (increase) in loans	100,844		(48,515)
Net increase in bank premises and equipment	(5,262)		(2,981)
Proceeds from sales of other real estate owned	9,929		5,085
Improvements to other real estate owned	(262)		(460)
Cash acquired in bank acquisitions	49,989
Net cash and cash equivalents provided by (used in) investing activities	188,922		(75,649)
Financing activities:
Net increase in noninterest-bearing deposits	100,629		51,298
Net decrease in interest-bearing deposits	(175,918)		(124,140)
Net (decrease) increase in short-term borrowings	(84,665)		18,932
Net increase in long-term borrowings	1,518	[1]	1,668	[1]
Cash dividends paid - common stock	(19,020)		(9,296)
Repurchase of common stock	(43,477)		(9,499)
Issuance of common stock	1,072		269
Taxes paid related to net share settlement of equity awards	(1,565)		(19)
Net cash and cash equivalents used in financing activities	(221,426)		(70,787)
Increase (decrease) in cash and cash equivalents	75,669		(7,820)
Cash and cash equivalents at beginning of the period	73,023		82,902
Cash and cash equivalents at end of the period	148,692		75,082
Cash payments for:
Interest	21,210		16,258
Income taxes	12,400		7,900
Supplemental schedule of noncash investing and financing activities
Unrealized gain (loss) on securities available for sale	21,786		(18,846)
Changes in fair value of interest rate swap loss	(3)		1,589
Transfers from loans to other real estate owned	5,257		7,227
Transfers from bank premises to other real estate owned	10,866		988
Transactions related to bank and branch acquisitions
Assets acquired	2,959,212
Liabilities assumed	$ 2,647,165

[1] See Note 6 "Borrowings" related to 2014 activity.

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BORROWINGS (Trust Preferred Capital Notes Qualify for Tier 1 Capital) (Details) (USD $)			9 Months Ended										4 Months Ended	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Statutory Trust I [Member]		Sep. 30, 2014 Statutory Trust II [Member]		Sep. 30, 2014 VFG Limited Liability Trust I Indenture [Member]		Sep. 30, 2014 FNB Statutory Trust II Indenture [Member]		Sep. 30, 2014 Trust Preferred Capital Notes [Member]		Sep. 30, 2014 LIBOR [Member]	Sep. 30, 2014 LIBOR [Member] Statutory Trust I [Member]	Sep. 30, 2014 LIBOR [Member] Statutory Trust II [Member]	Sep. 30, 2014 LIBOR [Member] VFG Limited Liability Trust I Indenture [Member]	Sep. 30, 2014 LIBOR [Member] FNB Statutory Trust II Indenture [Member]
Trust preferred capital notes qualify for Tier 1 capital
Trust preferred capital notes principal balance			$ 22,500,000		$ 36,000,000		$ 20,000,000		$ 12,000,000		$ 90,500,000
Investment	$ 223,821,000	$ 149,435,000	$ 696,000	[1]	$ 1,114,000	[1]	$ 619,000	[1]	$ 372,000	[1]	$ 2,801,000	[1]
Spread to 3-Month LIBOR													1.50%	2.75%	1.40%	2.73%	3.10%
Rate			2.99%		1.64%		2.97%		3.34%
Maturity			Jun. 17, 2034		Jun. 15, 2036		Mar. 18, 2034		Jun. 26, 2033

[1] reported as 'Other Assets' within the Consolidated Balance Sheets

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SECURITIES (Schedule of Gross Unrealized Losses and Fair Value of Investments) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	$ 179,614	$ 255,469
Less than 12 months, Unrealized Losses	(723)	(8,390)
More than 12 Months, Fair value	103,466	34,860
More than 12 Months, Unrealized Losses	(2,665)	(1,437)
Fair value, Total	283,080	290,329
Unrealized Losses, Total	(3,388)	(9,827)
Obligations of States and Political Subdivisions [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	5,156	80,368
Less than 12 months, Unrealized Losses	(62)	(5,504)
More than 12 Months, Fair value	53,000	8,886
More than 12 Months, Unrealized Losses	(1,351)	(1,108)
Fair value, Total	58,156	89,254
Unrealized Losses, Total	(1,413)	(6,612)
Mortgage Backed Securities [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	142,368	168,297
Less than 12 months, Unrealized Losses	(507)	(2,806)
More than 12 Months, Fair value	45,989	24,254
More than 12 Months, Unrealized Losses	(999)	(175)
Fair value, Total	188,357	192,551
Unrealized Losses, Total	(1,506)	(2,981)
Corporate Bonds and Other Securities [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	32,090	6,804
Less than 12 months, Unrealized Losses	(154)	(80)
More than 12 Months, Fair value	4,477	1,720
More than 12 Months, Unrealized Losses	(315)	(154)
Fair value, Total	36,567	8,524
Unrealized Losses, Total	$ (469)	$ (234)

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2014

COMMITMENTS AND CONTINGENCIES [Abstract]

Balances of Commitments and Contingencies

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

	September 30,		December 31,
	2014		2013
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,576,050	$	891,680
Standby letters of credit		139,459		48,107
Mortgage loan rate lock commitments		70,343		54,834
Total commitments with off-balance sheet risk	$	1,785,852	$	994,621
Commitments with balance sheet risk:
Loans held for sale	$	31,469	$	53,185
Total other commitments	$	1,817,321	$	1,047,806
(1) Includes unfunded overdraft protection.

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BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2014

BORROWINGS [Abstract]

Short-Term Borrowings

Total short-term borrowings consist of the following as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,		December 31,
	2014		2013
Securities sold under agreements to repurchase	$	33,517	$	52,455
Other short-term borrowings		195,000		211,500
Total short-term borrowings	$	228,517	$	263,955
Maximum month-end outstanding balance	$	274,281	$	263,955
Average outstanding balance during the period		238,104		119,433
Average interest rate during the period		0.24%		0.30%
Average interest rate at end of period		0.20%		0.30%
Other short-term borrowings:
Federal funds purchased	$	-	$	31,500
FHLB	$	195,000	$	180,000

Trust Preferred Capital Notes Qualify for Tier 1 Capital

In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $7.3 million at September 30, 2014.  The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes. 

	Principal		Investment(1)		Spread to 3-Month LIBOR	Rate	Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000	2.75%	2.99%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II		36,000,000		1,114,000	1.40%	1.64%	6/15/2036
VFG Limited Liability Trust I Indenture		20,000,000		619,000	2.73%	2.97%	3/18/2034
FNB Statutory Trust II Indenture		12,000,000		372,000	3.10%	3.34%	6/26/2033
Total	$	90,500,000	$	2,801,000
(1) reported as 'Other Assets' within the Consolidated Balance Sheets

Advances from the FHLB

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB with a remaining fair value premium of $2.4 million at September 30, 2014.  As of September 30, 2014, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Advance Amount
Adjustable Rate Credit	0.44%	0.68%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		65,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		10,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		10,000
Fixed Rate	-	3.62%	11/28/2017		10,000
Fixed Rate	-	3.44%	7/28/2015		10,000
Fixed Rate	-	3.75%	7/30/2018		5,000
Fixed Rate	-	3.97%	7/30/2018		5,000
Fixed Rate Hybrid	-	2.11%	10/5/2016		25,000
Fixed Rate Hybrid	-	0.91%	7/25/2016		15,000
				$	210,000

As of December 31, 2013, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Advance Amount
Adjustable Rate Credit	0.44%	0.69%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		65,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		10,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		10,000
				$	140,000

Contractual Maturities of Long-Term Debt

As of September 30, 2014, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value Premium (Discount)		Prepayment Penalty		Total Long-term Borrowings
Remaining three months in 2014	$	-	$	-	$	-	$	75	$	(455)	$	(380)
2015		-		-		10,000		175		(1,831)		8,344
2016		-		17,500		40,000		271		(1,882)		55,889
2017		-		-		10,000		170		(1,923)		8,247
2018		-		-		10,000		(143)		(1,970)		7,887
2019		-		-		-		(286)		(2,018)		(2,304)
Thereafter		93,301		-		140,000		(5,923)		(5,899)		221,479
Total long-term borrowings	$	93,301	$	17,500	$	210,000	$	(5,661)	$	(15,978)	$	299,162

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Acquired Loan Portfolio and Accretable Yield) (Details) (USD $) In Thousands, unless otherwise specified				9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Sep. 30, 2014 Purchased Impaired [Member]	Sep. 30, 2013 Purchased Impaired [Member]
Accretable Yield
Balance at beginning of period				$ 2,980	$ 3,147
Additions				34,653
Accretion				(5,681)
Charge-offs				(472)	(54)
Other, net				(1,678)
Balance at end of period				29,802	3,093
Carrying Amount of Loans
Balance at beginning of period	119,743	3,622	3,951	3,622	4,565
Additions				145,454
Charge-offs					(96)
Transfers to OREO				(1,006)	(201)
Payments received, net				(28,327)	(317)
Balance at end of period	$ 119,743	$ 3,622	$ 3,951	$ 119,743	$ 3,951

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SECURITIES (Schedule of Amortized Cost and Estimated Fair Value of Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of amortized cost and estimated fair value of securities
Due in one year or less, Amortized Cost	$ 17,809	$ 6,791
Due in one year or less, Estimated Fair Value	17,855	6,796
Due after one year through five years, Amortized Cost	37,812	21,666
Due after one year through five years, Estimated Fair Value	38,801	22,497
Due after five years through ten years, Amortized Cost	282,900	116,735
Due after five years through ten years, Estimated Fair Value	289,141	119,269
Due after ten years, Amortized Cost	733,453	530,282
Due after ten years, Estimated Fair Value	749,839	528,786
Total securities available for sale, Amortized Cost	1,071,974	675,474
Total securities available for sale, Estimated Fair Value	$ 1,095,636	$ 677,348

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DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2014

Cash Flow Hedging [Member]

Derivative [Line Items]

Summary of the Derivatives

Shown below is a summary of the derivatives designated as cash flow hedges at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Notional						Receive		Pay		Life
	Positions	Amount		Asset		Liability		Rate		Rate		(Years)
As of September 30, 2014
Pay fixed - receive floating interest rate swaps	7	$	208,000	$	-	$	5,049	0.24%	(1)	2.77%	(1)	2.38	(1)
Receive fixed - pay floating interest rate swaps	4	$	55,000	$	33	$	-	4.93%		3.55%		4.97
(1) Due to their deferred nature, the rates and the life exclude the four FHLB advance swaps.
		Notional						Receive		Pay		Life
	Positions	Amount		Asset		Liability		Rate		Rate		(Years)
As of December 31, 2013
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	-	$	3,046	0.25%		3.51%		3.46
Receive fixed - pay floating interest rate swaps	8	$	100,000	$	-	$	516	5.17%		3.89%		5.72

Interest Rate Swaps [Member]

Derivative [Line Items]

Summary of the Derivatives

Shown below is a summary regarding loan swap derivative activities at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Notional						Receive	Pay	Life
	Positions	Amount		Asset		Liability		Rate	Rate	(Years)
As of September 30, 2014
Receive fixed - pay floating interest rate swaps	29	$	103,943	$	828	$	-	4.32%	2.55%	7.49
Pay fixed - receive floating interest rate swaps	29	$	103,943	$	-	$	828	2.55%	4.32%	7.49
		Notional						Receive	Pay	Life
	Positions	Amount		Asset		Liability		Rate	Rate	(Years)
As of December 31, 2013
Receive fixed - pay floating interest rate swaps	1	$	718	$	33	$	-	4.58%	2.92%	8.59
Pay fixed - receive floating interest rate swaps	1	$	718	$	-	$	33	2.92%	4.58%	8.59

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2014

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]

Change in Accumulated Other Comprehensive Income

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2014 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedge		Total
Balance - June 30, 2014	$	14,202	$	(3,321)	$	10,881
Other comprehensive income (loss)		1,798		(228)		1,570
Amounts reclassified from accumulated other comprehensive income		(647)		164		(483)
Net current period other comprehensive income (loss)		1,151		(64)		1,087
Balance - September 30, 2014	$	15,353	$	(3,385)	$	11,968

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedges		Total
Balance - December 31, 2013	$	1,192	$	(3,382)	$	(2,190)
Other comprehensive income		14,843		(431)		14,412
Amounts reclassified from accumulated other comprehensive income		(682)		428		(254)
Net current period other comprehensive income		14,161		(3)		14,158
Balance - September 30, 2014	$	15,353	$	(3,385)	$	11,968

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2013 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedge		Total
Balance - June 30, 2013	$	2,719	$	(3,354)	$	(635)
Other comprehensive income (loss)		(393)		293		(100)
Amounts reclassified from accumulated other comprehensive income		(3)		161		158
Net current period other comprehensive income (loss)		(396)		454		58
Balance - September 30, 2013	$	2,323	$	(2,900)	$	(577)

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedges		Total
Balance - December 31, 2012	$	14,573	$	(4,489)	$	10,084
Other comprehensive income (loss)		(12,220)		1,049		(11,171)
Amounts reclassified from accumulated other comprehensive income		(30)		540		510
Net current period other comprehensive income (loss)		(12,250)		1,589		(10,661)
Balance - September 30, 2013	$	2,323	$	(2,900)	$	(577)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Common Stock [Member]
Stock purchased under stock repurchase plan, shares	1,731,025	500,000
Issuance of common stock under Dividend Reinvestment Plan, shares	37,489	37,182
Issuance of common stock under Equity Compensation Plans, shares	67,057	16,845
Vesting of restricted stock under Equity Compensation Plans, shares	14,707	12,120
Issuance of Common Stock in regard to acquisition, shares	22,147,874
Issuance of common stock for services rendered, shares	14,374
Net settle for taxes on Restricted Stock Awards, shares	63,916	2,563
Retained Earnings [Member]
Dividends on common stock, per share	$ 0.43	$ 0.40
Accumulated Other Comprehensive Income (Loss) [Member]
Other comprehensive income (loss), tax	$ 7,625	$ 6,597

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2014

FAIR VALUE MEASUREMENTS [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

	Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		33		-		33
Interest rate lock commitments		-		-		612		612
Securities available for sale:
U.S. government and agency securities		-		1,931		-		1,931
Obligations of states and political subdivisions		-		435,657		-		435,657
Corporate and other bonds		-		78,899		-		78,899
Mortgage-backed securities		-		569,328		-		569,328
Other securities		-		9,821		-		9,821
LIABILITIES
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		5,049		-		5,049

		Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	33	$	-	$	33
Securities available for sale:
U.S. government and agency securities		-		2,153		-		2,153
Obligations of states and political subdivisions		-		254,830		-		254,830
Corporate and other bonds		-		9,434		-		9,434
Mortgage-backed securities		-		407,362		-		407,362
Other securities		-		3,569		-		3,569
LIABILITIES
Interest rate swap	$	-	$	33	$	-	$	33
Cash flow hedges		-		3,562		-		3,562

Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1			Level 2		Level 3		Balance
ASSETS
Loans held for sale	$		-	$	30,857	$	-	$	30,857
Impaired loans			-		-		26,910		26,910
Other real estate owned			-		-		37,754		37,754

		Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1			Level 2		Level 3		Balance
ASSETS
Loans held for sale	$		-	$	53,185	$	-	$	53,185
Impaired loans			-		-		7,985		7,985
Other real estate owned			-		-		34,116		34,116

Summary of Quantitative Information About Level 3 Fair Value Measurements

The following table displays quantitative information about Level 3 Fair Value Measurements at September 30, 2014 (dollars in thousands):

	Fair Value Measurements at September 30, 2014
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	2	Market comparables	Discount applied to market comparables(1)	0%
Commercial Real Estate - Owner Occupied		5,628	Market comparables	Discount applied to market comparables (1)	25%
Commercial Real Estate - Non-Owner Occupied		9,731	Market comparables	Discount applied to market comparables (1)	16%
Raw Land and Lots		2,483	Market comparables	Discount applied to market comparables (1)	1%
Single Family Investment Real Estate		5,189	Market comparables	Discount applied to market comparables (1)	15%
Commercial and Industrial		1,102	Market comparables	Discount applied to market comparables (1)	27%
Other (2)		2,775	Market comparables	Discount applied to market comparables (1)	6%
Total Impaired Loans		26,910
Other real estate owned		37,754	Market comparables	Discount applied to market comparables (1)	32%
Total	$	64,664
(1)A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.
(2)The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Indirect Marine, HELOCs, and Other Consumer.

The following table displays quantitative information about Level 3 Fair Value Measurements at December 31, 2013 (dollars in thousands):

	Fair Value Measurements at December 31, 2013
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	219	Market comparables	Discount applied to market comparables (1)	0%
Commercial Real Estate - Owner Occupied		2,043	Market comparables	Discount applied to market comparables (1)	17%
Raw Land and Lots		908	Market comparables	Discount applied to market comparables (1)	10%
Single Family Investment Real Estate		1,332	Market comparables	Discount applied to market comparables (1)	0%
Commercial and Industrial		1,719	Market comparables	Discount applied to market comparables (1)	28%
Other (2)		1,764	Market comparables	Discount applied to market comparables (1)	0%
Total Impaired Loans		7,985
Other real estate owned		34,116	Market comparables	Discount applied to market comparables (1)	33%
Total	$	42,101
(1)  A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.
(2)The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Consumer Construction, HELOCs, and Other Consumer.

Carrying Values and Estimated Fair Values of the Company's Financial Instruments

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2014 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	148,692	$	148,692	$	-	$	-	$	148,692
Securities available for sale		1,095,636		-		1,095,636		-		1,095,636
Restricted stock		48,554		-		48,554		-		48,554
Interest rate lock commitments		612		-		-		612		612
Loans held for sale		30,857		-		30,857		-		30,857
Net loans		5,138,894		-		-		5,167,987		5,167,987
Interest rate swap		828		-		828		-		828
Cash flow hedges		33		-		33		-		33
Accrued interest receivable		21,260		-		21,260		-		21,260
LIABILITIES
Deposits	$	5,634,050	$	-	$	5,634,121	$	-	$	5,634,121
Borrowings		527,679		-		508,702		-		508,702
Accrued interest payable		1,963		-		1,963		-		1,963
Interest rate swap		828		-		828		-		828
Cash flow hedges		5,049		-		5,049		-		5,049

			Fair Value Measurements at December 31, 2013 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	73,023	$	73,023	$	-	$	-	$	73,023
Securities available for sale		677,348		-		677,348		-		677,348
Restricted stock		26,036		-		26,036		-		26,036
Loans held for sale		53,185		-		53,185		-		53,185
Net loans		3,009,233		-		-		3,035,504		3,035,504
Interest rate swap		33		-		33		-		33
Accrued interest receivable		15,000		-		15,000		-		15,000
LIABILITIES
Deposits	$	3,236,842	$	-	$	3,238,777	$	-	$	3,238,777
Borrowings		463,314		-		443,237		-		443,237
Accrued interest payable		902		-		902		-		902
Interest rate swap		33		-		33		-		33
Cash flow hedges		3,562		-		3,562		-		3,562

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EARNINGS PER SHARE (Reconcilement of the Denominators of the Basic and Diluted EPS Computations) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Reconcilement of the denominators of the basic and diluted EPS computations
Basic EPS, Net Income Available to Common Stockholders (Numerator)	$ 14,924	$ 7,946	$ 37,519	$ 26,392
Basic EPS, Weighted Average Shares (Denominator)	45,649	24,895	46,269	24,987
Basic EPS, Per Share Amount	$ 0.33	$ 0.32	$ 0.81	$ 1.06
Effect of dilutive stock awards, Weighted Average Shares (Denominator)	89	68	98	44
Diluted EPS, Net Income Available to Common Stockholders (Numerator)	$ 14,924	$ 7,946	$ 37,519	$ 26,392
Diluted EPS, Weighted Average Common Shares	45,738	24,963	46,367	25,031
Diluted EPS, Per Share Amount	$ 0.33	$ 0.32	$ 0.81	$ 1.06

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ACQUISITIONS (Summary of Acquisition-Related Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Business Combination, Separately Recognized Transactions [Line Items]
Salaries and employee benefits	$ 26,060	$ 17,416	$ 83,726	$ 53,294
Professional services	1,400	795	3,897	2,183
Total	1,695	473	19,524	1,393
StellarOne Bank [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Salaries and employee benefits	200		7,878
Professional services	122	473	3,717	1,393
Other costs of operations	1,373		7,929
Total	$ 1,695	$ 473	$ 19,524	$ 1,393

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Allowance for Loan Loss Activity, by Portfolio Segment, Balances for Allowance for Credit Losses, and Loans Based on Impairment Methodology) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Allowance for loan losses:
Balance, beginning of the year			$ 30,135	$ 34,916	$ 34,916
Recoveries credited to allowance			2,865	1,892	2,781
Loans charged off			(4,191)	(7,781)	(13,618)
Provision charged to operations	1,800	1,800	3,300	4,850	6,056
Balance, end of period	32,109	33,877	32,109	33,877	30,135
Ending balance: individually evaluated for impairment	4,105	7,061	4,105	7,061	1,963
Ending balance: collectively evaluated for impairment	28,004	26,816	28,004	26,816	28,172
Total	32,109	33,877	32,109	33,877	30,135
Loans:
Ending balance: individually evaluated for impairment	134,165	115,296	134,165	115,296	108,999
Ending balance: collectively evaluated for impairment	4,917,095	2,882,999	4,917,095	2,882,999	2,926,747
Ending balance: loans acquired with deteriorated credit quality	119,743	3,951	119,743	3,951	3,622
Total loans	5,171,003	3,002,246	5,171,003	3,002,246	3,039,368
Commercial [Member]
Allowance for loan losses:
Balance, beginning of the year			19,856	24,821	24,821
Recoveries credited to allowance			1,999	1,051	1,496
Loans charged off			(1,991)	(4,775)	(8,534)
Provision charged to operations			1,455	3,200	2,073
Balance, end of period	21,319	24,297	21,319	24,297	19,856
Ending balance: individually evaluated for impairment	3,183	5,607	3,183	5,607	1,152
Ending balance: collectively evaluated for impairment	18,136	18,690	18,136	18,690	18,704
Total	21,319	24,297	21,319	24,297	19,856
Loans:
Ending balance: individually evaluated for impairment	125,310	107,566	125,310	107,566	101,894
Ending balance: collectively evaluated for impairment	3,430,451	2,014,220	3,430,451	2,014,220	2,059,079
Ending balance: loans acquired with deteriorated credit quality	106,021	3,031	106,021	3,031	2,732
Total loans	3,661,782	2,124,817	3,661,782	2,124,817	2,163,705
Consumer [Member]
Allowance for loan losses:
Balance, beginning of the year			10,227	10,107	10,107
Recoveries credited to allowance			866	841	1,285
Loans charged off			(2,200)	(3,006)	(5,084)
Provision charged to operations			1,793	1,741	3,919
Balance, end of period	10,686	9,683	10,686	9,683	10,227
Ending balance: individually evaluated for impairment	922	1,454	922	1,454	811
Ending balance: collectively evaluated for impairment	9,764	8,229	9,764	8,229	9,416
Ending balance: loans acquired with deteriorated credit quality
Total	10,686	9,683	10,686	9,683	10,227
Loans:
Ending balance: individually evaluated for impairment	8,855	7,730	8,855	7,730	7,105
Ending balance: collectively evaluated for impairment	1,486,644	868,779	1,486,644	868,779	867,668
Ending balance: loans acquired with deteriorated credit quality	13,722	920	13,722	920	890
Total loans	1,509,221	877,429	1,509,221	877,429	875,663
Unallocated [Member]
Allowance for loan losses:
Balance, beginning of the year			52	(12)	(12)
Recoveries credited to allowance
Loans charged off
Provision charged to operations			52	(91)	64
Balance, end of period	104	(103)	104	(103)	52
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	104	(103)	104	(103)	52
Ending balance: loans acquired with deteriorated credit quality
Total	104	(103)	104	(103)	52
Loans:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Total loans

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS:
Interest rate swap	$ 828	$ 33
Cash flow hedges	33
Available for sale securities, estimated fair value	1,095,636	677,348
LIABILITIES:
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Interest rate swap
Cash flow hedges
Available for sale securities, estimated fair value
LIABILITIES:
Interest rate swap
Cash flow hedges
Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Interest rate swap	828	33
Cash flow hedges	33
Available for sale securities, estimated fair value	1,095,636	677,348
LIABILITIES:
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Interest rate swap
Cash flow hedges
Available for sale securities, estimated fair value
LIABILITIES:
Interest rate swap
Cash flow hedges
Recurring [Member]
ASSETS:
Interest rate swap	828	33
Cash flow hedges	33
LIABILITIES:
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Recurring [Member] | Interest Rate Lock Commitments [Member]
ASSETS:
Derivative assets	612
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Interest rate swap
Cash flow hedges
LIABILITIES:
Interest rate swap
Cash flow hedges
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Interest Rate Lock Commitments [Member]
ASSETS:
Derivative assets
Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Interest rate swap	828	33
Cash flow hedges	33
LIABILITIES:
Interest rate swap	828	33
Cash flow hedges	5,049	3,562
Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Interest rate swap
Cash flow hedges
LIABILITIES:
Interest rate swap
Cash flow hedges
Recurring [Member] | Significant Unobservable Inputs Level 3 [Member] | Interest Rate Lock Commitments [Member]
ASSETS:
Derivative assets	612
US Government Agencies Debt Securities [Member]
ASSETS:
Available for sale securities, estimated fair value	1,931	2,153
US Government Agencies Debt Securities [Member] | Recurring [Member]
ASSETS:
Available for sale securities, estimated fair value	1,931	2,153
US Government Agencies Debt Securities [Member] | Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Available for sale securities, estimated fair value
US Government Agencies Debt Securities [Member] | Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Available for sale securities, estimated fair value	1,931	2,153
US Government Agencies Debt Securities [Member] | Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Available for sale securities, estimated fair value
Obligations of States and Political Subdivisions [Member]
ASSETS:
Available for sale securities, estimated fair value	435,657	254,830
Obligations of States and Political Subdivisions [Member] | Recurring [Member]
ASSETS:
Available for sale securities, estimated fair value	435,657	254,830
Obligations of States and Political Subdivisions [Member] | Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Available for sale securities, estimated fair value
Obligations of States and Political Subdivisions [Member] | Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Available for sale securities, estimated fair value	435,657	254,830
Obligations of States and Political Subdivisions [Member] | Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Available for sale securities, estimated fair value
Corporate and Other Bonds [Member]
ASSETS:
Available for sale securities, estimated fair value	78,899	9,434
Corporate and Other Bonds [Member] | Recurring [Member]
ASSETS:
Available for sale securities, estimated fair value	78,899	9,434
Corporate and Other Bonds [Member] | Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Available for sale securities, estimated fair value
Corporate and Other Bonds [Member] | Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Available for sale securities, estimated fair value	78,899	9,434
Corporate and Other Bonds [Member] | Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Available for sale securities, estimated fair value
Mortgage Backed Securities [Member]
ASSETS:
Available for sale securities, estimated fair value	569,328	407,362
Mortgage Backed Securities [Member] | Recurring [Member]
ASSETS:
Available for sale securities, estimated fair value	569,328	407,362
Mortgage Backed Securities [Member] | Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Available for sale securities, estimated fair value
Mortgage Backed Securities [Member] | Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Available for sale securities, estimated fair value	569,328	407,362
Mortgage Backed Securities [Member] | Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Available for sale securities, estimated fair value
Other Securities [Member]
ASSETS:
Available for sale securities, estimated fair value	9,821	3,569
Other Securities [Member] | Recurring [Member]
ASSETS:
Available for sale securities, estimated fair value	9,821	3,569
Other Securities [Member] | Recurring [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS:
Available for sale securities, estimated fair value
Other Securities [Member] | Recurring [Member] | Significant Other Observable Inputs Level 2 [Member]
ASSETS:
Available for sale securities, estimated fair value	9,821	3,569
Other Securities [Member] | Recurring [Member] | Significant Unobservable Inputs Level 3 [Member]
ASSETS:
Available for sale securities, estimated fair value

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Cash and cash equivalents:
Cash and due from banks	$ 112,891	$ 66,090
Interest-bearing deposits in other banks	35,489	6,781
Money market investments	1	1
Federal funds sold	311	151
Total cash and cash equivalents	148,692	73,023
Securities available for sale	1,095,636	677,348
Restricted stock, at cost	48,554	26,036
Loans held for sale, net	31,469	53,185
Loans, net of unearned income	5,171,003	3,039,368
Less allowance for loan losses	32,109	30,135
Net loans	5,138,894	3,009,233
Bank premises and equipment, net	138,549	82,815
Other real estate owned, net of valuation allowance	37,754	34,116
Core deposit intangibles, net	34,089	11,980
Goodwill	296,876	59,400
Other assets	223,821	149,435
Total assets	7,194,334	4,176,571
LIABILITIES
Noninterest-bearing demand deposits	1,204,343	691,674
Interest-bearing deposits	4,429,707	2,545,168
Total deposits	5,634,050	3,236,842
Securities sold under agreements to repurchase	33,517	52,455
Other short-term borrowings	195,000	211,500
Long-term borrowings	299,162	199,359
Other liabilities	54,932	38,176
Total liabilities	6,216,661	3,738,332
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000 and 36,000,000, respectively; issued and outstanding, 45,514,028 shares and 24,976,434 shares, respectively.	60,267	33,020
Surplus	651,178	170,770
Retained earnings	254,260	236,639
Accumulated other comprehensive income (loss)	11,968	(2,190)
Total stockholders' equity	977,673	438,239
Total liabilities and stockholders' equity	$ 7,194,334	$ 4,176,571

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SECURITIES (Schedule of Other-Than-Temporary Impairment) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Schedule of other-than-temporary impairment
Cumulative credit losses on investment securities, through December 31, 2013	$ 400
Reductions for securities sold during the period (realized)	(400)
Cumulative credit losses on investment securities, through September 30, 2014

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Comprehensive Income [Abstract]
Tax expense (benefit) related to reclassification adjustment for losses included in net income	$ (89,000)	$ (87,000)	$ (231,000)	$ (291,000)
Tax expense (benefit) related to unrealized holding (losses) gains arising during period	968,000	(212,000)	7,992,000	(6,580,000)
Tax expense (benefit) related to reclassification adjustment for (gains) losses included in net income	$ 348,000	$ 2,000	$ 367,000	$ 17,000

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INTANGIBLE ASSETS (Estimated Remaining Amortization Expense of Core Deposit Intangibles) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Estimated remaining amortization expense of core deposit intangibles
For the remaining three months of 2014	$ 2,334
For the year ending December 31, 2015	8,444
For the year ending December 31, 2016	6,932
For the year ending December 31, 2017	5,590
For the year ending December 31, 2018	4,144
For the year ending December 31, 2019	3,093
Thereafter	3,552
Net Carrying Value/Total estimated amortization expense	$ 34,089	$ 11,980	$ 12,900

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SEGMENT REPORTING DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2014

SEGMENT REPORTING DISCLOSURES [Abstract]

Information About Reportable Segments and Reconciliation

Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three and nine months ended September 30, 2014 and 2013 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Dollars in thousands)
	Community Bank		Mortgage		Eliminations		Consolidated
Three Months Ended September 30, 2014
Net interest income	$	64,162	$	317	$	-	$	64,479
Provision for loan losses		1,800		-		-		1,800
Net interest income after provision for loan losses		62,362		317		-		62,679
Noninterest income		14,308		2,604		(170)		16,742
Noninterest expenses		56,188		3,903		(170)		59,921
Income (loss) before income taxes		20,482		(982)		-		19,500
Income tax expense (benefit)		4,930		(354)		-		4,576
Net income (loss)	$	15,552	$	(628)	$	-	$	14,924
Total assets	$	7,189,047	$	41,857	$	(36,570)	$	7,194,334
Three Months Ended September 30, 2013
Net interest income	$	37,465	$	393	$	-	$	37,858
Provision for loan losses		1,800		-		-		1,800
Net interest income after provision for loan losses		35,665		393		-		36,058
Noninterest income		7,322		2,062		(168)		9,216
Noninterest expenses		29,904		4,396		(168)		34,132
Income (loss) before income taxes		13,083		(1,941)		-		11,142
Income tax expense (benefit)		3,902		(706)		-		3,196
Net income (loss)	$	9,181	$	(1,235)	$	-	$	7,946
Total assets	$	4,041,661	$	69,010	$	(63,563)	$	4,047,108
Nine Months Ended September 30, 2014
Net interest income	$	191,090	$	863	$	-	$	191,953
Provision for loan losses		3,300		-		-		3,300
Net interest income after provision for loan losses		187,790		863		-		188,653
Noninterest income		40,224		7,932		(511)		47,645
Noninterest expenses		174,780		12,908		(511)		187,177
Income (loss) before income taxes		53,234		(4,113)		-		49,121
Income tax expense (benefit)		13,106		(1,504)		-		11,602
Net income (loss)	$	40,128	$	(2,609)	$	-	$	37,519
Total assets	$	7,189,047	$	41,857	$	(36,570)	$	7,194,334
Nine Months Ended September 30, 2013
Net interest income	$	111,612	$	1,402	$	-	$	113,014
Provision for loan losses		4,850		-		-		4,850
Net interest income after provision for loan losses		106,762		1,402		-		108,164
Noninterest income		20,266		10,586		(503)		30,349
Noninterest expenses		89,242		13,176		(503)		101,915
Income (loss) before income taxes		37,786		(1,188)		-		36,598
Income tax expense (benefit)		10,633		(427)		-		10,206
Net income (loss)	$	27,153	$	(761)	$	-	$	26,392
Total assets	$	4,041,661	$	69,010	$	(63,563)	$	4,047,108

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Loans available for sale in which the related rate lock commitment expired	$ 3,100,000	$ 2,000,000
Valuation reserve on aged loans held for sale in which the related rate lock commitment expired	104,000	94,000
Daily average required reserves	50,200,000	16,000,000
Deposits with other financial institutions	18,900,000
Uninsured deposits with other financial institutions	12,100,000
Indemnification reserves	840,000	627,000
Trust Swaps [Member]
Deposits with other financial institutions serves as collateral	$ 5,700,000

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SEGMENT REPORTING DISCLOSURES

9 Months Ended

Sep. 30, 2014

SEGMENT REPORTING DISCLOSURES [Abstract]

SEGMENT REPORTING DISCLOSURES

13.SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment provides loan, deposit, investment, and trust services to retail and commercial customers throughout Virginia.  The community bank segment includes the Company’s one banking subsidiary which has131 branches in total throughout Virginia as well as trust and wealth management services.  Non-bank affiliates of the Company include Union Investment Services, Inc., which provides full brokerage services, and Union Insurance Group, LLC, which offers various lines of insurance products.  The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland, and the Washington D.C. metro area.  These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

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

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

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charged the mortgage banking segment interest at the one month LIBOR rate plus 1.5% with no floor.  These transactions are eliminated in the consolidation process.  A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three and nine months ended September 30, 2014 and 2013 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Dollars in thousands)
	Community Bank		Mortgage		Eliminations		Consolidated
Three Months Ended September 30, 2014
Net interest income	$	64,162	$	317	$	-	$	64,479
Provision for loan losses		1,800		-		-		1,800
Net interest income after provision for loan losses		62,362		317		-		62,679
Noninterest income		14,308		2,604		(170)		16,742
Noninterest expenses		56,188		3,903		(170)		59,921
Income (loss) before income taxes		20,482		(982)		-		19,500
Income tax expense (benefit)		4,930		(354)		-		4,576
Net income (loss)	$	15,552	$	(628)	$	-	$	14,924
Total assets	$	7,189,047	$	41,857	$	(36,570)	$	7,194,334
Three Months Ended September 30, 2013
Net interest income	$	37,465	$	393	$	-	$	37,858
Provision for loan losses		1,800		-		-		1,800
Net interest income after provision for loan losses		35,665		393		-		36,058
Noninterest income		7,322		2,062		(168)		9,216
Noninterest expenses		29,904		4,396		(168)		34,132
Income (loss) before income taxes		13,083		(1,941)		-		11,142
Income tax expense (benefit)		3,902		(706)		-		3,196
Net income (loss)	$	9,181	$	(1,235)	$	-	$	7,946
Total assets	$	4,041,661	$	69,010	$	(63,563)	$	4,047,108
Nine Months Ended September 30, 2014
Net interest income	$	191,090	$	863	$	-	$	191,953
Provision for loan losses		3,300		-		-		3,300
Net interest income after provision for loan losses		187,790		863		-		188,653
Noninterest income		40,224		7,932		(511)		47,645
Noninterest expenses		174,780		12,908		(511)		187,177
Income (loss) before income taxes		53,234		(4,113)		-		49,121
Income tax expense (benefit)		13,106		(1,504)		-		11,602
Net income (loss)	$	40,128	$	(2,609)	$	-	$	37,519
Total assets	$	7,189,047	$	41,857	$	(36,570)	$	7,194,334
Nine Months Ended September 30, 2013
Net interest income	$	111,612	$	1,402	$	-	$	113,014
Provision for loan losses		4,850		-		-		4,850
Net interest income after provision for loan losses		106,762		1,402		-		108,164
Noninterest income		20,266		10,586		(503)		30,349
Noninterest expenses		89,242		13,176		(503)		101,915
Income (loss) before income taxes		37,786		(1,188)		-		36,598
Income tax expense (benefit)		10,633		(427)		-		10,206
Net income (loss)	$	27,153	$	(761)	$	-	$	26,392
Total assets	$	4,041,661	$	69,010	$	(63,563)	$	4,047,108

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ACQUISITIONS (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended				0 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Jan. 01, 2014 StellarOne Bank [Member]	Sep. 30, 2014 StellarOne Bank [Member]	Sep. 30, 2013 StellarOne Bank [Member]	Sep. 30, 2014 StellarOne Bank [Member]	Sep. 30, 2013 StellarOne Bank [Member]	Jan. 01, 2014 StellarOne Bank [Member]	Jan. 01, 2014 StellarOne Bank [Member] Performing Financing Receivable [Member]
Business Acquisition [Line Items]
Number of shares equivalent to each share of acquired entity												0.9739
Number of common shares issued							22,147,874
Acquired performing loans, Fair value													$ 2,100,000,000
Value of Company common stock issued							549,489,000
Acquired performing loans, principal and interest payments receivable													2,500,000,000
Acquired performing loans not expected to be collected												35,400,000
Fair value of loans acquired with a deterioration of credit quality	119,743,000	3,951,000	119,743,000	3,951,000	3,622,000							145,454,000
Carry-over for allowance for credit losses	32,109,000	33,877,000	32,109,000	33,877,000	30,135,000	34,916,000
Acquisition and conversion costs	$ 1,695,000	$ 473,000	$ 19,524,000	$ 1,393,000				$ 1,695,000	$ 473,000	$ 19,524,000	$ 1,393,000

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2014

ACQUISITIONS [Abstract]

Schedule of Business Acquisition and the Amounts of Acquired Identifiable Assets and Liabilities

The following table provides a preliminary assessment of the assets purchased, liabilities assumed, and the consideration transferred (dollars in thousands, except share and per share data):

Statement of Net Assets Acquired (at fair value) and consideration transferred:

Fair value of assets acquired:
Cash and cash equivalents	$	49,989
Securities available for sale		460,892
Loans held for sale		11,377
Loans		2,238,981
Bank premises and equipment		69,618
OREO		4,319
Core deposit intangible		29,570
Other assets		94,466
Total assets	$	2,959,212
Fair value of liabilities assumed:
Deposits	$	2,479,874
Short-term borrowings		49,227
Long-term borrowings		98,697
Other liabilities		19,367
Total liabilities	$	2,647,165
Net identifiable assets acquired	$	312,047
Preliminary Goodwill (1)		237,476
Net assets acquired	$	549,523
Consideration :
Company's common shares issued		22,147,874
Purchase price per share of the Company's common stock (2)	$	24.81
Value of Company common stock issued	$	549,489
Value of stock options outstanding		34
Fair value of total consideration transferred	$	549,523
(1) - No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the community bank segment.
(2) - The value of the shares of common stock exchanged with StellarOne shareholders was based upon the closing price of the Company's common stock at December 31, 2013, the last trading day prior to the date of acquisition.

Outstanding Principal Balance and Carrying Amount of Acquired Impaired Loans

The following table presents the acquired impaired loans receivable at the acquisition date (dollars in thousands):

Contractually required principal and interest payments	$	214,803
Nonaccretable difference		(34,696)
Cash flows expected to be collected		180,107
Accretable difference		(34,653)
Fair value of loans acquired with a deterioration of credit quality	$	145,454

Business Acquisition, Pro Forma Information

The Company expects to achieve further operating cost savings and other business synergies, including branch closures, as a result of the acquisition which are not reflected in the pro forma amounts below (dollars in thousands):

	Three months ended		Nine months ended
	September 30, 2013		September 30, 2013
	(unaudited)		(unaudited)
Total revenues (net interest income plus noninterest income)	$	82,180	$	246,972
Net income	$	17,827	$	54,834

Summary of Acquisition-Related Expenses

A summary of acquisition-related expenses associated with the StellarOne acquisition included in the Consolidated Statements of Income is as follows (dollars in thousands): 

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Salaries and employee benefits	$	200	$	-	$	7,878	$	-
Professional services		122		473		3,717		1,393
Other costs of operations		1,373		-		7,929		-
Total	$	1,695	$	473	$	19,524	$	1,393

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DERIVATIVES (Summary of the Derivatives) (Details) (USD $) In Thousands, unless otherwise specified				9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended		9 Months Ended			12 Months Ended	9 Months Ended		9 Months Ended
	Sep. 30, 2014 Trust Swaps [Member]	Sep. 30, 2014 Prime Loan Swaps [Member] item	Sep. 30, 2013 Prime Loan Swaps [Member] item	Sep. 30, 2014 Receive fixed - pay floating interest rate swaps [Member] Prime Loan Swaps [Member] item	Dec. 31, 2013 Receive fixed - pay floating interest rate swaps [Member] Prime Loan Swaps [Member] item	Sep. 30, 2014 Receive fixed - pay floating interest rate swaps [Member] Interest Rate Swaps [Member] item	Dec. 31, 2013 Receive fixed - pay floating interest rate swaps [Member] Interest Rate Swaps [Member] item	Dec. 31, 2013 Pay fixed - receive floating interest rate swaps [Member] Trust Swaps [Member] item	Sep. 30, 2014 Pay fixed - receive floating interest rate swaps [Member] Trust Swaps and FHLB Advance Swaps [Member] item		Sep. 30, 2014 Pay fixed - receive floating interest rate swaps [Member] Interest Rate Swaps [Member] item	Dec. 31, 2013 Pay fixed - receive floating interest rate swaps [Member] Interest Rate Swaps [Member] item	Sep. 30, 2014 Minimum [Member] Trust Swaps [Member]	Sep. 30, 2014 Minimum [Member] Prime Loan Swaps [Member]	Sep. 30, 2014 Maximum [Member] Trust Swaps [Member]	Sep. 30, 2014 Maximum [Member] Prime Loan Swaps [Member]
Summary of the derivative designated as a cash flow hedge
Positions		4	8	4	8	29	1	1	7		29	1
Notional Amount	$ 68,000	$ 55,000		$ 55,000	$ 100,000	$ 103,943	$ 718	$ 36,000	$ 208,000		$ 103,943	$ 718
Asset				33		828	33
Liability					$ 516			$ 3,046	$ 5,049		$ 828	$ 33
Receive Rate				4.93%	5.17%	4.32%	4.58%	0.25%	0.24%	[1]	2.55%	2.92%		4.71%		5.20%
Pay Rate	2.77%			3.55%	3.89%	2.55%	2.92%	3.51%	2.77%	[1]	4.32%	4.58%		4.00%
Life (Years)				4 years 11 months 19 days	5 years 8 months 19 days	7 years 5 months 27 days	8 years 7 months 2 days	3 years 5 months 16 days	2 years 4 months 17 days	[1]	7 years 5 months 27 days	8 years 7 months 2 days	3 years		6 years

[1] Due to their deferred nature, the rates and the life exclude the four FHLB advance swaps.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands	Common Stock [Member]	Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2012	$ 33,510	$ 176,635	$ 215,634	$ 10,084	$ 435,863
Net income			26,392		26,392
Other comprehensive income (loss), (net of tax)				(10,661)	(10,661)
Dividends on Common Stock			(9,296)		(9,296)
Stock purchased under stock repurchase plan	(664)	(8,835)			(9,499)
Issuance of common stock under Dividend Reinvestment Plan	50	656	(706)
Issuance of common stock under Equity Compensation Plans	21	248			269
Vesting of restricted stock under Equity Compensation Plans	16	(16)
Net settle for taxes on Restricted Stock Awards	(3)	(16)			(19)
Stock-based compensation expense		622			622
Balance at Sep. 30, 2013	32,930	169,294	232,024	(577)	433,671
Balance at Dec. 31, 2013	33,020	170,770	236,639	(2,190)	438,239
Net income			37,519		37,519
Other comprehensive income (loss), (net of tax)				14,158	14,158
Issuance of Common Stock in regard to acquisition	29,457	520,066			549,523
Dividends on Common Stock			(19,020)		(19,020)
Stock purchased under stock repurchase plan	(2,303)	(41,174)			(43,477)
Issuance of common stock under Dividend Reinvestment Plan	50	828	(878)
Issuance of common stock under Equity Compensation Plans	89	983			1,072
Issuance of common stock for services rendered	19	343			362
Vesting of restricted stock under Equity Compensation Plans	20	(20)
Net settle for taxes on Restricted Stock Awards	(85)	(1,480)			(1,565)
Stock-based compensation expense		862			862
Balance at Sep. 30, 2014	$ 60,267	$ 651,178	$ 254,260	$ 11,968	$ 977,673

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Consolidated Balance Sheets [Abstract]
Common stock, par value	$ 1.33	$ 1.33
Common stock, shares authorized	100,000,000	36,000,000
Common stock, shares issued	45,514,028	24,976,434
Common stock, shares outstanding	45,514,028	24,976,434

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DERIVATIVES

9 Months Ended

Sep. 30, 2014

DERIVATIVES [Abstract]

DERIVATIVES

8.DERIVATIVES

The Company has three interest rate swap agreements (the “trust swaps”) as part of the management of interest rate risk related to the trust preferred capital notes further described in Note 6 “Borrowings” in the “Notes to Consolidated Financial Statements”.  The Company designated the trust swaps as a cash flow hedge intended to protect against the variability of cash flows associated with the aforementioned preferred capital securities.  The trust swaps hedge the interest rate risk, wherein the Company receives interest of LIBOR from a counterparty and pays a weighted average fixed rate of 2.77% to the same counterparty calculated on a notional amount of $68.0 million.  The terms of the trust swaps range from three to six years. 

During the third quarter of 2013, the Company entered into eight interest rate swap agreements (the “prime loan swaps”) as part of the management of interest rate risk.  The Company designated the prime loan swaps as cash flow hedges intended to protect the Company against the variability in the expected future cash flows on the designated variable rate loan products.  During the first quarter of 2014, the Company discontinued four of the prime loan swaps with a total notional amount of $45.0 million, which were in place at December 31, 2013.  The unrealized gain reclassified to earnings related to these four prime loan swaps was not material to the Company’s consolidated financial statements.  The remaining four prime loan swaps hedge the underlying cash flows, wherein the Company receives a fixed interest rate ranging from 4.71% to 5.20% from the counterparty and pays interest based on the Wall Street Journal prime index, with a spread of up to 1.00%, to the same counterparty calculated on a notional amount of $55.0 million.  One of the four prime loan swaps contains a floor rate of 4.00%.  The terms of the four prime loan swaps is six years with a fixed rate that started September 17, 2013.

During 2014, the Company entered into four swaps (“FHLB advance swaps”) with a total notional amount of $140.0 million.  The Company designated the FHLB advance swaps as a cash flow hedge intended to protect against the variability in the expected future cash flows on the designated variable rate FHLB borrowings.  The FHLB advance swaps hedge the interest rate risk, wherein the Company will receive an interest rate based on the three month LIBOR from the counterparty and pays an interest rate rangingfrom 3.16% to 3.46% to the same counterparty calculated on the notional amount.  The swaps are deferred starting swaps with terms of six years and five years and effective dates of February 23, 2017 and February 23, 2018, respectively.

All swaps were entered into with counterparties that met the Company’s credit standards and the agreement contains collateral provisions protecting the at-risk party.  The Company believes that the credit risk inherent in the contract is not significant.  As of September 30, 2014, the Company had $5.7 million of cash pledged as collateral for the trust swaps and securities with a market value of $4.9 million pledged as collateral for the prime loan swaps and FHLB advance swaps.

Amounts receivable or payable are recognized as accrued under the terms of the agreements.  In accordance with ASC 815, Derivatives and Hedging, the Company has designated the trust swaps, prime loan swaps, and FHLB advance swaps as cash flow hedges, with the effective portions of the derivatives’ unrealized gains or losses recorded as a component of other comprehensive income.  The ineffective portions of the unrealized gains or losses, if any, would be recorded in “Other expense” in the Consolidated Statements of Income.  The Company has assessed the effectiveness of each hedging relationship by comparing the changes in cash flows on the designated hedged item.  The Company’s cash flow hedges are deemed to be effective.  At September 30, 2014, the fair value of the Company’s cash flow hedges was an unrealized loss of $5.0 million, the amount the Company would have expected to pay if the contract was terminated.  The liability is recorded as a component of other comprehensive income recorded in the Company’s Consolidated Statements of Comprehensive Income. 

Shown below is a summary of the derivatives designated as cash flow hedges at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Notional						Receive		Pay		Life
	Positions	Amount		Asset		Liability		Rate		Rate		(Years)
As of September 30, 2014
Pay fixed - receive floating interest rate swaps	7	$	208,000	$	-	$	5,049	0.24%	(1)	2.77%	(1)	2.38	(1)
Receive fixed - pay floating interest rate swaps	4	$	55,000	$	33	$	-	4.93%		3.55%		4.97
(1) Due to their deferred nature, the rates and the life exclude the four FHLB advance swaps.
		Notional						Receive		Pay		Life
	Positions	Amount		Asset		Liability		Rate		Rate		(Years)
As of December 31, 2013
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	-	$	3,046	0.25%		3.51%		3.46
Receive fixed - pay floating interest rate swaps	8	$	100,000	$	-	$	516	5.17%		3.89%		5.72

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs.  Upon entering into the loan swaps, the Company enters into offsetting positions with counterparties in order to minimize interest rate risk.  These back-to-back loan swaps qualify as financial derivatives with fair values reported in “Other assets” and “Other liabilities” in the Consolidated Balance Sheets.  As of September 30, 2014, the Company had securities with a market value of $2.0 million pledged as collateral for the loan swaps.  Shown below is a summary regarding loan swap derivative activities at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Notional						Receive	Pay	Life
	Positions	Amount		Asset		Liability		Rate	Rate	(Years)
As of September 30, 2014
Receive fixed - pay floating interest rate swaps	29	$	103,943	$	828	$	-	4.32%	2.55%	7.49
Pay fixed - receive floating interest rate swaps	29	$	103,943	$	-	$	828	2.55%	4.32%	7.49
		Notional						Receive	Pay	Life
	Positions	Amount		Asset		Liability		Rate	Rate	(Years)
As of December 31, 2013
Receive fixed - pay floating interest rate swaps	1	$	718	$	33	$	-	4.58%	2.92%	8.59
Pay fixed - receive floating interest rate swaps	1	$	718	$	-	$	33	2.92%	4.58%	8.59

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

The market value of rate lock commitments and best efforts contracts is not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded in stand-alone markets.  The Company determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the value of the underlying asset while taking into consideration the probability that the rate lock commitments will close. 

During the first quarter of 2014, and in connection with the acquisition of StellarOne, the Company began recording the rate lock commitments derivative on its balance sheet at fair value.  Because the amounts associated with the rate lock commitments were determined to be immaterial, the Company did not record the value of the rate locks in any period prior to January 1, 2014.  While the rate lock commitment derivative is still considered immaterial to the consolidated financial statements, the Company began recording this asset on its Consolidated Balance Sheets within “Loans held for sale, net” post-acquisition when integrating the acquired mortgage operations of StellarOne.  The Company’s derivative related to rate lock commitments had a notional amount of $70.3 million at September 30, 2014 with a fair value of $612,000.  This derivative instrument does not qualify for hedge accounting; as a result, changes in fair value are recognized in current period earnings as a component of “Gain on sale of mortgage loans, net of commissions.”

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Union Bankshares Corp
Entity Central Index Key	0000883948
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		45,453,897

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2014

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2014 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedge		Total
Balance - June 30, 2014	$	14,202	$	(3,321)	$	10,881
Other comprehensive income (loss)		1,798		(228)		1,570
Amounts reclassified from accumulated other comprehensive income		(647)		164		(483)
Net current period other comprehensive income (loss)		1,151		(64)		1,087
Balance - September 30, 2014	$	15,353	$	(3,385)	$	11,968

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedges		Total
Balance - December 31, 2013	$	1,192	$	(3,382)	$	(2,190)
Other comprehensive income		14,843		(431)		14,412
Amounts reclassified from accumulated other comprehensive income		(682)		428		(254)
Net current period other comprehensive income		14,161		(3)		14,158
Balance - September 30, 2014	$	15,353	$	(3,385)	$	11,968

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2013 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedge		Total
Balance - June 30, 2013	$	2,719	$	(3,354)	$	(635)
Other comprehensive income (loss)		(393)		293		(100)
Amounts reclassified from accumulated other comprehensive income		(3)		161		158
Net current period other comprehensive income (loss)		(396)		454		58
Balance - September 30, 2013	$	2,323	$	(2,900)	$	(577)

	Unrealized Gains (Losses) on Securities		Change in Fair Value of Cash Flow Hedges		Total
Balance - December 31, 2012	$	14,573	$	(4,489)	$	10,084
Other comprehensive income (loss)		(12,220)		1,049		(11,171)
Amounts reclassified from accumulated other comprehensive income		(30)		540		510
Net current period other comprehensive income (loss)		(12,250)		1,589		(10,661)
Balance - September 30, 2013	$	2,323	$	(2,900)	$	(577)

Reclassifications of unrealized gains (losses) on available for sale securities are reported in the Consolidated Income Statement as "Gains on securities transactions, net" with the corresponding income tax effect being reflected as a component of income tax expense.  Excluding OTTI recovery of $400,000 in the second quarter of 2014, the Company reported gains of $995,000 and $1.0 million for the three and nine months ended September 30, 2014, respectively, and gains of $5,000 and $47,000 for the three and nine months ended September, 30, 2013, respectively, related to gains/losses on the sale of securities.  The tax effect of these transactions during the three and nine months ended September 30, 2014 and 2013 were $348,000 and $367,000 and $2,000 and $17,000, respectively, which were included as a component of income tax expense. 

Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense in the Consolidated Income Statement with the corresponding income tax effect being reflected as a component of income tax expense.  The Company reported net interest expense of $253,000 and$659,000 and $248,000 and $831,000 for the three and nine months ended September 30, 2014 and 2013, respectively.  The tax effect of these transactions during the three and nine months ended September 30, 2014 and 2013 were $89,000 and $231,000 and $87,000 and $291,000, respectively, which were included as a component of income tax expense.

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STOCK-BASED COMPENSATION (Summary of Nonvested Stock Activity) (Details) (Restricted Stock [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Restricted Stock [Member]
Summary of nonvested stock activity
Number of Shares, beginning balance	260,763
Weighted Average Grant-Date Fair Value, beginning balance	$ 16.47
Number of Shares, Granted	134,431
Weighted Average Grant-Date Fair Value, Granted	$ 24.29
Number of Shares, Net settle for taxes	(63,916)
Weighted Average Grant-Date Fair Value, Net settle for taxes	$ 24.83
Number of Shares, Vested	(14,707)
Weighted Average Grant-Date Fair Value, Vested	$ 14.64
Number of Shares, Forfeited	(25,377)
Weighted Average Grant-Date Fair Value, Forfeited	$ 20.94
Number of Shares, ending balance	291,194
Weighted Average Grant-Date Fair Value, ending balance	$ 20.04

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Interest and dividend income:
Interest and fees on loans	$ 62,340	$ 38,895	$ 184,996	$ 116,806
Interest on federal funds sold			1	1
Interest on deposits in other banks	21	3	41	14
Interest and dividends on securities:
Taxable	3,883	1,849	11,391	5,856
Nontaxable	3,347	2,094	10,005	6,135
Total interest and dividend income	69,591	42,841	206,434	128,812
Interest expense:
Interest on deposits	3,027	3,371	7,833	11,033
Interest on federal funds purchased	3	26	49	62
Interest on short-term borrowings	108	62	373	170
Interest on long-term borrowings	1,974	1,524	6,226	4,533
Total interest expense	5,112	4,983	14,481	15,798
Net interest income	64,479	37,858	191,953	113,014
Provision for loan losses	1,800	1,800	3,300	4,850
Net interest income after provision for loan losses	62,679	36,058	188,653	108,164
Noninterest income:
Service charges on deposit accounts	4,458	2,474	13,281	7,093
Other service charges, commissions and fees	5,055	3,185	15,138	9,214
Gains on securities transactions, net	995	5	1,449	47
Gains on sales of mortgage loans, net of commissions	2,598	2,061	7,925	10,581
Losses on sales of bank premises	(79)	(7)	(384)	(337)
Other operating income	3,715	1,498	10,236	3,751
Total noninterest income	16,742	9,216	47,645	30,349
Noninterest expenses:
Salaries and benefits	26,060	17,416	83,726	53,294
Occupancy expenses	4,902	2,820	15,184	8,439
Furniture and equipment expenses	3,050	1,665	8,555	5,250
Communications expense	1,291	698	3,740	2,070
Technology and data processing	3,280	2,013	9,145	5,778
Professional services	1,400	795	3,897	2,183
Marketing and advertising expense	2,064	1,017	4,821	3,177
FDIC assessment premiums and other insurance	1,577	759	4,563	2,305
OREO and credit-related expenses	6,559	1,601	10,254	3,159
Amortization of intangible assets	2,391	921	7,462	2,912
Acquisition and conversion costs	1,695	473	19,524	1,393
Other expenses	5,652	3,954	16,306	11,955
Total noninterest expenses	59,921	34,132	187,177	101,915
Income before income taxes	19,500	11,142	49,121	36,598
Income tax expense	4,576	3,196	11,602	10,206
Net income	$ 14,924	$ 7,946	$ 37,519	$ 26,392
Earnings per common share, basic	$ 0.33	$ 0.32	$ 0.81	$ 1.06
Earnings per common share, diluted	$ 0.33	$ 0.32	$ 0.81	$ 1.06

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SECURITIES

9 Months Ended

Sep. 30, 2014

SECURITIES [Abstract]

SECURITIES

3.SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2014 and December 31, 2013 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized				Estimated
	Cost		Gains		(Losses)		Fair Value
September 30, 2014
U.S. government and agency securities	$	1,328	$	603	$	-	$	1,931
Obligations of states and political subdivisions		419,525		17,545		(1,413)		435,657
Corporate and other bonds		79,069		264		(434)		78,899
Mortgage-backed securities		562,229		8,605		(1,506)		569,328
Other securities		9,823		33		(35)		9,821
Total securities	$	1,071,974	$	27,050	$	(3,388)	$	1,095,636
December 31, 2013
U.S. government and agency securities	$	1,654	$	499	$	-	$	2,153
Obligations of states and political subdivisions		255,335		6,107		(6,612)		254,830
Corporate and other bonds		9,479		115		(160)		9,434
Mortgage-backed securities		405,389		4,954		(2,981)		407,362
Other securities		3,617		26		(74)		3,569
Total securities	$	675,474	$	11,701	$	(9,827)	$	677,348

Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and FHLB, these securities have been classified as restricted equity securities and carried at cost.  These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets.  The FHLB requires the Bank to maintain stock in an amount equal to 4.5% of outstanding borrowings and a specific percentage of the Bank’s total assets.  The Federal Reserve Bank requires the Bank to maintain stock with a par value equal to 6% of its outstanding capital.  Restricted equity securities consist of Federal Reserve Bank stock in the amount of $23.8 million and $6.7 million as of September 30, 2014 and December 31, 2013 and FHLB stock in the amount of $24.7 million and $19.3 million as of September 30, 2014 and December 31, 2013, respectively. 

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

	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2014
Obligations of states and political subdivisions	$	5,156	$	(62)	$	53,000	$	(1,351)	$	58,156	$	(1,413)
Mortgage-backed securities		142,368		(507)		45,989		(999)		188,357		(1,506)
Corporate bonds and other securities		32,090		(154)		4,477		(315)		36,567		(469)
Totals	$	179,614	$	(723)	$	103,466	$	(2,665)	$	283,080	$	(3,388)
December 31, 2013
Obligations of states and political subdivisions	$	80,368	$	(5,504)	$	8,886	$	(1,108)	$	89,254	$	(6,612)
Mortgage-backed securities		168,297		(2,806)		24,254		(175)		192,551		(2,981)
Corporate bonds and other securities		6,804		(80)		1,720		(154)		8,524		(234)
Totals	$	255,469	$	(8,390)	$	34,860	$	(1,437)	$	290,329	$	(9,827)

As of September  30, 2014, there were $103.5 million, or 75 issues, of individual securities that had been in a continuous loss position for more than 12 months.  Additionally, these securities had an unrealized loss of $2.7 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities.  As of December 31, 2013, there were $34.9 million, or 23 issues, of individual securities that had been in a continuous loss position for more than 12 months.  Additionally, these securities had an unrealized loss of $1.4 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities.

The following table presents the amortized cost and estimated fair value of securities as of September 30, 2014 and December 31, 2013, by contractual maturity (dollars in thousands).  Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2014				December 31, 2013
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	17,809	$	17,855	$	6,791	$	6,796
Due after one year through five years		37,812		38,801		21,666		22,497
Due after five years through ten years		282,900		289,141		116,735		119,269
Due after ten years		733,453		749,839		530,282		528,786
Total securities available for sale	$	1,071,974	$	1,095,636	$	675,474	$	677,348

Securities with a carrying value of $371.1 million and $188.2 million as of September 30, 2014 and December 31, 2013, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes.

During each quarter, the Company conducts an assessment of the securities portfolio for OTTI consideration.  The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis.  An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell).  If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss.  Based on the assessment for the quarter ended September  30, 2014, and in accordance with the guidance, no OTTI was recognized.

Based on the assessment for the quarter ended September 30, 2011 and in accordance with the guidance, the Company determined that a single issuer trust preferred security incurred credit-related OTTI of $400,000, which was recognized in earnings for the quarter ended September 30, 2011.  During the quarter ended June 30, 2014, the trust preferred security was called at a premium.  As a result, the Company recognized a gain on the call of the previously written down security of $400,000 in the second quarter of 2014.

OTTI recognized for the periods presented is summarized as follow (dollars in thousands):

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2013	$	400
Reductions for securities sold during the period (realized)		(400)
Cumulative credit losses on investment securities, through September 30, 2014	$	-

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ACQUISITIONS

9 Months Ended

Sep. 30, 2014

ACQUISITIONS [Abstract]

ACQUISITIONS

2.ACQUISITIONS

On January 1, 2014, the Company completed the acquisition of StellarOne, a bank holding company based in Charlottesville, Virginia, in an all stock transaction.  StellarOne’s common shareholders received 0.9739 shares of the Company’s common stock in exchange for each share of StellarOne’s common stock, resulting in the Company issuing 22,147,874common shares at a fair value of $549.5 million.  As a result of the transaction, StellarOne’s former bank subsidiary, StellarOne Bank, became a wholly owned bank subsidiary of the Company.  On May 9, 2014, StellarOne Bank was merged with and into Union First Market Bank. 

The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date.  Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition.  The following table provides a preliminary assessment of the assets purchased, liabilities assumed, and the consideration transferred (dollars in thousands, except share and per share data):

Statement of Net Assets Acquired (at fair value) and consideration transferred:

Fair value of assets acquired:
Cash and cash equivalents	$	49,989
Securities available for sale		460,892
Loans held for sale		11,377
Loans		2,238,981
Bank premises and equipment		69,618
OREO		4,319
Core deposit intangible		29,570
Other assets		94,466
Total assets	$	2,959,212
Fair value of liabilities assumed:
Deposits	$	2,479,874
Short-term borrowings		49,227
Long-term borrowings		98,697
Other liabilities		19,367
Total liabilities	$	2,647,165
Net identifiable assets acquired	$	312,047
Preliminary Goodwill (1)		237,476
Net assets acquired	$	549,523
Consideration :
Company's common shares issued		22,147,874
Purchase price per share of the Company's common stock (2)	$	24.81
Value of Company common stock issued	$	549,489
Value of stock options outstanding		34
Fair value of total consideration transferred	$	549,523
(1) - No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the community bank segment.
(2) - The value of the shares of common stock exchanged with StellarOne shareholders was based upon the closing price of the Company's common stock at December 31, 2013, the last trading day prior to the date of acquisition.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows: 

Loans

The acquired loans were recorded at fair value at the acquisition date without carryover of StellarOne’s previously established allowance for loan losses.  The fair value of the loans was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected on the loans and then applying a market-based discount rate to those cash flows. In this regard, the acquired loans were segregated into pools based on loan type and credit risk. Loan type was determined based on collateral type, purpose, and lien position. Credit risk characteristics included risk rating groups (pass rated loans and adversely classified loans), updated loan-to-value ratios and past due status. For valuation purposes, these pools were further disaggregated by maturity, pricing characteristics (e.g., fixed-rate, adjustable-rate) and re-payment structure (e.g., interest only, fully amortizing, balloon). If new information is obtained regarding facts and circumstances about expected cash flows that existed as of the acquisition date, management will adjust in accordance with accounting for business combinations.

The acquired loans were divided into loans with evidence of credit quality deterioration which are accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, (acquired impaired or PCI) and loans that do not meet this criteria, which are accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, (acquired performing).The fair values of the acquired performing loans were $2.1 billion and the fair values of the acquired impaired loans were $145.5 million.  The gross contractually required principal and interest payments receivable for acquired performing loans was $2.5 billion.  The best estimate of contractual cash flows not expected to be collected related to the acquired performing loans is $35.4 million.

The following table presents the acquired impaired loans receivable at the acquisition date (dollars in thousands):

Contractually required principal and interest payments	$	214,803
Nonaccretable difference		(34,696)
Cash flows expected to be collected		180,107
Accretable difference		(34,653)
Fair value of loans acquired with a deterioration of credit quality	$	145,454

Bank Premises

The fair value of StellarOne’s premises, including land, buildings, and improvements, was determined based upon independent third party appraisals performed by licensed appraisers in the market in which the premises are located.  These appraisals were based upon the highest and best use of the underlying asset(s) with final values determined based upon an analysis of the cost, sales comparison, and income capitalization approaches for each property appraised.  The Company also engaged independent appraisers to value the leasehold interests.  The fair value of the leasehold interest was not material to the consolidated financial statements.

Core Deposit Intangible

The fair value of the core deposit intangible was determined based on a blended market approach and discounted cash flow analysis using a discount rate based on the estimated cost of capital for a market participant. To calculate cash flows, deposit account servicing costs (net of deposit fee income) and interest expense on deposits were compared to the cost of alternative funding sources available through the FHLB. The life of the deposit base and projected deposit attrition rates were determined using StellarOne’s historical deposit data.

Time Deposits

The fair value adjustment of time deposits represents a premium over the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar-term time deposits. The premium is being accreted into income using the sum-of-years digits method over the weighted average remaining life.

Long-term Borrowings

The Company assumed long-term borrowings in the form of FHLB advances and trust preferred capital notes.  The fair value of the trust preferred capital notes assumed was valued using an income approach with consideration of the market approach. The contractual cash flows were projected and discounted using a prevailing market rate. The market rate was developed using a third party broker opinion, implied market yields for recent subordinated debt sales, and new subordinated debt issuances for instruments with similar durations and pricing characteristics. The fair value of FHLB advances represents contractual repayments discounted using interest rates currently available on borrowings with similar characteristics and remaining maturities.

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities were established for acquisition accounting fair value adjustments as the future amortization/accretion of these adjustments represent temporary differences between book income and taxable income.

The following table presents certain pro forma information as if StellarOne had been acquired on January 1, 2013.  These results combine the historical results of StellarOne in the Company's Consolidated Statements of Income and, while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on January 1, 2013.  In particular, no adjustments have been made to eliminate the amount of StellarOne’s provision for credit losses that would not have been necessary had the acquired loans been recorded at fair value as of January 1, 2013.  The Company expects to achieve further operating cost savings and other business synergies, including branch closures, as a result of the acquisition which are not reflected in the pro forma amounts below (dollars in thousands):

	Three months ended		Nine months ended
	September 30, 2013		September 30, 2013
	(unaudited)		(unaudited)
Total revenues (net interest income plus noninterest income)	$	82,180	$	246,972
Net income	$	17,827	$	54,834

Acquisition-related expenses associated with the acquisition of StellarOne were $1.7 million and $19.5 million for the three and nine months ended September 30, 2014, and $473,000 and $1.4 million for the three and nine months ended September 30, 2013, respectively.  Such costs include legal and accounting fees, lease and contract termination expenses, system conversion, integrating operations, and employee severances, which have been expensed as incurred. 

A summary of acquisition-related expenses associated with the StellarOne acquisition included in the Consolidated Statements of Income is as follows (dollars in thousands): 

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Salaries and employee benefits	$	200	$	-	$	7,878	$	-
Professional services		122		473		3,717		1,393
Other costs of operations		1,373		-		7,929		-
Total	$	1,695	$	473	$	19,524	$	1,393

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ACCOUNTING POLICIES (Policy)

9 Months Ended

Sep. 30, 2014

ACCOUNTING POLICIES [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU 2014-01, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force).”  The amendments in this ASU permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  The amendments in this ASU should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this ASU are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.  The Company is currently assessing the impact that ASU 2014-01 will have on its consolidated financial statements.  

In January 2014, the FASB issued ASU 2014-04, “Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force).”  The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently assessing the impact that ASU 2014-04 will have on its consolidated financial statements.  

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” The amendments in this ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results and include disposals of a major geographic area, a major line of business, or a major equity method investment. The new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. Additionally, the new guidance requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.  The Company does not expect the adoption of ASU 2014-08 to have a material impact on its consolidated financial statements. 

In June 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU applies to any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” most industry-specific guidance, and some cost guidance included in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To be in alignment with the core principle, an entity must apply a five step process including: identification of the contract(s) with a customer, identification of performance obligations in the contract(s), determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue when (or as) the entity satisfies a performance obligation.  Additionally, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer have also been amended to be consistent with the guidance on recognition and measurement.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently assessing the impact that ASU 2014-09 will have on its consolidated financial statements.  

In June 2014, the FASB issued ASU No. 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.”  This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. The new guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement. The amendments in the ASU also require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. Additional disclosures will be required for the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in this ASU are effective for the first interim or annual period beginning after December 15, 2014; however, the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted.  The Company is currently assessing the impact that ASU 2014-11 will have on its consolidated financial statements.  

In June 2014, the FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The new guidance applies to reporting entities that grant employees share-based payments in which the terms of the award allow a performance target to be achieved after the requisite service period. The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  Existing guidance in “Compensation – Stock Compensation (Topic 718)”, should be applied to account for these types of awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted and reporting entities may choose to apply the amendments in the ASU either on a prospective or retrospective basis.  The Company is currently assessing the impact that ASU 2014-12 will have on its consolidated financial statements.   

In August 2014, the FASB issued ASU No. 2014-14, “Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.”  The amendments in this ASU apply to creditors that hold government-guaranteed mortgage loans and is intended to eliminate the diversity in practice related to the classification of these guaranteed loans upon foreclosure.  The new guidance stipulates that a mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure if (1) the loan has a government guarantee that is not separable from the loan prior to foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the other receivable should be measured on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Entities may adopt the amendments on a prospective basis or modified retrospective basis as of the beginning of the annual period of adoption; however, the entity must apply the same method of transition as elected under ASU 2014-04. Early adoption is permitted provided the entity has already adopted ASU 2014-04.  The Company is currently assessing the impact that ASU 2014-14 will have on its consolidated financial statements.  

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.”  This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures.  Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period.  If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice.  The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted.  The Company does not expect the adoption of ASU 2014-15 to have a material impact on its consolidated financial statements.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2014

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

10.FAIR VALUE MEASUREMENTS

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

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

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

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

Derivative instruments

As discussed in Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements,” the Company records derivative instruments at fair value on a recurring basis.  The Company utilizes derivative instruments as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities.  The Company has contracted with a third party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2.  Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions.  The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

During the ordinary course of business, the Company enters into interest rate lock commitments related to the origination of mortgage loans held for sale that are recorded at estimated fair value based on the value of the underlying loan, which in turn is based on quoted prices for similar loans in the secondary market.  However, this value is adjusted by a pull-through rate which considers the likelihood that the loan in a lock position will ultimately close.  The pull-through rate is derived from the Company’s internal data and is adjusted using significant management judgment.  The pull-through rate is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock.  As such, interest rate lock commitments are classified as Level 3.  The Company used a weighted average pull-through rate of approximately 90%.  As of September 30, 2014, this derivative is recorded as a component of “Loans held for sale, net” on the Consolidated Balance Sheet.

Securities available for sale

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

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

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

The Company uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations.  Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source.  No material differences were identified during the validation as of September 30, 2014 and December 31, 2013.  

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

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

	Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		33		-		33
Interest rate lock commitments		-		-		612		612
Securities available for sale:
U.S. government and agency securities		-		1,931		-		1,931
Obligations of states and political subdivisions		-		435,657		-		435,657
Corporate and other bonds		-		78,899		-		78,899
Mortgage-backed securities		-		569,328		-		569,328
Other securities		-		9,821		-		9,821
LIABILITIES
Interest rate swap	$	-	$	828	$	-	$	828
Cash flow hedges		-		5,049		-		5,049

		Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap	$	-	$	33	$	-	$	33
Securities available for sale:
U.S. government and agency securities		-		2,153		-		2,153
Obligations of states and political subdivisions		-		254,830		-		254,830
Corporate and other bonds		-		9,434		-		9,434
Mortgage-backed securities		-		407,362		-		407,362
Other securities		-		3,569		-		3,569
LIABILITIES
Interest rate swap	$	-	$	33	$	-	$	33
Cash flow hedges		-		3,562		-		3,562

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

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

Loans held for sale

Loans held for sale are carried at the lower of cost or market value.  These loans currently consist of residential loans originated for sale in the secondary market.  Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2).  As such, the Company records any fair value adjustments on a nonrecurring basis.  Nonrecurring fair value adjustments for the three and nine months ended September 30, 2014 totaled $139,000 and $225,000, respectively, and for the three and nine months ended September 30, 2013 were$177,000 and $363,000, respectively.  Gains and losses on the sale of loans are recorded within the mortgage segment and are reported on a separate line item in the Consolidated Statements of Income.

Impaired loans

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

Other real estate owned

OREO is evaluated for impairment at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense.  Fair values of OREO are carried at fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral.  When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. 

Total valuation expenses related to OREO properties for the three and nine months ended September 30, 2014 totaled $6.2 million and $7.3 million, respectively, and for both the three and nine months ended September 30, 2013 were$491,000. During the third quarter of 2014, the Company reevaluated its OREO sales strategies in light of limited progress in selling properties in inactive rural markets that have continued to struggle coming out of the economic downturn and for which transaction volume for comparable sales has been slow or nonexistent.  With the shift in strategy to more aggressively market this OREO, the Company obtained appraisals that reflect the newly determined highest and best use of the underlying assets.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2014 and December 31, 2013 (dollars in thousands):

		Fair Value Measurements at September 30, 2014 using
	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1			Level 2		Level 3		Balance
ASSETS
Loans held for sale	$		-	$	30,857	$	-	$	30,857
Impaired loans			-		-		26,910		26,910
Other real estate owned			-		-		37,754		37,754

		Fair Value Measurements at December 31, 2013 using
	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1			Level 2		Level 3		Balance
ASSETS
Loans held for sale	$		-	$	53,185	$	-	$	53,185
Impaired loans			-		-		7,985		7,985
Other real estate owned			-		-		34,116		34,116

The following table displays quantitative information about Level 3 Fair Value Measurements at September 30, 2014 (dollars in thousands):

	Fair Value Measurements at September 30, 2014
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	2	Market comparables	Discount applied to market comparables(1)	0%
Commercial Real Estate - Owner Occupied		5,628	Market comparables	Discount applied to market comparables (1)	25%
Commercial Real Estate - Non-Owner Occupied		9,731	Market comparables	Discount applied to market comparables (1)	16%
Raw Land and Lots		2,483	Market comparables	Discount applied to market comparables (1)	1%
Single Family Investment Real Estate		5,189	Market comparables	Discount applied to market comparables (1)	15%
Commercial and Industrial		1,102	Market comparables	Discount applied to market comparables (1)	27%
Other (2)		2,775	Market comparables	Discount applied to market comparables (1)	6%
Total Impaired Loans		26,910
Other real estate owned		37,754	Market comparables	Discount applied to market comparables (1)	32%
Total	$	64,664
(1)A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.
(2)The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Indirect Marine, HELOCs, and Other Consumer.

The following table displays quantitative information about Level 3 Fair Value Measurements at December 31, 2013 (dollars in thousands):

	Fair Value Measurements at December 31, 2013
	Fair Value		Valuation Technique(s)	Unobservable Inputs	Weighted Average
ASSETS
Commercial Construction	$	219	Market comparables	Discount applied to market comparables (1)	0%
Commercial Real Estate - Owner Occupied		2,043	Market comparables	Discount applied to market comparables (1)	17%
Raw Land and Lots		908	Market comparables	Discount applied to market comparables (1)	10%
Single Family Investment Real Estate		1,332	Market comparables	Discount applied to market comparables (1)	0%
Commercial and Industrial		1,719	Market comparables	Discount applied to market comparables (1)	28%
Other (2)		1,764	Market comparables	Discount applied to market comparables (1)	0%
Total Impaired Loans		7,985
Other real estate owned		34,116	Market comparables	Discount applied to market comparables (1)	33%
Total	$	42,101
(1)  A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.
(2)The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Consumer Construction, HELOCs, and Other Consumer.

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

Cash and cash equivalents

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

Loans

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

Deposits

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

Borrowings

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

Accrued interest

The carrying amounts of accrued interest approximate fair value.

Commitments to extend credit and standby letters of credit

The fair value of commitments 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 value of 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 at the reporting date.  At September 30, 2014 and December 31, 2013, the fair value of loan commitments and standby letters of credit was immaterial.

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2014 and December 31, 2013 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2014 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	148,692	$	148,692	$	-	$	-	$	148,692
Securities available for sale		1,095,636		-		1,095,636		-		1,095,636
Restricted stock		48,554		-		48,554		-		48,554
Interest rate lock commitments		612		-		-		612		612
Loans held for sale		30,857		-		30,857		-		30,857
Net loans		5,138,894		-		-		5,167,987		5,167,987
Interest rate swap		828		-		828		-		828
Cash flow hedges		33		-		33		-		33
Accrued interest receivable		21,260		-		21,260		-		21,260
LIABILITIES
Deposits	$	5,634,050	$	-	$	5,634,121	$	-	$	5,634,121
Borrowings		527,679		-		508,702		-		508,702
Accrued interest payable		1,963		-		1,963		-		1,963
Interest rate swap		828		-		828		-		828
Cash flow hedges		5,049		-		5,049		-		5,049

			Fair Value Measurements at December 31, 2013 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	73,023	$	73,023	$	-	$	-	$	73,023
Securities available for sale		677,348		-		677,348		-		677,348
Restricted stock		26,036		-		26,036		-		26,036
Loans held for sale		53,185		-		53,185		-		53,185
Net loans		3,009,233		-		-		3,035,504		3,035,504
Interest rate swap		33		-		33		-		33
Accrued interest receivable		15,000		-		15,000		-		15,000
LIABILITIES
Deposits	$	3,236,842	$	-	$	3,238,777	$	-	$	3,238,777
Borrowings		463,314		-		443,237		-		443,237
Accrued interest payable		902		-		902		-		902
Interest rate swap		33		-		33		-		33
Cash flow hedges		3,562		-		3,562		-		3,562

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

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SEGMENT REPORTING DISCLOSURES (Narrative) (Details)	4 Months Ended	9 Months Ended
	Sep. 30, 2014 store	Sep. 30, 2014 segment store
Segment Reporting Information [Line Items]
Number of reportable segments		2
Number of retail locations	131	131
Number of subsidiary bank		1
Mortgage banking segment interest - floor	0.00%
LIBOR [Member]
Segment Reporting Information [Line Items]
LIBOR rate plus 1.5%	1.50%

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BORROWINGS

9 Months Ended

Sep. 30, 2014

BORROWINGS [Abstract]

BORROWINGS

6.BORROWINGS

Short-term Borrowings

Total short-term borrowings consist of securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold.  Also included in total short-term borrowings are federal funds purchased, which are overnight borrowings from other financial institutions, and short-term FHLB advances.  Total short-term borrowings consist of the following as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,		December 31,
	2014		2013
Securities sold under agreements to repurchase	$	33,517	$	52,455
Other short-term borrowings		195,000		211,500
Total short-term borrowings	$	228,517	$	263,955
Maximum month-end outstanding balance	$	274,281	$	263,955
Average outstanding balance during the period		238,104		119,433
Average interest rate during the period		0.24%		0.30%
Average interest rate at end of period		0.20%		0.30%
Other short-term borrowings:
Federal funds purchased	$	-	$	31,500
FHLB	$	195,000	$	180,000

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $150.0 million and $93.5 million at September 30, 2014 and December 31, 2013, respectively.  The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants.  Additionally, the Bank had a collateral dependent line of credit with the FHLB of up to $1.5 billion and $805.2 million at September 30, 2014 and December 31, 2013, respectively. 

Long-term Borrowings

In connection with certain bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million.  In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $7.3 million at September 30, 2014.  The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes. 

	Principal		Investment(1)		Spread to 3-Month LIBOR	Rate	Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000	2.75%	2.99%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II		36,000,000		1,114,000	1.40%	1.64%	6/15/2036
VFG Limited Liability Trust I Indenture		20,000,000		619,000	2.73%	2.97%	3/18/2034
FNB Statutory Trust II Indenture		12,000,000		372,000	3.10%	3.34%	6/26/2033
Total	$	90,500,000	$	2,801,000
(1) reported as 'Other Assets' within the Consolidated Balance Sheets

As part of a prior acquisition, the Company assumed subordinated debt with terms of LIBOR plus 1.45%  and a maturity date of April 2016.  At September 30, 2014, the carrying value of the subordinated debt was $17.5 million, with a remaining fair value discount of $774,000.  

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances which resulted in reducing the Company’s FHLB borrowing costs.  In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s Consolidated Balance Sheet.  In accordance with ASC 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method.  The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s Consolidated Income Statement.  Amortization expense for the three and nine months ended September 30, 2014 and 2013 was $452,000 and $1.3million and $441,000 and $1.3 million, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB with a remaining fair value premium of $2.4 million at September 30, 2014.  As of September 30, 2014, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Advance Amount
Adjustable Rate Credit	0.44%	0.68%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		65,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		10,000
Adjustable Rate Credit	0.45%	0.69%	11/23/2022		10,000
Fixed Rate	-	3.62%	11/28/2017		10,000
Fixed Rate	-	3.44%	7/28/2015		10,000
Fixed Rate	-	3.75%	7/30/2018		5,000
Fixed Rate	-	3.97%	7/30/2018		5,000
Fixed Rate Hybrid	-	2.11%	10/5/2016		25,000
Fixed Rate Hybrid	-	0.91%	7/25/2016		15,000
				$	210,000

As of December 31, 2013, the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Advance Amount
Adjustable Rate Credit	0.44%	0.69%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		65,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		10,000
Adjustable Rate Credit	0.45%	0.70%	11/23/2022		10,000
				$	140,000

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $1.1 billion and $1.1 billion as of September 30, 2014 and December 31, 2013, respectively.

As of September 30, 2014, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value Premium (Discount)		Prepayment Penalty		Total Long-term Borrowings
Remaining three months in 2014	$	-	$	-	$	-	$	75	$	(455)	$	(380)
2015		-		-		10,000		175		(1,831)		8,344
2016		-		17,500		40,000		271		(1,882)		55,889
2017		-		-		10,000		170		(1,923)		8,247
2018		-		-		10,000		(143)		(1,970)		7,887
2019		-		-		-		(286)		(2,018)		(2,304)
Thereafter		93,301		-		140,000		(5,923)		(5,899)		221,479
Total long-term borrowings	$	93,301	$	17,500	$	210,000	$	(5,661)	$	(15,978)	$	299,162

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BORROWINGS (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended	4 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Acquisitions, Prior To 2006 [Member]	Sep. 30, 2014 LIBOR [Member]	Sep. 30, 2014 LIBOR [Member] Acquisitions, Prior To 2006 [Member]	Sep. 30, 2014 StellarOne Bank [Member]
Remaining available balance for the federal funds lines	$ 150,000,000		$ 150,000,000		$ 93,500,000
Maximum collateral dependent line of credit with the FHLB	1,500,000,000		1,500,000,000		805,200,000
Trust preferred capital notes principal balance						58,500,000			32,000,000
Remaining fair value discount on acquired trust preferred capital notes									7,300,000
Remaining fair value discount on subordinated debt						774,000
Subordinated debt interest rate basis						LIBOR plus 1.45%
Spread to 3-Month LIBOR							1.50%	1.45%
Subordinated debt maturity date						Apr. 01, 2016
Subordinated debt						17,500,000
Prepayment penalty			19,600,000
Loans from Other Federal Home Loan Banks									70,000,000
Remaining fair value premium on acquired FHLB advances									2,400,000
Prepayment penalty amortization expense	452,000	441,000	1,300,000	1,300,000
Carrying value of the loans and securities pledged as collateral for FHLB	$ 1,100,000,000		$ 1,100,000,000		$ 1,100,000,000

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LOANS AND ALLOWANCE FOR LOAN LOSSES

9 Months Ended

Sep. 30, 2014

LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

4.LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,		December 31,
	2014		2013
Commercial:
Commercial Construction	$	303,576	$	213,675
Commercial Real Estate - Owner Occupied		856,615		500,764
Commercial Real Estate - Non-Owner Occupied		1,423,093		755,905
Raw Land and Lots		210,557		187,529
Single Family Investment Real Estate		407,972		237,640
Commercial and Industrial		380,613		215,702
Other Commercial		79,356		52,490
Consumer:
Mortgage		489,076		237,414
Consumer Construction		76,991		48,984
Indirect Auto		194,633		174,843
Indirect Marine		40,347		38,633
HELOCs		496,145		281,579
Credit Card		23,736		23,211
Other Consumer		188,293		70,999
Total	$	5,171,003	$	3,039,368

The following table shows the aging of the Company’s loan portfolio, by class, at September 30, 2014 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing			PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-		$	-	$	4,455	$	672	$	298,449	$	303,576
Commercial Real Estate - Owner Occupied		4,401		1,153			784		27,710		676		821,891		856,615
Commercial Real Estate - Non-Owner Occupied		903		168			5,347		38,831		1,145		1,376,699		1,423,093
Raw Land and Lots		356		-			121		8,804		5,074		196,202		210,557
Single Family Investment Real Estate		1,208		976			100		19,337		4,202		382,149		407,972
Commercial and Industrial		1,346		257			473		4,642		3,005		370,890		380,613
Other Commercial		366		-			2,271		2,242		62		74,415		79,356
Consumer:
Mortgage		16,436		4,260			3,903		9,367		4,346		450,764		489,076
Consumer Construction		592		198			821		534		-		74,846		76,991
Indirect Auto		1,333		280			231		-		-		192,789		194,633
Indirect Marine		56		-			-		-		226		40,065		40,347
HELOCs		4,281		1,034			648		2,121		510		487,551		496,145
Credit Card		198		116			214		-		-		23,208		23,736
Other Consumer		1,534		838			1,205		1,700		361		182,655		188,293
Total	$	33,010	$	9,280		$	16,118	$	119,743	$	20,279	$	4,972,573	$	5,171,003

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2013 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-	$	-	$	-	$	1,596	$	212,079	$	213,675
Commercial Real Estate - Owner Occupied		514		-		258		-		2,037		497,955		500,764
Commercial Real Estate - Non-Owner Occupied		185		42		1,996		-		175		753,507		755,905
Raw Land and Lots		922		545		-		2,457		2,560		181,045		187,529
Single Family Investment Real Estate		1,783		277		563		275		1,689		233,053		237,640
Commercial and Industrial		348		152		220		-		3,848		211,134		215,702
Other Commercial		87		1		50		-		126		52,226		52,490
Consumer:
Mortgage		6,779		1,399		1,141		-		2,446		225,649		237,414
Consumer Construction		-		-		208		-		-		48,776		48,984
Indirect Auto		2,237		252		349		7		-		171,998		174,843
Indirect Marine		459		-		-		-		288		37,886		38,633
HELOCs		2,124		422		1,190		787		43		277,013		281,579
Credit Card		105		133		281		-		-		22,692		23,211
Other Consumer		888		124		490		96		227		69,174		70,999
Total	$	16,431	$	3,347	$	6,746	$	3,622	$	15,035	$	2,994,187	$	3,039,368

Nonaccrual loans totaled $20.3 million and $15.0 million at September 30, 2014 and December 31, 2013, respectively.  There were no nonaccrual loans excluded from impaired loan disclosures in 2014 or 2013.  Loans past due 90 days or more and accruing interest totaled $16.1 million and $6.7 million at September 30, 2014 and December 31, 2013, respectively.

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at September 30, 2014 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Construction	$	382	$	698	$	3,375	$	4,455
Commercial Real Estate - Owner Occupied		1,218		989		25,503		27,710
Commercial Real Estate - Non-Owner Occupied		2,531		1,776		34,524		38,831
Raw Land and Lots		663		-		8,141		8,804
Single Family Investment Real Estate		1,903		2,745		14,689		19,337
Commercial and Industrial		592		277		3,773		4,642
Other Commercial		514		791		937		2,242
Consumer:
Mortgage		3,342		2,884		3,141		9,367
Consumer Construction		-		534		-		534
HELOCs		399		625		1,097		2,121
Other Consumer		185		174		1,341		1,700
Total	$	11,729	$	11,493	$	96,521	$	119,743

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at December 31, 2013 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Raw Land and Lots	$	-	$	-	$	2,457	$	2,457
Single Family Investment Real Estate		-		-		275		275
Consumer:
Indirect Auto		-		-		7		7
HELOCs		-		31		756		787
Other Consumer		40		-		56		96
Total	$	40	$	31	$	3,551	$	3,622

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually.  The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by class at September 30, 2014 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	6,289	$	6,390	$	-	$	6,392	$	163
Commercial Real Estate - Owner Occupied		9,721		10,046		-		10,227		213
Commercial Real Estate - Non-Owner Occupied		22,966		23,066		-		23,158		839
Raw Land and Lots		45,652		48,404		-		57,544		1,889
Single Family Investment Real Estate		2,975		3,396		-		3,555		106
Commercial and Industrial		2,781		5,881		-		6,203		8
Other Commercial		962		966		-		990		43
Consumer:
Mortgage		2,459		2,490		-		2,502		19
Indirect Auto		-		11		-		13		-
Indirect Marine		90		191		-		191		-
HELOCs		678		822		-		980		8
Other Consumer		89		207		-		209		-
Total impaired loans without a specific allowance	$	94,662	$	101,870	$	-	$	111,964	$	3,288
Loans with a specific allowance
Commercial:
Commercial Construction	$	383	$	383	$	201	$	353	$	9
Commercial Real Estate - Owner Occupied		8,113		8,317		761		9,398		356
Commercial Real Estate - Non-Owner Occupied		10,701		10,685		506		11,037		406
Raw Land and Lots		3,759		3,789		487		4,426		71
Single Family Investment Real Estate		7,773		9,234		733		8,904		171
Commercial and Industrial		4,463		4,768		456		5,012		171
Other Commercial		432		449		39		480		22
Consumer:
Mortgage		3,984		4,064		740		4,095		50
Consumer Construction		376		376		34		377		14
Indirect Marine		332		536		14		540		12
HELOCs		580		635		13		649		14
Other Consumer		451		467		121		474		6
Total impaired loans with a specific allowance	$	41,347	$	43,703	$	4,105	$	45,745	$	1,302
Total impaired loans	$	136,009	$	145,573	$	4,105	$	157,709	$	4,590

The following table shows the Company’s impaired loans, by class, at December 31, 2013 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	10,520	$	10,523	$	-	$	9,073	$	282
Commercial Real Estate - Owner Occupied		4,281		4,648		-		4,845		206
Commercial Real Estate - Non-Owner Occupied		15,012		15,100		-		15,288		572
Raw Land and Lots		52,259		52,551		-		61,606		2,024
Single Family Investment Real Estate		5,520		6,021		-		6,396		261
Commercial and Industrial		4,035		6,835		-		7,083		195
Other Commercial		55		134		-		134		-
Consumer:
Mortgage		1,361		1,361		-		1,374		60
Indirect Auto		11		19		-		26		-
Indirect Marine		495		874		-		887		42
HELOCs		1,604		1,755		-		1,921		11
Other Consumer		162		211		-		214		-
Total impaired loans without a specific allowance	$	95,315	$	100,032	$	-	$	108,847	$	3,653
Loans with a specific allowance
Commercial:
Commercial Construction	$	357	$	692	$	135	$	1,136	$	9
Commercial Real Estate - Owner Occupied		3,797		3,937		284		4,000		181
Commercial Real Estate - Non-Owner Occupied		549		597		76		616		40
Raw Land and Lots		1,875		1,905		83		1,985		101
Single Family Investment Real Estate		3,389		3,676		335		3,894		114
Commercial and Industrial		2,722		3,086		204		3,214		84
Other Commercial		255		269		35		254		6
Consumer:
Mortgage		4,041		4,147		660		4,183		123
Other Consumer		321		343		151		350		10
Total impaired loans with a specific allowance	$	17,306	$	18,652	$	1,963	$	19,632	$	668
Total impaired loans	$	112,621	$	118,684	$	1,963	$	128,479	$	4,321

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties.  TDRs totaled $29.0 million and $41.8 million as of September 30, 2014 and December 31, 2013, respectively.  All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology.  For the quarter ended September 30, 2014, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification.

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30, 2014					December 31, 2013
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction	1	$	690	$	-	1	$	684	$	-
Commercial Real Estate - Owner Occupied	3		690		-	4		2,278		-
Commercial Real Estate - Non-Owner Occupied	4		3,918		-	6		3,771		-
Raw Land and Lots	11		16,084		-	15		20,741		-
Single Family Investment Real Estate	8		1,892		-	13		3,497		-
Commercial and Industrial	9		1,075		123	7		1,125		-
Other Commercial	1		207		-	-		-		-
Consumer:
Mortgage	8		1,587		-	10		2,318		-
Other Consumer	3		100		-	3		106		-
Total performing	48	$	26,243	$	123	59	$	34,520	$	-
Nonperforming
Commercial:
Commercial Construction	1	$	253	$	-	3	$	947	$	-
Commercial Real Estate - Owner Occupied	2		157		-	3		283		-
Raw Land and Lots	1		937		-	2		3,973		-
Single Family Investment Real Estate	-		-		-	1		50		-
Commercial and Industrial	5		486		-	8		1,195		-
Other Commercial	1		62		-	-		-		-
Consumer:
Mortgage	2		774		-	2		794		-
Other Consumer	1		59		-	1		62		-
Total nonperforming	13	$	2,728	$	-	20	$	7,304	$	-
Total performing and nonperforming	61	$	28,971	$	123	79	$	41,824	$	-

The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs.  During the three months ended September 30, 2014 and 2013, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default.  During the nine months ended September 30, 2014, the Company identified one loan, totaling approximately $24,000, that went into default that had been restructured in the twelve-month period prior to the time of default.  This loan was a mortgage loan which had a term modification at a market rate.  During the nine months ended September 30, 2013, the Company identified one loan, totaling approximately $43,000, that went into default that had been restructured in the twelve-month period prior to the time of default.  This loan was a raw land and lot loan which was modified to an interest only loan with a market rate of interest.

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2014 (dollars in thousands):

	Three months ended			Nine months ended
	September 30, 2014			September 30, 2014
	No. of Loans	Recorded investment at period end		No. of Loans	Recorded investment at period end
Term modification, at a market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied	1	$	989	1	$	989
Single Family Investment Real Estate	-		-	1		110
Commercial and Industrial	-		-	1		33
Other Commercial	-		-	2		269
Total loan term extended at a market rate	1	$	989	5	$	1,401
Total	1	$	989	5	$	1,401

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2013 (dollars in thousands):

	Three months ended			Nine months ended
	September 30, 2013			September 30, 2013
	No. of Loans	Recorded investment at period end		No. of Loans	Recorded investment at period end
Modified to interest only, at a market rate
Commercial:
Raw Land and Lots	-	$	-	1	$	43
Consumer:
Mortgage	1		139	2		738
Total interest only at market rate of interest	1	$	139	3	$	781
Term modification, at a market rate
Commercial:
Commercial Construction	-	$	-	2	$	545
Commercial Real Estate - Owner Occupied	1		167	2		1,093
Commercial Real Estate - Non-Owner Occupied	-		-	1		749
Raw Land and Lots	-		-	3		382
Single Family Investment Real Estate	-		-	7		2,499
Commercial and Industrial	-		-	4		613
Consumer:
Mortgage	-		-	2		686
Total loan term extended at a market rate	1	$	167	21	$	6,567
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied	-	$	-	1	$	149
Commercial and Industrial	-		-	1		8
Consumer:
Mortgage	-		-	1		154
Total loan term extended at a below market rate	-	$	-	3	$	311
Total	2	$	306	27	$	7,659

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2014.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	19,856	$	10,227	$	52	$	30,135
Recoveries credited to allowance		1,999		866		-		2,865
Loans charged off		(1,991)		(2,200)		-		(4,191)
Provision charged to operations		1,455		1,793		52		3,300
	$	21,319	$	10,686	$	104	$	32,109
Ending Balance, ALL:
Loans individually evaluated for impairment	$	3,183	$	922	$	-	$	4,105
Loans collectively evaluated for impairment		18,136		9,764		104		28,004
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	21,319	$	10,686	$	104	$	32,109
Ending Balance, Loans:
Loans individually evaluated for impairment	$	125,310	$	8,855	$	-	$	134,165
Loans collectively evaluated for impairment		3,430,451		1,486,644		-		4,917,095
Loans acquired with deteriorated credit quality		106,021		13,722		-		119,743
Total	$	3,661,782	$	1,509,221	$	-	$	5,171,003

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the year ended December 31, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821	$	10,107	$	(12)	$	34,916
Recoveries credited to allowance		1,496		1,285		-		2,781
Loans charged off		(8,534)		(5,084)		-		(13,618)
Provision charged to operations		2,073		3,919		64		6,056
Balance, end of period	$	19,856	$	10,227	$	52	$	30,135
Ending Balance, ALL:
Loans individually evaluated for impairment	$	1,152	$	811	$	-	$	1,963
Loans collectively evaluated for impairment		18,704		9,416		52		28,172
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	19,856	$	10,227	$	52	$	30,135
Ending Balance, Loans:
Loans individually evaluated for impairment	$	101,894	$	7,105	$	-	$	108,999
Loans collectively evaluated for impairment		2,059,079		867,668		-		2,926,747
Loans acquired with deteriorated credit quality		2,732		890		-		3,622
Total	$	2,163,705	$	875,663	$	-	$	3,039,368

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821	$	10,107	$	(12)	$	34,916
Recoveries credited to allowance		1,051		841		-		1,892
Loans charged off		(4,775)		(3,006)		-		(7,781)
Provision charged to operations		3,200		1,741		(91)		4,850
Balance, end of period	$	24,297	$	9,683	$	(103)	$	33,877
Ending Balance, ALL:
Loans individually evaluated for impairment	$	5,607	$	1,454	$	-	$	7,061
Loans collectively evaluated for impairment		18,690		8,229		(103)		26,816
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	24,297	$	9,683	$	(103)	$	33,877
Ending Balance, Loans:
Loans individually evaluated for impairment	$	107,566	$	7,730	$	-	$	115,296
Loans collectively evaluated for impairment		2,014,220		868,779		-		2,882,999
Loans acquired with deteriorated credit quality		3,031		920		-		3,951
Total	$	2,124,817	$	877,429	$	-	$	3,002,246

The Company uses the past due status and trends as the primary credit quality indicator for the consumer loan portfolio segment while a risk rating system is utilized for commercial loans.  Commercial loans are graded on a scale of 1 through 9.  A general description of the characteristics of the risk grades follows: 

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

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

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

· Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

· Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

· Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position;

· Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

· Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

· Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of September 30, 2014 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	20,850	$	250,160	$	13,214	$	11,597	$	3,300	$	-	$	299,121
Commercial Real Estate - Owner Occupied		174,759		609,379		16,544		18,255		9,968		-		828,905
Commercial Real Estate - Non-Owner Occupied		294,645		1,004,064		40,097		13,246		32,210		-		1,384,262
Raw Land and Lots		12,356		124,968		14,568		3,797		46,064		-		201,753
Single Family Investment Real Estate		62,225		299,539		9,874		7,175		9,822		-		388,635
Commercial and Industrial		131,104		225,795		6,811		5,194		7,067		-		375,971
Other Commercial		33,174		34,284		7,037		1,224		1,395		-		77,114
Total	$	729,113	$	2,548,189	$	108,145	$	60,488	$	109,826	$	-	$	3,555,761

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of December 31, 2013 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	24,399	$	148,251	$	20,370	$	13,772	$	6,883	$	-	$	213,675
Commercial Real Estate - Owner Occupied		149,632		324,394		10,017		10,926		5,795		-		500,764
Commercial Real Estate - Non-Owner Occupied		224,702		453,279		21,953		46,084		9,887		-		755,905
Raw Land and Lots		8,648		98,927		14,132		16,439		46,926		-		185,072
Single Family Investment Real Estate		38,327		168,564		12,302		11,522		6,650		-		237,365
Commercial and Industrial		68,748		123,585		8,254		8,752		3,822		2,541		215,702
Other Commercial		18,593		23,160		8,529		1,897		311		-		52,490
Total	$	533,049	$	1,340,160	$	95,557	$	109,392	$	80,274	$	2,541	$	2,160,973

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of September 30, 2014 (dollars in thousands):

	4		5		6		7		8		Total
Commercial Construction	$	-	$	-	$	3,375	$	609	$	471	$	4,455
Commercial Real Estate - Owner Occupied		530		5,938		7,375		13,867		-		27,710
Commercial Real Estate - Non-Owner Occupied		1,654		295		16,148		20,734		-		38,831
Raw Land and Lots		1,414		1,465		2,464		3,461		-		8,804
Single Family Investment Real Estate		2,757		873		6,689		9,018		-		19,337
Commercial and Industrial		478		-		1,193		2,931		40		4,642
Other Commercial		-		-		282		1,960		-		2,242
Total	$	6,833	$	8,571	$	37,526	$	52,580	$	511	$	106,021

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of December 31, 2013 (dollars in thousands):

	4		5		6		7		8		Total
Raw Land and Lots	$	-	$	653	$	-	$	1,804	$	-	$	2,457
Single Family Investment Real Estate		275		-		-		-		-		275
Total	$	275	$	653	$	-	$	1,804	$	-	$	2,732

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

The following shows changes in the Company’s PCI loan portfolio and accretable yield for loans accounted for under ASC 310-30 for the periods presented (dollars in thousands):

	For the Nine Months Ended				For the Nine Months Ended
	September 30, 2014				September 30, 2013
	Accretable Yield		Carrying Amount of Loans		Accretable Yield		Carrying Amount of Loans
Balance at beginning of period	$	2,980	$	3,622	$	3,147	$	4,565
Additions		34,653		145,454		-		-
Accretion		(5,681)		-		-		-
Charge-offs		(472)		-		(54)		(96)
Transfers to OREO		-		(1,006)		-		(201)
Payments received, net		-		(28,327)		-		(317)
Other, net		(1,678)		-		-		-
Balance at end of period	$	29,802	$	119,743	$	3,093	$	3,951

Loans in the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, totaled $1.9 billion at September 30, 2014 and $377.8 million at December 31, 2013; the remaining discount on these loans totaled $25.1 million and $3.3 million, respectively.

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INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

5.INTANGIBLE ASSETS

The Company’s intangible assets consist of core deposits and goodwill arising from previous acquisitions.  The Company has determined that core deposit intangibles have a finite life and amortizes them over their estimated useful life.Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years, using an accelerated method.  On January 1, 2014, the Company completed the acquisition of StellarOne and acquired intangible assets of $29.6 million and recorded $237.5 million of goodwill.  See Note 2 “Acquisitions” in the “Notes to Consolidated Financial Statements” for additional information.  

In accordance with ASC 350, Intangibles-Goodwill and Other, the Company reviews the carrying value of indefinite lived intangible assets at least annually or more frequently if certain impairment indicators exist.  The Company performed its annual impairment testing in the second quarter of 2014 and determined that there was no impairment to its goodwill or intangible assets. 

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

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2014
Amortizable core deposit intangibles	$	76,185	$	42,096	$	34,089
December 31, 2013
Amortizable core deposit intangibles	$	46,615	$	34,635	$	11,980
September 30, 2013
Amortizable core deposit intangibles	$	46,615	$	33,715	$	12,900

Amortization expense of core deposit intangibles for the three and nine months ended September 30, 2014 totaled $2.4 million and $7.5 million, respectively, for the three and nine months ended September 30, 2013 totaled $921,000 and $2.9 million, respectively, and for the year ended December 31, 2013 was $3.8 million.  As of September 30, 2014, the estimated remaining amortization expense of core deposit intangibles is as follows (dollars in thousands):

For the remaining three months of 2014	$	2,334
For the year ending December 31, 2015		8,444
For the year ending December 31, 2016		6,932
For the year ending December 31, 2017		5,590
For the year ending December 31, 2018		4,144
For the year ending December 31, 2019		3,093
Thereafter		3,552
Total estimated amortization expense	$	34,089

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2014

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

7.COMMITMENTS AND CONTINGENCIES

Litigation Matters

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

Litigation Relating to the StellarOne Acquisition

In a press release issued on June 10, 2013, the Company announced the signing of a definitive merger agreement for the acquisition of StellarOne.  The Company closed the acquisition of StellarOne on January 1, 2014.  On June 14, 2013, in response to the initial announcement of the definitive merger agreement, Jaclyn Crescente, individually and on behalf of all other StellarOne shareholders, filed a class action complaint against StellarOne, its current directors, StellarOne Bank, and the Company, in the U.S. District Court for the Western District of Virginia, Charlottesville Division (the “District Court”)  (Case No. 3:13-cv-00021-NKM).  The complaint alleged that the StellarOne directors breached their fiduciary duties by approving the merger with the Company and that the Company aided and abetted in such breaches of duty.  The complaint sought, among other things, money damages.  StellarOne and the Company believed that the claims were without merit; however, in order to eliminate the expense and uncertainties of further litigation, all the defendants entered into a memorandum of understanding with the plaintiffs in order to settle the litigation prior to the merger.  Under the terms of the memorandum of understanding, the plaintiffs agreed to settle the lawsuit and release the defendants from all claims, subject to approval by the District Court.  On May 19, 2014, the District Court approved the memorandum of understanding and the class action settlement in the case.

Financial Instruments with Off-Balance Sheet Risk

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

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments.  The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.  Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk.

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

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

UMG, a wholly owned subsidiary of the Bank, uses rate lock commitments during the origination process and for loans held for sale.  These commitments to sell loans are designed to mitigate UMG’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale.  The Company held approximately $3.1 million and $2.0 million in loans available for sale in which the related rate lock commitment had expired as of September 30, 2014 and December 31, 2013, respectively.  At September 30, 2014 and December 31, 2013, the reserves associated with these loans held for sale were $104,000 and $94,000, respectively, and are reflected on the balance sheet of the mortgage segment.

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

	September 30,		December 31,
	2014		2013
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,576,050	$	891,680
Standby letters of credit		139,459		48,107
Mortgage loan rate lock commitments		70,343		54,834
Total commitments with off-balance sheet risk	$	1,785,852	$	994,621
Commitments with balance sheet risk:
Loans held for sale	$	31,469	$	53,185
Total other commitments	$	1,817,321	$	1,047,806
(1) Includes unfunded overdraft protection.

The Company must maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act.  For the final weekly reporting period in the periods ended September 30, 2014 and December 31, 2013, the aggregate amount of daily average required reserves was approximately $50.2million and $16.0 million, respectively.

The Company has approximately $18.9 million in deposits in other financial institutions, of which $5.7 million serves as collateral for the trust swaps discussed in Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements.”  The Company had approximately $12.1 million in deposits in other financial institutions that were uninsured at September 30, 2014.  On an annual basis, the Company’s management evaluates the loss risk of its uninsured deposits in financial counter-parties.

For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts.  See Note 8 “Derivatives” in the “Notes to Consolidated Financial Statements” for additional information.

In the ordinary course of business, the Company records an indemnification reserve relating to mortgage loans previously sold based on historical statistics and loss rates; as of September 30, 2014 and December 31, 2013, the Company’s indemnification reserve was $840,000 and$627,000, respectively.

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BORROWINGS (Contractual Maturities of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Contractual maturities of long-term debt
Remaining three months in 2014	$ (380)
2015	8,344
2016	55,889
2017	8,247
2018	7,887
2019	(2,304)
Thereafter	221,479
Total long-term Borrowings	299,162	199,359
Trust Preferred Capital Notes [Member]
Contractual maturities of long-term debt
Thereafter	93,301
Total long-term Borrowings	93,301
Subordinated Debt [Member]
Contractual maturities of long-term debt
Remaining three months in 2014
2015
2016	17,500
2017
2018
2019
Thereafter
Total long-term Borrowings	17,500
Federal Home Loan Bank Advances [Member]
Contractual maturities of long-term debt
Remaining three months in 2014
2015	10,000
2016	40,000
2017	10,000
2018	10,000
2019
Thereafter	140,000
Total long-term Borrowings	210,000
Fair Value Premium (Discount) [Member]
Contractual maturities of long-term debt
Remaining three months in 2014	75
2015	175
2016	271
2017	170
2018	(143)
2019	(286)
Thereafter	(5,923)
Total long-term Borrowings	(5,661)
Prepayment Penalty [Member]
Contractual maturities of long-term debt
Remaining three months in 2014	(455)
2015	(1,831)
2016	(1,882)
2017	(1,923)
2018	(1,970)
2019	(2,018)
Thereafter	(5,899)
Total long-term Borrowings	$ (15,978)

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SEGMENT REPORTING DISCLOSURES (Information About Reportable Segments and Reconciliation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Information about reportable segments and reconciliation
Net interest income	$ 64,479	$ 37,858	$ 191,953	$ 113,014
Provision for loan losses	1,800	1,800	3,300	4,850	6,056
Net interest income after provision for loan losses	62,679	36,058	188,653	108,164
Noninterest income	16,742	9,216	47,645	30,349
Noninterest expenses	59,921	34,132	187,177	101,915
Income before income taxes	19,500	11,142	49,121	36,598
Income tax expense (benefit)	4,576	3,196	11,602	10,206
Net income	14,924	7,946	37,519	26,392
Total assets	7,194,334	4,047,108	7,194,334	4,047,108	4,176,571
Community Bank [Member]
Information about reportable segments and reconciliation
Net interest income	64,162	37,465	191,090	111,612
Provision for loan losses	1,800	1,800	3,300	4,850
Net interest income after provision for loan losses	62,362	35,665	187,790	106,762
Noninterest income	14,308	7,322	40,224	20,266
Noninterest expenses	56,188	29,904	174,780	89,242
Income before income taxes	20,482	13,083	53,234	37,786
Income tax expense (benefit)	4,930	3,902	13,106	10,633
Net income	15,552	9,181	40,128	27,153
Total assets	7,189,047	4,041,661	7,189,047	4,041,661
Mortgage [Member]
Information about reportable segments and reconciliation
Net interest income	317	393	863	1,402
Net interest income after provision for loan losses	317	393	863	1,402
Noninterest income	2,604	2,062	7,932	10,586
Noninterest expenses	3,903	4,396	12,908	13,176
Income before income taxes	(982)	(1,941)	(4,113)	(1,188)
Income tax expense (benefit)	(354)	(706)	(1,504)	(427)
Net income	(628)	(1,235)	(2,609)	(761)
Total assets	41,857	69,010	41,857	69,010
Eliminations [Member]
Information about reportable segments and reconciliation
Noninterest income	(170)	(168)	(511)	(503)
Noninterest expenses	(170)	(168)	(511)	(503)
Total assets	$ (36,570)	$ (63,563)	$ (36,570)	$ (63,563)

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COMMITMENTS AND CONTINGENCIES (Balances of Commitments and Contingencies) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 1,785,852		$ 994,621
Commitments with balance sheet risk:
Loans held for sale	31,469		53,185
Total other commitments	1,817,321		1,047,806
Commitments to Extend Credit [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	1,576,050	[1]	891,680	[1]
Standby Letters of Credit [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	139,459		48,107
Interest Rate Lock Commitments [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 70,343		$ 54,834

[1] Includes unfunded overdraft protection.

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BORROWINGS (Advances from the FHLB) (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended						4 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Adjustable Rate Credit One [Member]	Dec. 31, 2013 Adjustable Rate Credit One [Member]	Sep. 30, 2014 Adjustable Rate Credit Two [Member]	Dec. 31, 2013 Adjustable Rate Credit Two [Member]	Sep. 30, 2014 Adjustable Rate Credit Three [Member]	Dec. 31, 2013 Adjustable Rate Credit Three [Member]	Sep. 30, 2014 Adjustable Rate Credit Four [Member]	Dec. 31, 2013 Adjustable Rate Credit Four [Member]	Sep. 30, 2014 Fixed Rate One [Member]	Sep. 30, 2014 Fixed Rate Two [Member]	Sep. 30, 2014 Fixed Rate Three [Member]	Sep. 30, 2014 Fixed Rate Four [Member]	Sep. 30, 2014 Fixed Rate Hybrid One [Member]	Sep. 30, 2014 Fixed Rate Hybrid Two [Member]	Sep. 30, 2014 LIBOR [Member]	Sep. 30, 2014 LIBOR [Member] Adjustable Rate Credit One [Member]	Dec. 31, 2013 LIBOR [Member] Adjustable Rate Credit One [Member]	Sep. 30, 2014 LIBOR [Member] Adjustable Rate Credit Two [Member]	Dec. 31, 2013 LIBOR [Member] Adjustable Rate Credit Two [Member]	Sep. 30, 2014 LIBOR [Member] Adjustable Rate Credit Three [Member]	Dec. 31, 2013 LIBOR [Member] Adjustable Rate Credit Three [Member]	Sep. 30, 2014 LIBOR [Member] Adjustable Rate Credit Four [Member]	Dec. 31, 2013 LIBOR [Member] Adjustable Rate Credit Four [Member]
Advances from the FHLB
Spread to 3-Month LIBOR																	1.50%	0.44%	0.44%	0.45%	0.45%	0.45%	0.45%	0.45%	0.45%
Interest Rate			0.68%	0.69%	0.69%	0.70%	0.69%	0.70%	0.69%	0.70%	3.62%	3.44%	3.75%	3.97%	2.11%	0.91%
Maturity Date			Aug. 23, 2022	Aug. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 28, 2017	Jul. 28, 2015	Jul. 30, 2018	Jul. 30, 2018	Oct. 05, 2016	Jul. 25, 2016
Advance Amount	$ 210,000	$ 140,000	$ 55,000	$ 55,000	$ 65,000	$ 65,000	$ 10,000	$ 10,000	$ 10,000	$ 10,000	$ 10,000	$ 10,000	$ 5,000	$ 5,000	$ 25,000	$ 15,000

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE [Abstract]

Reconciliation of the Denominators of the Basic and Diluted EPS Computations

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2014 and 2013 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
For the Three Months ended September 30, 2014
Net income, basic	$	14,924	45,649	$	0.33
Add: potentially dilutive common shares - stock awards		-	89		-
Diluted	$	14,924	45,738	$	0.33
For the Three Months ended September 30, 2013
Net income, basic	$	7,946	24,895	$	0.32
Add: potentially dilutive common shares - stock awards		-	68		-
Diluted	$	7,946	24,963	$	0.32
For the Nine Months ended September 30, 2014
Net income, basic	$	37,519	46,269	$	0.81
Add: potentially dilutive common shares - stock awards		-	98		-
Diluted	$	37,519	46,367	$	0.81
For the Nine Months ended September 30, 2013
Net income, basic	$	26,392	24,987	$	1.06
Add: potentially dilutive common shares - stock awards		-	44		-
Diluted	$	26,392	25,031	$	1.06

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Modified Loans that Continue to Accrue Interest Under the Terms of Restructuring Agreement) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014 loan	Dec. 31, 2013 loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	61	79
Recorded Investment	$ 28,971	$ 41,824
Outstanding Commitment	123
Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	48	59
Recorded Investment	26,243	34,520
Outstanding Commitment	123
Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	13	20
Recorded Investment	2,728	7,304
Outstanding Commitment
Commercial Construction [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1	1
Recorded Investment	690	684
Outstanding Commitment
Commercial Construction [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1	3
Recorded Investment	253	947
Outstanding Commitment
Commercial Real Estate - Owner Occupied [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	3	4
Recorded Investment	690	2,278
Outstanding Commitment
Commercial Real Estate - Owner Occupied [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	2	3
Recorded Investment	157	283
Outstanding Commitment
Commercial Real Estate - Non-Owner Occupied [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	4	6
Recorded Investment	3,918	3,771
Outstanding Commitment
Raw Land and Lots [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	11	15
Recorded Investment	16,084	20,741
Outstanding Commitment
Raw Land and Lots [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1	2
Recorded Investment	937	3,973
Outstanding Commitment
Single Family Investment Real Estate [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	8	13
Recorded Investment	1,892	3,497
Outstanding Commitment
Single Family Investment Real Estate [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans		1
Recorded Investment		50
Outstanding Commitment
Commercial and Industrial [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	9	7
Recorded Investment	1,075	1,125
Outstanding Commitment	123
Commercial and Industrial [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	5	8
Recorded Investment	486	1,195
Outstanding Commitment
Other Commercial [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1
Recorded Investment	207
Outstanding Commitment
Other Commercial [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1
Recorded Investment	62
Outstanding Commitment
Mortgage [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	8	10
Recorded Investment	1,587	2,318
Outstanding Commitment
Mortgage [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	2	2
Recorded Investment	774	794
Outstanding Commitment
Other Consumer [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	3	3
Recorded Investment	100	106
Outstanding Commitment
Other Consumer [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans	1	1
Recorded Investment	59	62
Outstanding Commitment

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2014

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

12.EARNINGS PER SHARE

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

There were approximately 155,433 and 273,355 shares underlying anti-dilutive awards for the three months ended September 30, 2014 and 2013, respectively, and there were approximately 130,499 and 200,787 shares underlying anti-dilutive awards for the nine months ended September 30, 2014 and 2013, respectively. Anti-dilutive awards were excluded from the calculation of diluted EPS.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2014 and 2013 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
For the Three Months ended September 30, 2014
Net income, basic	$	14,924	45,649	$	0.33
Add: potentially dilutive common shares - stock awards		-	89		-
Diluted	$	14,924	45,738	$	0.33
For the Three Months ended September 30, 2013
Net income, basic	$	7,946	24,895	$	0.32
Add: potentially dilutive common shares - stock awards		-	68		-
Diluted	$	7,946	24,963	$	0.32
For the Nine Months ended September 30, 2014
Net income, basic	$	37,519	46,269	$	0.81
Add: potentially dilutive common shares - stock awards		-	98		-
Diluted	$	37,519	46,367	$	0.81
For the Nine Months ended September 30, 2013
Net income, basic	$	26,392	24,987	$	1.06
Add: potentially dilutive common shares - stock awards		-	44		-
Diluted	$	26,392	25,031	$	1.06

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

9 Months Ended

Sep. 30, 2014

LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract]

Loans Stated at Face Amount, Net of Unearned Income

Loans are stated at their face amount, net of unearned income, and consist of the following at September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30,		December 31,
	2014		2013
Commercial:
Commercial Construction	$	303,576	$	213,675
Commercial Real Estate - Owner Occupied		856,615		500,764
Commercial Real Estate - Non-Owner Occupied		1,423,093		755,905
Raw Land and Lots		210,557		187,529
Single Family Investment Real Estate		407,972		237,640
Commercial and Industrial		380,613		215,702
Other Commercial		79,356		52,490
Consumer:
Mortgage		489,076		237,414
Consumer Construction		76,991		48,984
Indirect Auto		194,633		174,843
Indirect Marine		40,347		38,633
HELOCs		496,145		281,579
Credit Card		23,736		23,211
Other Consumer		188,293		70,999
Total	$	5,171,003	$	3,039,368

Summary of Aging of the Loan Portfolio by Class

The following table shows the aging of the Company’s loan portfolio, by class, at September 30, 2014 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing			PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-		$	-	$	4,455	$	672	$	298,449	$	303,576
Commercial Real Estate - Owner Occupied		4,401		1,153			784		27,710		676		821,891		856,615
Commercial Real Estate - Non-Owner Occupied		903		168			5,347		38,831		1,145		1,376,699		1,423,093
Raw Land and Lots		356		-			121		8,804		5,074		196,202		210,557
Single Family Investment Real Estate		1,208		976			100		19,337		4,202		382,149		407,972
Commercial and Industrial		1,346		257			473		4,642		3,005		370,890		380,613
Other Commercial		366		-			2,271		2,242		62		74,415		79,356
Consumer:
Mortgage		16,436		4,260			3,903		9,367		4,346		450,764		489,076
Consumer Construction		592		198			821		534		-		74,846		76,991
Indirect Auto		1,333		280			231		-		-		192,789		194,633
Indirect Marine		56		-			-		-		226		40,065		40,347
HELOCs		4,281		1,034			648		2,121		510		487,551		496,145
Credit Card		198		116			214		-		-		23,208		23,736
Other Consumer		1,534		838			1,205		1,700		361		182,655		188,293
Total	$	33,010	$	9,280		$	16,118	$	119,743	$	20,279	$	4,972,573	$	5,171,003

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2013 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		PCI (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	-	$	-	$	-	$	-	$	1,596	$	212,079	$	213,675
Commercial Real Estate - Owner Occupied		514		-		258		-		2,037		497,955		500,764
Commercial Real Estate - Non-Owner Occupied		185		42		1,996		-		175		753,507		755,905
Raw Land and Lots		922		545		-		2,457		2,560		181,045		187,529
Single Family Investment Real Estate		1,783		277		563		275		1,689		233,053		237,640
Commercial and Industrial		348		152		220		-		3,848		211,134		215,702
Other Commercial		87		1		50		-		126		52,226		52,490
Consumer:
Mortgage		6,779		1,399		1,141		-		2,446		225,649		237,414
Consumer Construction		-		-		208		-		-		48,776		48,984
Indirect Auto		2,237		252		349		7		-		171,998		174,843
Indirect Marine		459		-		-		-		288		37,886		38,633
HELOCs		2,124		422		1,190		787		43		277,013		281,579
Credit Card		105		133		281		-		-		22,692		23,211
Other Consumer		888		124		490		96		227		69,174		70,999
Total	$	16,431	$	3,347	$	6,746	$	3,622	$	15,035	$	2,994,187	$	3,039,368

Purchased Impaired Commercial and Consumer Loan Portfolios by Class

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at September 30, 2014 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Construction	$	382	$	698	$	3,375	$	4,455
Commercial Real Estate - Owner Occupied		1,218		989		25,503		27,710
Commercial Real Estate - Non-Owner Occupied		2,531		1,776		34,524		38,831
Raw Land and Lots		663		-		8,141		8,804
Single Family Investment Real Estate		1,903		2,745		14,689		19,337
Commercial and Industrial		592		277		3,773		4,642
Other Commercial		514		791		937		2,242
Consumer:
Mortgage		3,342		2,884		3,141		9,367
Consumer Construction		-		534		-		534
HELOCs		399		625		1,097		2,121
Other Consumer		185		174		1,341		1,700
Total	$	11,729	$	11,493	$	96,521	$	119,743

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at December 31, 2013 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Raw Land and Lots	$	-	$	-	$	2,457	$	2,457
Single Family Investment Real Estate		-		-		275		275
Consumer:
Indirect Auto		-		-		7		7
HELOCs		-		31		756		787
Other Consumer		40		-		56		96
Total	$	40	$	31	$	3,551	$	3,622

Impaired Loans by Class

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually.  The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by class at September 30, 2014 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	6,289	$	6,390	$	-	$	6,392	$	163
Commercial Real Estate - Owner Occupied		9,721		10,046		-		10,227		213
Commercial Real Estate - Non-Owner Occupied		22,966		23,066		-		23,158		839
Raw Land and Lots		45,652		48,404		-		57,544		1,889
Single Family Investment Real Estate		2,975		3,396		-		3,555		106
Commercial and Industrial		2,781		5,881		-		6,203		8
Other Commercial		962		966		-		990		43
Consumer:
Mortgage		2,459		2,490		-		2,502		19
Indirect Auto		-		11		-		13		-
Indirect Marine		90		191		-		191		-
HELOCs		678		822		-		980		8
Other Consumer		89		207		-		209		-
Total impaired loans without a specific allowance	$	94,662	$	101,870	$	-	$	111,964	$	3,288
Loans with a specific allowance
Commercial:
Commercial Construction	$	383	$	383	$	201	$	353	$	9
Commercial Real Estate - Owner Occupied		8,113		8,317		761		9,398		356
Commercial Real Estate - Non-Owner Occupied		10,701		10,685		506		11,037		406
Raw Land and Lots		3,759		3,789		487		4,426		71
Single Family Investment Real Estate		7,773		9,234		733		8,904		171
Commercial and Industrial		4,463		4,768		456		5,012		171
Other Commercial		432		449		39		480		22
Consumer:
Mortgage		3,984		4,064		740		4,095		50
Consumer Construction		376		376		34		377		14
Indirect Marine		332		536		14		540		12
HELOCs		580		635		13		649		14
Other Consumer		451		467		121		474		6
Total impaired loans with a specific allowance	$	41,347	$	43,703	$	4,105	$	45,745	$	1,302
Total impaired loans	$	136,009	$	145,573	$	4,105	$	157,709	$	4,590

The following table shows the Company’s impaired loans, by class, at December 31, 2013 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	10,520	$	10,523	$	-	$	9,073	$	282
Commercial Real Estate - Owner Occupied		4,281		4,648		-		4,845		206
Commercial Real Estate - Non-Owner Occupied		15,012		15,100		-		15,288		572
Raw Land and Lots		52,259		52,551		-		61,606		2,024
Single Family Investment Real Estate		5,520		6,021		-		6,396		261
Commercial and Industrial		4,035		6,835		-		7,083		195
Other Commercial		55		134		-		134		-
Consumer:
Mortgage		1,361		1,361		-		1,374		60
Indirect Auto		11		19		-		26		-
Indirect Marine		495		874		-		887		42
HELOCs		1,604		1,755		-		1,921		11
Other Consumer		162		211		-		214		-
Total impaired loans without a specific allowance	$	95,315	$	100,032	$	-	$	108,847	$	3,653
Loans with a specific allowance
Commercial:
Commercial Construction	$	357	$	692	$	135	$	1,136	$	9
Commercial Real Estate - Owner Occupied		3,797		3,937		284		4,000		181
Commercial Real Estate - Non-Owner Occupied		549		597		76		616		40
Raw Land and Lots		1,875		1,905		83		1,985		101
Single Family Investment Real Estate		3,389		3,676		335		3,894		114
Commercial and Industrial		2,722		3,086		204		3,214		84
Other Commercial		255		269		35		254		6
Consumer:
Mortgage		4,041		4,147		660		4,183		123
Other Consumer		321		343		151		350		10
Total impaired loans with a specific allowance	$	17,306	$	18,652	$	1,963	$	19,632	$	668
Total impaired loans	$	112,621	$	118,684	$	1,963	$	128,479	$	4,321

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

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2014 and December 31, 2013 (dollars in thousands):

	September 30, 2014					December 31, 2013
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction	1	$	690	$	-	1	$	684	$	-
Commercial Real Estate - Owner Occupied	3		690		-	4		2,278		-
Commercial Real Estate - Non-Owner Occupied	4		3,918		-	6		3,771		-
Raw Land and Lots	11		16,084		-	15		20,741		-
Single Family Investment Real Estate	8		1,892		-	13		3,497		-
Commercial and Industrial	9		1,075		123	7		1,125		-
Other Commercial	1		207		-	-		-		-
Consumer:
Mortgage	8		1,587		-	10		2,318		-
Other Consumer	3		100		-	3		106		-
Total performing	48	$	26,243	$	123	59	$	34,520	$	-
Nonperforming
Commercial:
Commercial Construction	1	$	253	$	-	3	$	947	$	-
Commercial Real Estate - Owner Occupied	2		157		-	3		283		-
Raw Land and Lots	1		937		-	2		3,973		-
Single Family Investment Real Estate	-		-		-	1		50		-
Commercial and Industrial	5		486		-	8		1,195		-
Other Commercial	1		62		-	-		-		-
Consumer:
Mortgage	2		774		-	2		794		-
Other Consumer	1		59		-	1		62		-
Total nonperforming	13	$	2,728	$	-	20	$	7,304	$	-
Total performing and nonperforming	61	$	28,971	$	123	79	$	41,824	$	-

Schedule of TDR by Class and Modification Type

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2014 (dollars in thousands):

	Three months ended			Nine months ended
	September 30, 2014			September 30, 2014
	No. of Loans	Recorded investment at period end		No. of Loans	Recorded investment at period end
Term modification, at a market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied	1	$	989	1	$	989
Single Family Investment Real Estate	-		-	1		110
Commercial and Industrial	-		-	1		33
Other Commercial	-		-	2		269
Total loan term extended at a market rate	1	$	989	5	$	1,401
Total	1	$	989	5	$	1,401

The following table shows, by class and modification type, TDRs that occurred during the three and nine months ended September 30, 2013 (dollars in thousands):

	Three months ended			Nine months ended
	September 30, 2013			September 30, 2013
	No. of Loans	Recorded investment at period end		No. of Loans	Recorded investment at period end
Modified to interest only, at a market rate
Commercial:
Raw Land and Lots	-	$	-	1	$	43
Consumer:
Mortgage	1		139	2		738
Total interest only at market rate of interest	1	$	139	3	$	781
Term modification, at a market rate
Commercial:
Commercial Construction	-	$	-	2	$	545
Commercial Real Estate - Owner Occupied	1		167	2		1,093
Commercial Real Estate - Non-Owner Occupied	-		-	1		749
Raw Land and Lots	-		-	3		382
Single Family Investment Real Estate	-		-	7		2,499
Commercial and Industrial	-		-	4		613
Consumer:
Mortgage	-		-	2		686
Total loan term extended at a market rate	1	$	167	21	$	6,567
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied	-	$	-	1	$	149
Commercial and Industrial	-		-	1		8
Consumer:
Mortgage	-		-	1		154
Total loan term extended at a below market rate	-	$	-	3	$	311
Total	2	$	306	27	$	7,659

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

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2014.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	19,856	$	10,227	$	52	$	30,135
Recoveries credited to allowance		1,999		866		-		2,865
Loans charged off		(1,991)		(2,200)		-		(4,191)
Provision charged to operations		1,455		1,793		52		3,300
	$	21,319	$	10,686	$	104	$	32,109
Ending Balance, ALL:
Loans individually evaluated for impairment	$	3,183	$	922	$	-	$	4,105
Loans collectively evaluated for impairment		18,136		9,764		104		28,004
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	21,319	$	10,686	$	104	$	32,109
Ending Balance, Loans:
Loans individually evaluated for impairment	$	125,310	$	8,855	$	-	$	134,165
Loans collectively evaluated for impairment		3,430,451		1,486,644		-		4,917,095
Loans acquired with deteriorated credit quality		106,021		13,722		-		119,743
Total	$	3,661,782	$	1,509,221	$	-	$	5,171,003

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the year ended December 31, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821	$	10,107	$	(12)	$	34,916
Recoveries credited to allowance		1,496		1,285		-		2,781
Loans charged off		(8,534)		(5,084)		-		(13,618)
Provision charged to operations		2,073		3,919		64		6,056
Balance, end of period	$	19,856	$	10,227	$	52	$	30,135
Ending Balance, ALL:
Loans individually evaluated for impairment	$	1,152	$	811	$	-	$	1,963
Loans collectively evaluated for impairment		18,704		9,416		52		28,172
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	19,856	$	10,227	$	52	$	30,135
Ending Balance, Loans:
Loans individually evaluated for impairment	$	101,894	$	7,105	$	-	$	108,999
Loans collectively evaluated for impairment		2,059,079		867,668		-		2,926,747
Loans acquired with deteriorated credit quality		2,732		890		-		3,622
Total	$	2,163,705	$	875,663	$	-	$	3,039,368

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the nine months ended September 30, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Balance, beginning of the year	$	24,821	$	10,107	$	(12)	$	34,916
Recoveries credited to allowance		1,051		841		-		1,892
Loans charged off		(4,775)		(3,006)		-		(7,781)
Provision charged to operations		3,200		1,741		(91)		4,850
Balance, end of period	$	24,297	$	9,683	$	(103)	$	33,877
Ending Balance, ALL:
Loans individually evaluated for impairment	$	5,607	$	1,454	$	-	$	7,061
Loans collectively evaluated for impairment		18,690		8,229		(103)		26,816
Loans acquired with deteriorated credit quality		-		-		-		-
Total	$	24,297	$	9,683	$	(103)	$	33,877
Ending Balance, Loans:
Loans individually evaluated for impairment	$	107,566	$	7,730	$	-	$	115,296
Loans collectively evaluated for impairment		2,014,220		868,779		-		2,882,999
Loans acquired with deteriorated credit quality		3,031		920		-		3,951
Total	$	2,124,817	$	877,429	$	-	$	3,002,246

Loans Receivables Related Risk Rating Excluding Purchased Impaired Loans

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of September 30, 2014 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	20,850	$	250,160	$	13,214	$	11,597	$	3,300	$	-	$	299,121
Commercial Real Estate - Owner Occupied		174,759		609,379		16,544		18,255		9,968		-		828,905
Commercial Real Estate - Non-Owner Occupied		294,645		1,004,064		40,097		13,246		32,210		-		1,384,262
Raw Land and Lots		12,356		124,968		14,568		3,797		46,064		-		201,753
Single Family Investment Real Estate		62,225		299,539		9,874		7,175		9,822		-		388,635
Commercial and Industrial		131,104		225,795		6,811		5,194		7,067		-		375,971
Other Commercial		33,174		34,284		7,037		1,224		1,395		-		77,114
Total	$	729,113	$	2,548,189	$	108,145	$	60,488	$	109,826	$	-	$	3,555,761

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of December 31, 2013 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	24,399	$	148,251	$	20,370	$	13,772	$	6,883	$	-	$	213,675
Commercial Real Estate - Owner Occupied		149,632		324,394		10,017		10,926		5,795		-		500,764
Commercial Real Estate - Non-Owner Occupied		224,702		453,279		21,953		46,084		9,887		-		755,905
Raw Land and Lots		8,648		98,927		14,132		16,439		46,926		-		185,072
Single Family Investment Real Estate		38,327		168,564		12,302		11,522		6,650		-		237,365
Commercial and Industrial		68,748		123,585		8,254		8,752		3,822		2,541		215,702
Other Commercial		18,593		23,160		8,529		1,897		311		-		52,490
Total	$	533,049	$	1,340,160	$	95,557	$	109,392	$	80,274	$	2,541	$	2,160,973

Loans Receivables Related Risk Rating Including Purchased Impaired Loans

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of September 30, 2014 (dollars in thousands):

	4		5		6		7		8		Total
Commercial Construction	$	-	$	-	$	3,375	$	609	$	471	$	4,455
Commercial Real Estate - Owner Occupied		530		5,938		7,375		13,867		-		27,710
Commercial Real Estate - Non-Owner Occupied		1,654		295		16,148		20,734		-		38,831
Raw Land and Lots		1,414		1,465		2,464		3,461		-		8,804
Single Family Investment Real Estate		2,757		873		6,689		9,018		-		19,337
Commercial and Industrial		478		-		1,193		2,931		40		4,642
Other Commercial		-		-		282		1,960		-		2,242
Total	$	6,833	$	8,571	$	37,526	$	52,580	$	511	$	106,021

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of December 31, 2013 (dollars in thousands):

	4		5		6		7		8		Total
Raw Land and Lots	$	-	$	653	$	-	$	1,804	$	-	$	2,457
Single Family Investment Real Estate		275		-		-		-		-		275
Total	$	275	$	653	$	-	$	1,804	$	-	$	2,732

Schedule of Acquired Loan Portfolio and Accretable Yield

The following shows changes in the Company’s PCI loan portfolio and accretable yield for loans accounted for under ASC 310-30 for the periods presented (dollars in thousands):

	For the Nine Months Ended				For the Nine Months Ended
	September 30, 2014				September 30, 2013
	Accretable Yield		Carrying Amount of Loans		Accretable Yield		Carrying Amount of Loans
Balance at beginning of period	$	2,980	$	3,622	$	3,147	$	4,565
Additions		34,653		145,454		-		-
Accretion		(5,681)		-		-		-
Charge-offs		(472)		-		(54)		(96)
Transfers to OREO		-		(1,006)		-		(201)
Payments received, net		-		(28,327)		-		(317)
Other, net		(1,678)		-		-		-
Balance at end of period	$	29,802	$	119,743	$	3,093	$	3,951

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Purchased Impaired Commercial and Consumer Loan Portfolios by Class) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	$ 4,972,573	$ 2,994,187
Fair value of loans acquired with a deterioration of credit quality	119,743	3,622	3,951
Commercial Construction [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	298,449	212,079
Fair value of loans acquired with a deterioration of credit quality	4,455
Commercial Real Estate - Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	821,891	497,955
Fair value of loans acquired with a deterioration of credit quality	27,710
Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	1,376,699	753,507
Fair value of loans acquired with a deterioration of credit quality	38,831
Raw Land and Lots [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	196,202	181,045
Fair value of loans acquired with a deterioration of credit quality	8,804	2,457
Single Family Investment Real Estate [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	382,149	233,053
Fair value of loans acquired with a deterioration of credit quality	19,337	275
Commercial and Industrial [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	370,890	211,134
Fair value of loans acquired with a deterioration of credit quality	4,642
Other Commercial [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	74,415	52,226
Fair value of loans acquired with a deterioration of credit quality	2,242
Indirect Auto [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	192,789	171,998
Fair value of loans acquired with a deterioration of credit quality		7
Mortgage [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	450,764	225,649
Fair value of loans acquired with a deterioration of credit quality	9,367
Consumer Construction [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	74,846	48,776
Fair value of loans acquired with a deterioration of credit quality	534
HELOCs [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	487,551	277,013
Fair value of loans acquired with a deterioration of credit quality	2,121	787
Other Consumer [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
Current	182,655	69,174
Fair value of loans acquired with a deterioration of credit quality	1,700	96
Purchased Impaired [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	11,729	40
Greater than 90 Days	11,493	31
Current	96,521	3,551
Fair value of loans acquired with a deterioration of credit quality	119,743	3,622	3,951	4,565
Purchased Impaired [Member] | Commercial Construction [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	382
Greater than 90 Days	698
Current	3,375
Fair value of loans acquired with a deterioration of credit quality	4,455
Purchased Impaired [Member] | Commercial Real Estate - Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	1,218
Greater than 90 Days	989
Current	25,503
Fair value of loans acquired with a deterioration of credit quality	27,710
Purchased Impaired [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	2,531
Greater than 90 Days	1,776
Current	34,524
Fair value of loans acquired with a deterioration of credit quality	38,831
Purchased Impaired [Member] | Raw Land and Lots [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	663
Greater than 90 Days
Current	8,141	2,457
Fair value of loans acquired with a deterioration of credit quality	8,804	2,457
Purchased Impaired [Member] | Single Family Investment Real Estate [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	1,903
Greater than 90 Days	2,745
Current	14,689	275
Fair value of loans acquired with a deterioration of credit quality	19,337	275
Purchased Impaired [Member] | Commercial and Industrial [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	592
Greater than 90 Days	277
Current	3,773
Fair value of loans acquired with a deterioration of credit quality	4,642
Purchased Impaired [Member] | Other Commercial [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	514
Greater than 90 Days	791
Current	937
Fair value of loans acquired with a deterioration of credit quality	2,242
Purchased Impaired [Member] | Indirect Auto [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days
Current		7
Fair value of loans acquired with a deterioration of credit quality		7
Purchased Impaired [Member] | Mortgage [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	3,342
Greater than 90 Days	2,884
Current	3,141
Fair value of loans acquired with a deterioration of credit quality	9,367
Purchased Impaired [Member] | Consumer Construction [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days	534
Fair value of loans acquired with a deterioration of credit quality	534
Purchased Impaired [Member] | HELOCs [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	399
Greater than 90 Days	625	31
Current	1,097	756
Fair value of loans acquired with a deterioration of credit quality	2,121	787
Purchased Impaired [Member] | Other Consumer [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	185	40
Greater than 90 Days	174
Current	1,341	56
Fair value of loans acquired with a deterioration of credit quality	$ 1,700	$ 96

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SECURITIES (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended	12 Months Ended
	Jun. 30, 2014	Sep. 30, 2011	Sep. 30, 2014 item	Dec. 31, 2013 item
SECURITIES [Abstract]
Federal Home Loan Bank requires Bank to maintain percentage of stock equal to outstanding borrowings			4.50%
Percentage of Federal Reserve Bank of Richmond reserve			6.00%
Restricted equity securities consist of Federal Reserve Bank stock			$ 23,800,000	$ 6,700,000
Federal Home Loan Bank Stock			24,700,000	19,300,000
Securities in a continuous loss position, more than 12 months, unrealized losses			2,665,000	1,437,000
Individual securities that had been in a continuous loss position for more than 12 months, amount			103,466,000	34,860,000
Individual securities that had been in a continuous loss position			75	23
Securities pledged to secure public deposits, repurchase agreements and other purposes-Amortized cost			371,100,000	188,200,000
Credit-related OTTI		400,000	0
OTTI recovery amount	$ 400,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 14,924	$ 7,946	$ 37,519	$ 26,392
Other comprehensive income (loss):
Change in fair value of cash flow hedges	(228)	293	(431)	1,049
Reclassification adjustment for losses included in net income (net of tax, $89 and $87 for the three months and $231 and $291 for the nine months ended September 30, 2014 and 2013)	164	161	428	540
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period (net of tax, $968 and $212 for the three months and $7,992 and $6,580 for the nine months ended September 30, 2014 and 2013)	1,798	(393)	14,843	(12,220)
Reclassification adjustment for (gains) losses included in net income (net of tax, $348 and $2 for the three months and $367 and $17 for the nine months ended September 30, 2014 and 2013)	(647)	(3)	(682)	(30)
Other comprehensive income (loss)	1,087	58	14,158	(10,661)
Comprehensive income	$ 16,011	$ 8,004	$ 51,677	$ 15,731

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ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

ACCOUNTING POLICIES [Abstract]

ACCOUNTING POLICIES

1. ACCOUNTING POLICIES

Effective April 25, 2014, the Company changed its corporate name from Union First Market Bankshares Corporation to Union Bankshares Corporation. The name change was approved at the Company’s annual meeting of shareholders held April 22, 2014.  The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.  Significant inter-company accounts and transactions have been eliminated in consolidation.

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

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2013 Annual Report on Form 10-K.  If needed, certain previously reported amounts have been reclassified to conform to current period presentation. 

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU 2014-01, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force).”  The amendments in this ASU permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  The amendments in this ASU should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this ASU are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.  The Company is currently assessing the impact that ASU 2014-01 will have on its consolidated financial statements.  

In January 2014, the FASB issued ASU 2014-04, “Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force).”  The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently assessing the impact that ASU 2014-04 will have on its consolidated financial statements.  

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” The amendments in this ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results and include disposals of a major geographic area, a major line of business, or a major equity method investment. The new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. Additionally, the new guidance requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.  The Company does not expect the adoption of ASU 2014-08 to have a material impact on its consolidated financial statements. 

In June 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU applies to any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” most industry-specific guidance, and some cost guidance included in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To be in alignment with the core principle, an entity must apply a five step process including: identification of the contract(s) with a customer, identification of performance obligations in the contract(s), determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue when (or as) the entity satisfies a performance obligation.  Additionally, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer have also been amended to be consistent with the guidance on recognition and measurement.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently assessing the impact that ASU 2014-09 will have on its consolidated financial statements.  

In June 2014, the FASB issued ASU No. 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.”  This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. The new guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement. The amendments in the ASU also require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. Additional disclosures will be required for the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in this ASU are effective for the first interim or annual period beginning after December 15, 2014; however, the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted.  The Company is currently assessing the impact that ASU 2014-11 will have on its consolidated financial statements.  

In June 2014, the FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The new guidance applies to reporting entities that grant employees share-based payments in which the terms of the award allow a performance target to be achieved after the requisite service period. The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  Existing guidance in “Compensation – Stock Compensation (Topic 718)”, should be applied to account for these types of awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted and reporting entities may choose to apply the amendments in the ASU either on a prospective or retrospective basis.  The Company is currently assessing the impact that ASU 2014-12 will have on its consolidated financial statements.   

In August 2014, the FASB issued ASU No. 2014-14, “Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.”  The amendments in this ASU apply to creditors that hold government-guaranteed mortgage loans and is intended to eliminate the diversity in practice related to the classification of these guaranteed loans upon foreclosure.  The new guidance stipulates that a mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure if (1) the loan has a government guarantee that is not separable from the loan prior to foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the other receivable should be measured on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Entities may adopt the amendments on a prospective basis or modified retrospective basis as of the beginning of the annual period of adoption; however, the entity must apply the same method of transition as elected under ASU 2014-04. Early adoption is permitted provided the entity has already adopted ASU 2014-04.  The Company is currently assessing the impact that ASU 2014-14 will have on its consolidated financial statements.  

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.”  This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures.  Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period.  If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice.  The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted.  The Company does not expect the adoption of ASU 2014-15 to have a material impact on its consolidated financial statements.

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INTANGIBLE ASSETS (Information Concerning Intangible Assets with Finite Life) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Information concerning intangible assets with finite life
Gross Carrying Value	$ 76,185	$ 46,615	$ 46,615
Accumulated Amortization	42,096	34,635	33,715
Net Carrying Value/Total estimated amortization expense	$ 34,089	$ 11,980	$ 12,900

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EARNINGS PER SHARE (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
EARNINGS PER SHARE [Abstract]
Anti-dilutive stock awards	155,433	273,355	130,499	200,787

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Narrative) (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]
OTTI recovery amount		$ 400,000
Reclassifications of unrealized gains (losses) on AFS	995,000		5,000	1,449,000	47,000
Net gain (loss) on sale of securities, excluding OTTI recovery	995,000			1,000,000
Tax expense (benefit) related to (gains) losses on the sale of securities	348,000		2,000	367,000	17,000
Reclassification of unrealized gains (losses) on cash flow hedges	(253,000)		(248,000)	(659,000)	(831,000)
Tax expense (benefit) related to (gains) losses on the cash flow hedges	$ (89,000)		$ (87,000)	$ (231,000)	$ (291,000)

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2014

INTANGIBLE ASSETS [Abstract]

Information Concerning Intangible Assets with Finite Life

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

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2014
Amortizable core deposit intangibles	$	76,185	$	42,096	$	34,089
December 31, 2013
Amortizable core deposit intangibles	$	46,615	$	34,635	$	11,980
September 30, 2013
Amortizable core deposit intangibles	$	46,615	$	33,715	$	12,900

Estimated Remaining Amortization Expense of Core Deposit Intangibles

As of September 30, 2014, the estimated remaining amortization expense of core deposit intangibles is as follows (dollars in thousands):

For the remaining three months of 2014	$	2,334
For the year ending December 31, 2015		8,444
For the year ending December 31, 2016		6,932
For the year ending December 31, 2017		5,590
For the year ending December 31, 2018		4,144
For the year ending December 31, 2019		3,093
Thereafter		3,552
Total estimated amortization expense	$	34,089

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FAIR VALUE MEASUREMENTS (Summary of Quantitative Information About Level 3 Fair Value Measurements) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2014		Dec. 31, 2013
Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total	$ 64,664		$ 42,101
Other Real Estate Owned [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Other Real Estate Owned [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	37,754		34,116
Discount applied to Market Comparables [Member] | Other Real Estate Owned [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	32.00%		33.00%
Impaired loans [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	26,910		7,985
Impaired loans [Member] | Commercial Construction [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Commercial Construction [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	2		219
Impaired loans [Member] | Commercial Real Estate - Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Commercial Real Estate - Owner Occupied [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	5,628		2,043
Impaired loans [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Commercial Real Estate - Non-Owner Occupied [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	9,731
Impaired loans [Member] | Raw Land and Lots [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Raw Land and Lots [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	2,483		908
Impaired loans [Member] | Single Family Investment Real Estate [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Single Family Investment Real Estate [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	5,189		1,332
Impaired loans [Member] | Commercial and Industrial [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1]	Discount applied to market comparables (1)	[1]
Impaired loans [Member] | Commercial and Industrial [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	1,102		1,719
Impaired loans [Member] | Other Consumer [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Level 3 fair value unobservable inputs	Discount applied to market comparables (1)	[1],[2]	Discount applied to market comparables (1)	[1],[3]
Impaired loans [Member] | Other Consumer [Member] | Market comparables [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	$ 2,775	[2]	$ 1,764	[3]
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Commercial Construction [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	0.00%		0.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Commercial Real Estate - Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	25.00%		17.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	16.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Raw Land and Lots [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	1.00%		10.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Single Family Investment Real Estate [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	15.00%		0.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Commercial and Industrial [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	27.00%		28.00%
Impaired loans [Member] | Discount applied to Market Comparables [Member] | Other Consumer [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	6.00%	[2]	0.00%	[3]

[1] A discount percentage (in addition to expected selling costs) is applied based on age of independent appraisals, current market conditions, and experience within the local market.

[2] The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Consumer Construction, HELOCs, and Other Consumer.

[3] The "Other" category of the impaired loans section from the table above consists of Other Commercial, Mortgage, Indirect Marine, HELOCs, and Other Consumer.

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ACQUISITIONS (Acquired Impaired Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jan. 01, 2014 StellarOne Bank [Member]
Business Acquisition [Line Items]
Contractually required principal and interest payments				$ 214,803
Nonaccretable difference				(34,696)
Cash flows expected to be collected				180,107
Accretable difference				(34,653)
Fair value of loans acquired with a deterioration of credit quality	$ 119,743	$ 3,622	$ 3,951	$ 145,454

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2014

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

11.STOCK-BASED COMPENSATION

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) provides for the granting of stock-based awards in the form of incentive stock options (“incentive stock options,” intended to comply with the requirements of Section 422 of the Internal Revenue Code of 1986), non-statutory stock options, and nonvested stock to attract, retain, and reward key employees of the Company and its subsidiaries.  The Company issues new shares to satisfy stock-based awards.  Under the plan, the option price cannot be less than the fair market value of the stock on the grant date, and the stock option’s maximum term is ten years from the date of grant and vests in equal annual installments of 20% over a five year vesting schedule.  The 2011 Plan became effective on January 1, 2011 after its approval by shareholders at the annual meeting of shareholders held on April 26, 2011.  The following table summarizes the shares available in the 2011 Plan as of September 30, 2014:  

	2011 Plan
Beginning Authorization	1,000,000
Granted	(516,727)
Expired, forfeited, or cancelled	50,260
Remaining available for grant	533,533

In connection with the acquisition of StellarOne, each outstanding option to acquire StellarOne common stock, whether or not exercisable, was assumed by the Company and converted into an option to acquire the same number of whole shares of the Company’s common stock, subject to the exchange ratio of 0.9739.  The exercise price per share of each new option was equal to the price under the original StellarOne option divided by the exchange ratio of 0.9739.  Each converted StellarOne stock option has the same terms and conditions that were in effect prior to the completion of the acquisition.  Restricted StellarOne stock awards, which were unvested and outstanding prior to the merger, were accelerated and converted into restricted stock awards of the Company on the same basis as stock options.  Restricted common stock of the Company was issued from StellarOne stock incentive plans assumed in the acquisition, and subsequent awards from the Company will be issued from the 2011 Plan.

For the three months ended September 30, 2014 and 2013, the Company recognized stock-based compensation expense (included in salaries and benefits expense) of approximately $308,000 and $297,000 ($227,000 and $236,000 net of tax), respectively, and for the nine months ended September 30, 2014 and 2013, recognized $862,000 and $622,000  ($641,000 and $505,000 net of tax), respectively.  Stock-based compensation expense represents approximately $0.01per common share for both the three months ended September 30, 2014 and 2013, and $0.02 per common share for both the nine months ended September 30, 2014 and 2013. 

Stock Options

The following table summarizes the stock option activity for the nine months ended September 30, 2014:

	Number of Stock Options	Weighted Average Exercise Price
Options outstanding, December 31, 2013	402,946	$	16.48
Options converted upon StellarOne acquisition	124,217		20.88
Exercised	(67,057)		16.89
Expired	(60,579)		22.91
Options outstanding, September 30, 2014	399,527		16.81
Options exercisable, September 30, 2014	273,971		18.16

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model.  The model uses variables which include the historical dividend yield of the Company’s common stock, the average contractual life and vesting schedule of the option, the historic volatility of the Company’s common stock price, and the risk-free interest rate at the time the option was granted.  Other than options that were assumed and converted upon completion of the StellarOne merger, the Company has not granted incentive compensation in the form of options since February 2012.

The following table summarizes information concerning stock options issued to the Company’s employees that are vested or are expected to vest and stock options exercisable as of September 30, 2014:

	Stock Options Vested or Expected to Vest		Exercisable
Stock options (number of shares)		398,809		273,971
Weighted average remaining contractual life in years		5.22		4.48
Weighted average exercise price on shares above water	$	14.38	$	14.68
Aggregate intrinsic value	$	2,815,845	$	1,670,373

Nonvested Stock

The 2011 Plan permits the granting of nonvested stock but limits such grants to one-third of the aggregate number of total awards granted.  This equity component of compensation is divided between restricted (time-based) stock grants and performance-based stock grants.  Generally, the restricted stock vests 50% on each of the third and fourth anniversaries from the grant date.  The performance-based stock is subject to vesting based on achieving certain performance metrics; the grant of performance-based stock is subject to approval by the Company’s Compensation Committee in its sole discretion.  The value of the nonvested stock awards is calculated by multiplying the fair market value of the Company’s common stock on the grant date by the number of shares awarded.  Employees have the right to vote the shares and to receive cash or stock dividends (restricted stock), if any, except for the nonvested stock under the performance-based component (performance stock).

The following table summarizes the restricted stock activity for the nine months ended September 30, 2014:

	Number of Shares of Restricted Stock	Weighted Average Grant-Date Fair Value
Balance, December 31, 2013	260,763	$	16.47
Granted	134,431		24.29
Net settle for taxes	(63,916)		24.83
Vested	(14,707)		14.64
Forfeited	(25,377)		20.94
Balance, September 30, 2014	291,194		20.04

The estimated unamortized compensation expense, net of estimated forfeitures, related to nonvested stock and stock options issued and outstanding as of September 30, 2014 that will be recognized in future periods is as follows (dollars in thousands):

	Stock Options		Restricted Stock		Total
For the remaining three months of 2014	$	79	$	480	$	559
For year ending December 31, 2015		233		1,469		1,702
For year ending December 31, 2016		130		1,155		1,285
For year ending December 31, 2017		15		443		458
For year ending December 31, 2018		-		56		56
Total	$	457	$	3,603	$	4,060