BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income - Unaudited

(dollars in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Net income
$ 9,374 $ 7,496 $ 26,628 $ 23,109

Other comprehensive (loss) income:

Net change in unrealized gains (losses) on investment securities available for sale:

Net unrealized gains (losses) arising during the period, net of tax expense (benefit) of $(212), $503, $1,336 and $803, respectively
(394 ) 935 2,459 1,489
Less: reclassification adjustment for net losses (gains) on sales realized in net income, net of tax (benefit) expense of $(10), $21, $(30) and $306, respectively
18 (39 ) 56 (567 )
Unrealized investment gains (losses), net of tax expense (benefit) of $(202), $482, $1,366 and $497, respectively
(376 ) 896 2,515 922
Net change in fair value of derivative used for cash flow hedge:

Net unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0, $(188), $0 and $(216), respectively
- (349 ) - (400 )
Net change in unfunded pension liability:

Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation,net of tax expense of $9, $26, $13 and $76, respectively
16 47 25 142
Total other comprehensive (loss)income
(360 ) 594 2,540 664

Total comprehensive income
$ 9,014 $ 8,090 $ 29,168 $ 23,773

(dollars in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016

Net income	$	10,739		$	9,374		$	29,216		$	26,628

Other comprehensive income (loss):
Net change in unrealized gains (losses) on investment securities available for sale:
Net unrealized gains arising during the period, net of tax expense of $105, $(212),$535, and $1,336, respectively		196			(394	)		995			2,459
Less: reclassification adjustment for net losses (gains) on sales realized in net income, net of tax (benefit) expense of $25, $(10), $25,and $(30), respectively		(47	)		18			(48	)		56
Unrealized investment gains, net of tax expense of $80, $(202), $510 and $1,366, respectively		149			(376	)		947			2,515
Net change in unfunded pension liability:
Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax expense (benefit) of $9, $9, $34 and $13, respectively		15			16			62			25
Total other comprehensive income		164			(360	)		1,009			2,540

Total comprehensive income	$	10,903		$	9,014		$	30,225		$	29,168

The accompanying notes are an integral part of the unaudited consolidated financial statements.

Page 5

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows - Unaudited

(dollars in thousands)	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2017			2016
Operating activities:
Net Income	$	26,628		$	23,109		$	29,216		$	26,628
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses		3,267			2,619			1,541			3,267
Depreciation of fixed assets		4,234			3,510			4,181			4,234
Net amortization of investment premiums and discounts		2,415			2,486			2,189			2,415
Net loss (gain) on sale of investment securities available for sale		86			(873	)
Net (gain) loss on sale of investment securities available for sale								(73	)		86
Net gain on sale of loans		(2,641	)		(2,271	)		(1,948	)		(2,440	)
Stock based compensation cost		1,233			1,047			1,476			1,233
Amortization and net impairment of mortgage servicing rights		1,236			531			619			1,236
Net accretion of fair value adjustments		(2,966	)		(4,029	)		(2,038	)		(2,966	)
Amortization of intangible assets		2,668			2,890			2,057			2,668
Impairment of other real estate owned ("OREO")		-			90
Net loss (gain) on sale of OREO		76			(90	)
Impairment of other real estate owned ("OREO") and other repossessed assets								200			-
Net loss on sale of OREO								12			76
Net increase in cash surrender value of bank owned life insurance ("BOLI")		(684	)		(568	)		(602	)		(684	)
Other, net		(545	)		1,770			2,130			(460	)
Loans originated for resale		(114,087	)		(110,098	)		(91,214	)		(114,087	)
Proceeds from loans sold		113,322			107,240			95,599			113,121
Provision for deferred income taxes		790			2,753			325			790
Excess tax benefit from stock-based compensation		-			(715	)
Change in income taxes payable/receivable		412			1,824			(2,576	)		412
Change in accrued interest receivable		(197	)		(90	)		(754	)		(197	)
Change in accrued interest payable		3			109			(467	)		3
Net cash provided by operating activities		35,250			31,244			39,873			35,335

Investing activities:
Purchases of investment securities available for sale		(120,839	)		(124,161	)		(200,292	)		(120,839	)
Purchases of investment securities held to maturity		(2,928	)		-			(3,466	)		(2,928	)
Proceeds from maturity and paydowns of investment securities available for sale		45,666			48,968			259,765			45,666
Proceeds from maturity and paydowns of investment securities held to maturity		22			-			71			22
Proceeds from sale of investment securities available for sale		202			64,528			12,982			202
Net change in FHLB stock		(243	)		4,762			1,057			(243	)
Proceeds from calls of investment securities		58,406			80,465			22,180			58,406
Net change in other investments		339			(4,223	)		(314	)		339
Purchase of domain name								(151	)		-
Net portfolio loan and lease originations		(223,438	)		(150,812	)		(142,416	)		(223,438	)
Purchases of premises and equipment		(1,559	)		(5,194	)		(5,251	)		(1,559	)
Purchases of BOLI		-			(5,000	)
Acquisitions, net of cash acquired		-			16,129			(4,792	)		-
Capitalize costs to OREO								(50	)		-
Proceeds from sale of OREO		1,806			928			375			1,806
Net cash (used in) provided by investing activities		(242,566	)		(73,610	)
Net cash used in investing activities								(60,302	)		(242,566	)

Financing activities:
Change in deposits		225,352			70,780			104,558			225,352
Change in short-term borrowings		(44,091	)		(108,066	)		(23,277	)		(44,091	)
Dividends paid		(10,400	)		(10,395	)		(11,043	)		(10,400	)
Change in FHLB advances and other borrowings		(50,000	)		(24,883	)
Net proceeds from issuance of subordinated notes		-			29,466
Excess tax benefit from stock-based compensation		-			715
Change in long-term FHLB advances and other borrowings								(55,000	)		(50,000	)
Payment of contingent consideration for business combinations								(100	)		(85	)
Cash payments to taxing authorities on employees' behalf from shares withheld from stock-based compensation		(726	)		-			(1,112	)		(726	)
Net purchase of treasury stock for deferred compensation plans		(97	)		-			(98	)		(97	)
Net purchase of treasury stock		(7,971	)		(21,402	)
Proceeds from issuance of common stock		-			20
Net purchase of treasury stock through publicly announced plans								-			(7,971	)
Proceeds from exercise of stock options		1,205			5,003			1,288			1,205
Net cash provided by (used in) financing activities		113,272			(58,762	)
Net cash provided by financing activities								15,216			113,187

Change in cash and cash equivalents		(94,044	)		(101,128	)		(5,213	)		(94,044	)
Cash and cash equivalents at beginning of period		143,067			219,269			50,765			143,067
Cash and cash equivalents at end of period	$	49,023		$	118,141		$	45,552		$	49,023

Supplemental cash flow information:
Cash paid during the year for:
Income taxes	$	12,372		$	7,301		$	16,537		$	12,372
Interest	$	7,823		$	5,674		$	10,422		$	7,823

Non-cash information:
Available for sale securities purchased, not settled	$	-		$	664
Change in other comprehensive income	$	2,540		$	357
Change in other comprehensive loss							$	1,009		$	2,540
Change in deferred tax due to change in comprehensive income	$	1,379		$	401		$	544		$	1,379
Issuance of shares and options for acquisitions	$	-		$	123,734
Transfer of loans to other real estate owned and repossessed assets							$	309		$	296
Acquisition of noncash assets and liabilities:
Assets acquired	$	-		$	727,379		$	7,284		$	-
Liabilities assumed	$	-		$	619,774		$	2,492		$	-

The accompanying notes are an integral part of the unaudited consolidated financial statements.

Page 6

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes In ~~Shareholders’~~Shareholders’ Equity - Unaudited

~~(dollars in thousands, except per share information)~~

For the Nine Months Ended September 30, 2016

Shares of
Common
Stock Issued

Common
Stock

Paid-in Capital

Treasury
Stock

Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings

Total
Shareholders'
Equity

Balance December 31, 2015
20,931,416 $ 20,931 $ 228,814 $ (58,144 ) $ (412 ) $ 174,522 $ 365,711

Net income
- - - - - 26,628 26,628
Tax provision to return adjustment related to excess tax benefit on stock-based compensation
- - 197 - - - 197
Dividends declared, $0.61 per share
- - - - - (10,386 ) (10,386 )
Other comprehensive income, net of tax expense of $1,379
- - - - 2,540 - 2,540
Stock based compensation
- - 1,233 - - - 1,233
Retirement of treasury stock
(4,320 ) (4 ) (39 ) 43 - - -
Net purchase of treasury stock
- - - (8,794 ) - - (8,794 )
Common stock issued through share-based awards and options exercises
136,440 137 1,193 - - - 1,330

Balance September 30, 2016
21,063,536 $ 21,064 $ 231,398 $ (66,895 ) $ 2,128 $ 190,764 $ 378,459

(dollars in thousands, except per share information)

	For the Nine Months Ended September 30, 2017
	Shares of Common Stock Issued			Common Stock			Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity

Balance December 31, 2016		21,110,968		$	21,111		$	232,806		$	(66,950	)	$	(2,409	)	$	196,569		$	381,127
Net income		-			-			-			-			-			29,216			29,216
Dividends declared, $0.64 per share		-			-			-			-			-			(11,019	)		(11,019	)
Other comprehensive income, net of tax expense of $544		-			-			-			-			1,009			-			1,009
Stock based compensation		-			-			1,476			-			-			-			1,476
Form S-4 stock issuance costs		-			-			(108	)		-			-						(108	)
Retirement of treasury stock		(2,628	)		(3	)		(23	)		26			-			-			-
Net purchase of treasury stock from stock awards for statutory tax withholdings		-			-			-			(1,112	)		-			-			(1,112	)
Net purchase of treasury stock for deferred compensation trusts		-			-			-			(98	)		-			-			(98	)
Common stock issued through share-based awards and options exercises		139,455			140			1,261			-			-			-			1,401
Balance September 30, 2017		21,247,795		$	21,248		$	235,412		$	(68,134	)	$	(1,400	)	$	214,766		$	401,892

The accompanying notes are an integral part of the unaudited consolidated financial statements.

Page 7

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Notesto Consolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In the opinion of Bryn Mawr Bank ~~Corporation’s~~Corporation’s (the “Corporation”) management, all adjustments necessary for a fair presentation of the consolidated financial position and the results of operations for the interim periods presented have been included. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Corporation’s Annual Report on Form 10-K for the twelve months ended December 31, ~~2015~~2016 (the ~~“2015~~“2016 Annual Report”).

The results of operations for the three and nine months ended September 30, ~~2016~~2017 are not necessarily indicative of the results to be expected for the full year.

Note 2 - Earnings ~~per~~per Common Share

Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per common share ~~takes into account~~includes the potential dilution computed pursuant to the treasury stock method that could occur if stock options were exercised and converted into common stock, as well as the effect of restricted and performance shares becoming unrestricted common stock. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive. All weighted average shares, actual shares and per share information in the financial statements have been adjusted retroactively for the effect of stock dividends and splits.

Three Months Ended

Nine Months Ended

September 30,

September 30,

(dollars in thousands except per share data)

2016

2015

2016

2015

Numerator:

Net income available to common shareholders
$ 9,374 $ 7,496 $ 26,628 $ 23,109
Denominator for basic earnings per share –weighted average shares outstanding
16,860,727 17,572,421 16,840,457 17,610,353
Effect of dilutive common shares
211,631 261,877 153,998 320,067
Denominator for diluted earnings per share – adjusted weighted average shares outstanding
17,072,358 17,834,298 16,994,455 17,930,420
Basic earnings per share
$ 0.56 $ 0.43 $ 1.58 $ 1.31
Diluted earnings per share
$ 0.55 $ 0.42 $ 1.57 $ 1.29
Antidilutive shares excluded from computation of average dilutive earnings per share
— — — —

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands except per share data)	2017		2016		2017		2016
Numerator:
Net income available to common shareholders	$	10,739	$	9,374	$	29,216	$	26,628
Denominator for basic earnings per share – weighted average shares outstanding		17,023,046		16,860,727		16,987,499		16,840,457
Effect of dilutive common shares		230,936		211,631		254,728		153,998
Denominator for diluted earnings per share – adjusted weighted average shares outstanding		17,253,982		17,072,358		17,242,227		16,994,455
Basic earnings per share	$	0.63	$	0.56	$	1.72	$	1.58
Diluted earnings per share	$	0.62	$	0.55	$	1.69	$	1.57
Antidilutive shares excluded from computation of average dilutive earnings per share		21,621		—		47,268		—

Page 8

Note 3 - Business Combinations

Harry~~Robert J. McAllister Agency,~~ R. Hirshorn & Company, Inc., d/b/a Hirshorn Boothby (“~~RJM”~~Hirshorn”)

The acquisition of ~~RJM,~~Hirshorn, an insurance ~~brokerage~~agency headquartered in ~~Rosemont, Pennsylvania,~~the Chestnut Hill section of Philadelphia, was completed on ~~April 1, 2015.~~May 24, 2017. Immediately after the acquisition, Hirshorn was merged into the Bank’s existing insurance subsidiary, Powers Craft Parker and Beard, Inc. The consideration paid by the ~~Corporation~~Bank was ~~$1.0~~$7.5 million, of which ~~$500 thousand~~$5.8 million was paid at closing, with ~~five~~three contingent cash payments, not to exceed ~~$100~~$575 thousand each, to be payable on each of ~~March 31, 2016, March 31, 2017, March 31,~~May 24, 2018, ~~March 31,~~May 24, 2019, and ~~March 31,~~May 24, 2020, subject to the attainment of certain ~~revenue~~ targets during the related periods. ~~During the three months ended September 30, 2016, the first contingent payment in the amount of $85 thousand was issued.~~ The acquisition enhanced the ~~Corporation’s~~Bank’s ability to offer comprehensive insurance solutions to both individual and business ~~clients.~~clients and continues the strategy of selectively establishing specialty offices in targeted areas.

~~Page 8~~

In connection with the ~~RJM~~Hirshorn acquisition, the following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of acquisition and ~~subsequent adjustments, during the measurement period, to the fair value of the assets acquired, liabilities assumed and~~ the resulting goodwill recorded:

(dollars in thousands)	Original Estimates		Adjustments to Estimates			Final Valuation
Consideration paid:
Cash paid at closing	$	500	$	—		$	500	$	5,770
Contingent payment liability		500		—			500
Contingent payment liability (present value)									1,690
Value of consideration		1,000		—			1,000		7,460

Assets acquired:
Cash operating accounts		20		—			20		978
Intangible assets – trade name		129		(129	)		—		195
Intangible assets – customer relationships		424		—			424		2,672
Intangible assets – non-competition agreements		257		—			257		41
Premises and equipment									1,795
Accounts receivable									192
Other assets		4		—			4		27
Total assets		834		(129	)		705		5,900

Liabilities assumed:
Deferred tax liability		336		(45	)		291
Accounts payable									800
Other liabilities		46		—			46		2
Total liabilities		382		(45	)		337		802

Net assets acquired		452		(84	)		368		5,098

Goodwill resulting from acquisition of RJM	$	548	$	84		$	632
Goodwill resulting from acquisition of Hirshorn								$	2,362

During the three months ended December 31, 2015, a measurement-period adjustment was made which eliminated the value initially placed on the trade name (and its associated deferred tax liability), as the entity was immediately merged into PCPB.

AsPending Business Combination – Royal Bancshares of ~~December 31, 2015, the estimates of fair values of the assets acquired and liabilities assumed in the acquisition of RJM were finalized.~~

Pennsylvania~~Continental Bank Holdings,~~, Inc.

On January ~~1, 2015,~~30, 2017, the ~~previously announced merger~~Corporation entered into a definitive Agreement and Plan of ~~Continental Bank Holdings,~~Merger to acquire Royal Bancshares of Pennsylvania, Inc. (“~~CBH”~~RBPI”), parent company of Royal Bank America (“RBA”), in a transaction with an aggregate value of $127.7 million (the “RBPI Acquisition”). In connection with the Acquisition, RBPI will merge with and into the Corporation and ~~the merger of Continental Bank~~RBA will merge with and into the ~~Bank (collectively, the “Merger”) as contemplated by the Agreement~~Bank. The RBPI Acquisition, which is expected to add approximately $602 million in loans and ~~Plan of Merger, by and between CBH and the Corporation, dated as of May 5, 2014 (as amended by the Amendment to Agreement and Plan of Merger, dated as of October 23, 2014, the “Agreement”)~~$630 million in deposits (based on December 31, 2016 financial information), ~~were completed. In accordance with the Agreement, the aggregate share consideration paid to CBH shareholders consisted of 3,878,383 shares (which included fractional shares paid in cash) of~~strengthens the Corporation’s ~~common stock. Shareholders~~position as the largest community bank in Philadelphia’s western suburbs and, based on deposits, ranks it as the eighth largest community bank headquartered in Pennsylvania. The RBPI Acquisition, which will expand the Corporation's distribution network by providing entry into the new markets of ~~CBH received 0.45 shares~~New Jersey and Berks County, Pennsylvania, and an expanded physical presence in Philadelphia County, Pennsylvania, is expected to close during the fourth quarter of ~~Corporation common stock for each share of CBH common stock they owned as of the effective date of the Merger. Holders of options~~2017, subject to purchase shares of CBH common stock received options to purchase shares of Corporation common stock, converted at the same ratio of 0.45. In addition, $1.3 million was paid to certain warrant holders to cash-out certain warrants. In accordance with the acquisition method of accounting, assets acquiredcustomary regulatory approvals and liabilities assumed were preliminarily adjusted to their fair values as of the date of the Merger. The excess of consideration paid above the fair value of net assets acquired was recorded as goodwill. This goodwill is not amortizable nor is it deductible for income tax purposes.closing conditions.

Page 9

In connection with the Merger, the following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of acquisition and the subsequent adjustments, during the measurement period, to the fair value of the assets acquired, liabilities assumed and the resulting goodwill recorded:

(dollars in thousands)

Original
Estimates

Adjustments to
Estimates

Final
Valuation

Consideration paid:

Common shares issued (3,878,304)
$ 121,391 $ — $ 121,391
Cash in lieu of fractional shares
2 — 2
Cash-out of certain warrants
1,323 — 1,323
Fair value of options assumed
2,343 — 2,343
Value of consideration
125,059 — 125,059

Assets acquired:

Cash and due from banks
17,934 — 17,934
Investment securities available for sale
181,838 — 181,838
Loans*
426,601 (1,864
)
424,737
Premises and equipment
9,037 — 9,037
Deferred income taxes
6,288 1,396 7,684
Bank-owned life insurance
12,054 — 12,054
Core deposit intangible
4,191 — 4,191
Favorable lease asset
792 (68
)
724
Other assets
18,085 (111
)
17,974
Total assets
676,820 (647
)
676,173

Liabilities assumed:

Deposits
481,674 — 481,674
FHLB and other long-term borrowings
19,726 — 19,726
Short-term borrowings
108,609 — 108,609
Unfavorable lease liability
2,884 — 2,884
Other liabilities
4,706 1,867 6,573
Total liabilities
617,599 1,867 619,466

Net assets acquired
59,221 (2,514
)
56,707

Goodwill resulting from the Merger
$ 65,838 $ 2,514 $ 68,352

*includes $507 thousand in loans held for sale

During the measurement period subsequent to the Merger, adjustments to the fair value of the assets acquired and liabilities assumed were related to circumstances that existed prior to the Merger date, but that were not known to the Corporation. The adjustments included reductions in the fair value of certain loans, unrecorded liabilities of CBH, and an immaterial adjustment to the calculation of a favorable lease asset, which reduced its value, along with the associated deferred tax items.

~~As of December 31, 2015, the estimates of fair values of the assets acquired and liabilities assumed in the Merger were finalized.~~

~~Page 10~~

Due Diligence, Merger-Related and Merger Integration Expenses

Due diligence, merger-related and merger integration expenses may include consultant costs, investment banker fees, contract breakage fees, retention bonuses for severed employees, and salary and wages for ~~redundant~~ staffing involved in the integration of the institutions. The following table details the costs identified and classified as due diligence, merger-related and merger integration costs for the periods indicated:

									Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	Three Months EndedSeptember 30,				Nine months EndedSeptember 30,				2017		2016		2017		2016
	2016		2015		2016		2015
Salaries and wages									$	28	$	—	$	428	$	—
Employee benefits										5		—		10		—
Advertising	$	—	$	36	$	—	$	83		89		—		108		—
Employee benefits		—		60		—		213
Furniture, fixtures and equipment		—		64		—		93
Professional fees		—		319		—		2,084		662		—		1,600		—
Salaries and wages		—		480		—		1,224
Information technology										41		—		300		—
Other		—		56		—		1,113		25		—		151		—
Total due diligence and merger-related expenses	$	—	$	1,015	$	—	$	4,810	$	850	$	—	$	2,597	$	—

Note 4 - Investment Securities

The amortized cost and fair value of investment securitiesavailable for sale are as follows:

As ofSeptember 30 ~~2016~~, 2017

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	101	$	—	$	—		$	101	$	100	$	—	$	—		$	100
Obligations of the U.S. government and agencies		75,652		987		(41	)		76,598		143,632		175		(1,095	)		142,712
Obligations of state and political subdivisions		37,128		156		(20	)		37,264		24,055		48		(24	)		24,079
Mortgage-backed securities		181,118		3,805		(5	)		184,918		259,812		1,491		(622	)		260,681
Collateralized mortgage obligations		51,091		326		(72	)		51,345		40,235		56		(696	)		39,595
Other investments		16,759		108		(183	)		16,684		4,324		246		(16	)		4,554
Total	$	361,849	$	5,382	$	(321	)	$	366,910	$	472,158	$	2,016	$	(2,453	)	$	471,721

As of December 31, ~~2015~~
2016

(dollars in thousands)

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair Value

U.S. Treasury securities
$ 101 $ — $ (1
)
$ 100
Obligations of the U.S. government and agencies
101,342 470 (317
)
101,495
Obligations of state and political subdivisions
41,892 123 (49
)
41,966
Mortgage-backed securities
157,422 1,482 (215
)
158,689
Collateralized mortgage obligations
29,756 166 (123
)
29,799
Other investments
17,263 38 (384
)
16,917
Total
$ 347,776 $ 2,279 $ (1,089
)
$ 348,966

~~Page 11~~

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	200,094	$	3	$	—		$	200,097
Obligations of the U.S. government and agencies		83,111		167		(1,080	)		82,198
Obligations of state and political subdivisions		33,625		26		(121	)		33,530
Mortgage-backed securities		185,997		1,260		(1,306	)		185,951
Collateralized mortgage obligations		49,488		108		(902	)		48,694
Other investments		16,575		105		(154	)		16,526
Total	$	568,890	$	1,669	$	(3,563	)	$	566,996

The following ~~tables~~tables detail the amount of investment securitiesavailable for sale that were in an unrealized loss position as of the dates indicated:

As of September 30 ~~2016~~, 2017

	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Obligations of the U.S. government and agencies	$	91,172	$	(726	)	$	15,631	$	(369	)	$	106,803	$	(1,095	)
Obligations of state and political subdivisions		4,207		(15	)		2,859		(9	)		7,066		(24	)
Mortgage-backed securities		104,579		(447	)		11,444		(175	)		116,023		(622	)
Collateralized mortgage obligations		9,916		(100	)		21,899		(596	)		31,815		(696	)
Other investments		1,480		(16	)		—		—			1,480		(16	)
Total	$	211,354	$	(1,304	)	$	51,833	$	(1,149	)	$	263,187	$	(2,453	)

Less than 12
Months

12 Months
or Longer

Total

(dollars in thousands)

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Obligations of the U.S. government and agencies
$ 10,959 $ (41
)
$ — $ — $ 10,959 $ (41
)
Obligations of state and political subdivisions
12,802 (20
)
— — 12,802 (20
)
Mortgage-backed securities
5,444 (5
)
— — 5,444 (5
)
Collateralized mortgage obligations
19,742 (72
)
— — 19,742 (72
)
Other investments
1,245 (74
)
11,847 (109
)
13,092 (183
)
Total
$ 50,192 $ (212
)
$ 11,847 $ (109
)
$ 62,039 $ (321
)

Page 10

As of December 31, ~~2015~~2016

	Less than 12 Months					12 Months or Longer					Total					Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities	$	100	$	(1	)	$	—	$	—		$	100	$	(1	)
Obligations of the U.S. government and agencies		49,759		(317	)		—		—			49,759		(317	)	$	62,211	$	(1,080	)	$	—	$	—		$	62,211	$	(1,080	)
Obligations of state and political subdivisions		18,725		(46	)		2,016		(3	)		20,741		(49	)		24,482		(121	)		—		—			24,482		(121	)
Mortgage-backed securities		55,763		(215	)		—		—			55,763		(215	)		101,433		(1,306	)		—		—			101,433		(1,306	)
Collateralized mortgage obligations		6,407		(85	)		2,436		(38	)		8,843		(123	)		35,959		(902	)		—		—			35,959		(902	)
Other investments		3,945		(238	)		11,810		(146	)		15,755		(384	)		2,203		(93	)		11,895		(61	)		14,098		(154	)
Total	$	134,699	$	(902	)	$	16,262	$	(187	)	$	150,961	$	(1,089	)	$	226,288	$	(3,502	)	$	11,895	$	(61	)	$	238,183	$	(3,563	)

Management evaluates the ~~Corporation’s~~Corporation’s investment securities available for sale that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. The available for sale investment portfolio includes debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state and local municipalities and other issuers. All fixed income investment securities in the Corporation’s available for sale investment portfolio are rated as investment grade. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, interest rates and the bond rating of each security. The unrealized losses presented in the tables above are temporary in nature and are primarily related to market interest rates rather than the underlying credit quality of the issuers. The Corporation does not believe that these unrealized losses are other-than-temporary. The Corporation does not have the intent to sell these securities prior to their maturity or the recovery of their cost bases and believes that it is more likely than not that it will not have to sell these securities prior to their maturity or the recovery of their cost bases.

As of September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, securities having fair values of ~~$130.8~~$105.9 million and ~~$128.9~~$119.4 million, respectively, were specifically pledged as collateral for public funds, trust deposits, the Federal Reserve Bank of Philadelphia discount window program, Federal Home Loan Bank of Pittsburgh (“FHLB”) borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans ~~and securities~~ as part of the Corporation’s borrowing agreement with the FHLB.

The amortized cost and fair value of investment securities available for sale as of September 30, 2017 and December 31, 2016, by contractual maturity, are detailed below:

	September 30, 2017				December 31, 2016
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investment securities¹:
Due in one year or less	$	11,870	$	11,873	$	213,876	$	213,885
Due after one year through five years		98,400		97,785		40,335		40,270
Due after five years through ten years		42,700		42,342		45,840		44,914
Due after ten years		15,917		15,990		18,079		18,055
Subtotal		168,887		167,990		318,130		317,124
Mortgage-related securities¹		300,047		300,276		235,485		234,644
Mutual funds with no stated maturity		3,224		3,455		15,275		15,228
Total	$	472,158	$	471,721	$	568,890	$	566,996

¹	Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call orprepay obligations with or without call or prepayment penalties.

Page 1211

The amortized cost and fair value of investment securities~~available for sale~~held to maturity as of September 30, ~~2016~~2017 and December 31, ~~2015, by contractual maturity,~~2016 are ~~shown~~detailed below:

September 30, 2016

December 31, 2015

(dollars in thousands)

Amortized
Cost

Fair
Value

Amortized
Cost

Fair
Value

Investment securities:

Due in one year or less
$ 12,702 $ 12,706 $ 9,570 $ 9,574
Due after one year through five years
43,579 43,910 61,368 61,467
Due after five years through ten years
39,539 39,659 53,193 53,070
Due after ten years
18,511 19,138 20,904 21,141
Subtotal
114,331 115,413 145,035 145,252
Mortgage-related securities¹
232,209 236,263 187,178 188,488
Mutual funds with no stated maturity
15,309 15,234, 15,563 15,226
Total
$ 361.849 $ 366,910 $ 347,776 $ 348,966

¹~~Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.~~

As of September 30, 2017

(dollars in thousands)

Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Fair Value

Mortgage-backed securities

6,255

(47

)

6,218

Total

6,255

(47

)

6,218

As of December 31, 2016

(dollars in thousands)

Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Fair Value

Mortgage-backed securities

2,879

—

(61

)

2,818

Total

2,879

—

(61

)

2,818

The following tables detail the amount of held to maturity securities that were in an unrealized loss position as of September 30, 2017 and December 31, 2016:

As of September 30, 2017

	Less than 12 Months					12 Months or Longer					Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities	$	2,194	$	(5	)	$	2,783	$	(42	)	$	4,977	$	(47	)
Total	$	2,194	$	(5	)	$	2,783	$	(42	)	$	4,977	$	(47	)

As of December 31, 2016

	Less than 12 Months					12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed securities	$	2,818	$	(61	)	$	—	$	—	$	2,818	$	(61	)
Total	$	2,818	$	(61	)	$	—	$	—	$	2,818	$	(61	)

The amortized cost and fair value of investment securitiesheld to maturity as of September 30, ~~2016 are as follows:~~

~~As of September 30, 2016~~

(dollars in thousands)

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair Value

Mortgage-backed securities
$ 2,896 $ 6 $ — $ 2,902
Total
$ 2,896 $ 6 $ — $ 2,902

~~The amortized cost~~2017 and ~~fair value of investment securities~~~~held to maturity~~ ~~as of September 30,~~December 31, 2016, by contractual maturity, are ~~shown~~detailed below:

	September 30, 2016				September 30, 2017				December 31, 2016
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Mortgage-related securities¹		2,896		2,902	$	6,255	$	6,218	$	2,879	$	2,818
Total	$	2,896	$	2,902	$	6,255	$	6,218	$	2,879	$	2,818

¹	Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Page 12

As of ~~December 31, 2015, there were no investments~~~~held to maturity~~.

~~As of~~ September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the Corporation’s investment securities held intrading accounts ~~were comprised~~totaled $4.4 million and $3.9 million, respectively, and consisted solely of ~~three~~ deferred compensation trust accounts which ~~are~~were invested in ~~marketable securities~~listed mutual funds whose diversification is at the discretion of the deferred compensation plan participants. Investment securities held in trading accounts are reported at fair value, with adjustments in fair value reported through earnings.

Note 5 - Loans and Leases

The loan and lease portfolio consists of loans and leases originated by the Corporation, as well as loans acquired in mergers and acquisitions. These mergers and acquisitions include the January 2015 acquisition of CBH, the November 2012 transaction with First Bank of Delaware (“FBD”) and the July 2010 acquisition of First Keystone Financial, Inc. (“FKF”). Many of the tables in this footnote are presented for all loans as well as supplemental tables fororiginatedandacquired loans.

~~Page 13~~

A. The table below detailsall portfolio loans and leases as of the dates ~~indicated:~~indicated:

	September 30, 2016			December 31, 2015			September 30, 2017			December 31, 2016
Loans held for sale	$	11,506		$	8,987		$	6,327		$	9,621
Real estate loans:
Commercial mortgage	$	1,089,621		$	964,259		$	1,224,571		$	1,110,898
Home equity lines and loans		206,578			209,473			206,974			207,999
Residential mortgage		418,408			406,404			422,524			413,540
Construction		133,269			90,421			133,505			141,964
Total real estate loans		1,847,876			1,670,557			1,987,574			1,874,401
Commercial and industrial		565,497			524,515			597,595			579,791
Consumer		23,717			22,129			31,306			25,341
Leases		56,267			51,787			60,870			55,892
Total portfolio loans and leases		2,493,357			2,268,988			2,677,345			2,535,425
Total loans and leases	$	2,504,863		$	2,277,975		$	2,683,672		$	2,545,046
Loans with fixed rates	$	1,135,918		$	1,103,622		$	1,141,433		$	1,130,172
Loans with adjustable or floating rates		1,368,945			1,174,353			1,542,239			1,414,874
Total loans and leases	$	2,504,863		$	2,277,975		$	2,683,672		$	2,545,046
Net deferred loan origination fees included in the above loan table	$	(795	)	$	(70	)	$	(718	)	$	(735	)

The table below details the Corporation’soriginated portfolio loans and leases as of the dates indicated:

	September 30, 2016			December 31, 2015			September 30, 2017			December 31, 2016
Loans held for sale	$	11,506		$	8,987		$	6,327		$	9,621
Real estate loans:
Commercial mortgage	$	920,304		$	772,571		$	1,089,369		$	946,879
Home equity lines and loans		174,774			171,189			182,301			178,450
Residential mortgage		344,540			316,487			362,237			342,268
Construction		133,269			87,155			133,505			141,964
Total real estate loans		1,572,887			1,347,402			1,767,412			1,609,561
Commercial and industrial		523,798			462,746			573,607			550,334
Consumer		23,597			21,934			31,165			25,200
Leases		56,267			51,787			60,870			55,892
Total portfolio loans and leases		2,176,549			1,883,869			2,433,054			2,240,987
Total loans and leases	$	2,188,055		$	1,892,856		$	2,439,381		$	2,250,608
Loans with fixed rates	$	988,721		$	932,575		$	1,026,646		$	992,917
Loans with adjustable or floating rates		1,199,334			960,281			1,412,735			1,257,691
Total originated loans and leases	$	2,188,055		$	1,892,856		$	2,439,381		$	2,250,608
Net deferred loan origination fees included in the above loan table	$	(795	)	$	(70	)	$	(718	)	$	(735	)

Page 13

The table below details the Corporation’sacquired portfolio loans as of the dates indicated:

September 30,
2016

December 31,
2015

Real estate loans:

Commercial mortgage
$ 169,317 $ 191,688
Home equity lines and loans
31,804 38,284
Residential mortgage
73,868 89,917
Construction
— 3,266
Total real estate loans
274,989 323,155
Commercial and industrial
41,699 61,769
Consumer
120 195
Total portfolio loans and leases
316,808 385,119
Total loans and leases
$ 316,808 $ 385,119
Loans with fixed rates
$ 147,197 $ 171,047
Loans with adjustable or floating rates
169,611 214,072
Total acquired loans and leases
$ 316,808 $ 385,119

~~Page 14~~

	September 30, 2017		December 31, 2016
Real estate loans:
Commercial mortgage	$	135,202	$	164,019
Home equity lines and loans		24,673		29,549
Residential mortgage		60,287		71,272
Total real estate loans		220,162		264,840
Commercial and industrial		23,988		29,457
Consumer		141		141
Total portfolio loans and leases		244,291		294,438
Total acquired loans and leases	$	244,291	$	294,438
Loans with fixed rates	$	114,787	$	137,255
Loans with adjustable or floating rates		129,504		157,183
Total acquired loans and leases	$	244,291	$	294,438

B. Components of the net investment in leases are detailed as follows:

(dollars in thousands)	September 30, 2016			December 31, 2015			September 30, 2017			December 31, 2016
Minimum lease payments receivable	$	62,950		$	58,422		$	67,561		$	62,379
Unearned lease income		(8,875	)		(8,919	)		(8,946	)		(8,608	)
Initial direct costs and deferred fees		2,192			2,284			2,255			2,121
Total	$	56,267		$	51,787		$	60,870		$	55,892

CC.. Non-Performing Loans and Leases⁽¹⁾

The following table detailsall non-performing portfolio loans and leases as of the dates indicated:

(dollars in thousands)	September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016
Non-accrual loans and leases:
Commercial mortgage	$	139	$	829	$	193	$	320
Home equity lines and loans		2,827		2,027		613		2,289
Residential mortgage		2,845		3,212		1,589		2,658
Construction		—		34
Commercial and industrial		3,960		4,133		1,977		2,957
Consumer		2		—		—		2
Leases		110		9		100		137
Total	$	9,883	$	10,244	$	4,472	$	8,363

⁽¹⁾

Purchased credit-impaired loans, which have been recorded at their fair values at acquisition, and which are performing, are excluded from this table, with the exception of $270thousandand $344 thousandof purchased credit-impaired loans as of September 30, 2017and December 31, 2016, respectively, which became non-performing subsequent to acquisition.

The following table details non-performing originated portfolio loans and leases as of the dates indicated:

(dollars in thousands)	September 30, 2017		December 31, 2016
Non-accrual originated loans and leases:
Commercial mortgage	$	144	$	265
Home equity lines and loans		270		2,169
Residential mortgage		458		1,654
Commercial and industrial		1,131		941
Consumer		—		2
Leases		100		137
Total	$	2,103	$	5,168

Page 14

The following table details non-performing acquired portfolio loans⁽¹⁾ as of the dates indicated:

(dollars in thousands)	September 30, 2017		December 31, 2016
Non-accrual acquired loans and leases:
Commercial mortgage	$	49	$	55
Home equity lines and loans		343		120
Residential mortgage		1,131		1,004
Commercial and industrial		846		2,016
Total	$	2,369	$	3,195

⁽¹⁾

Purchased credit-impaired loans, which have been recorded at their fair values at acquisition, and which are performing, are excluded from this table, with the exception of$389270 thousand and ~~$661~~$344 thousand of purchased credit-impaired loans as ofSeptember 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, which became non-performing subsequent to acquisition.

~~The following table details non-performing~~~~originated~~ ~~portfolio loans and leases as of the dates indicated:~~

(dollars in thousands)

September 30,
2016

December 31,
2015

Non-accrual originated loans and leases:

Commercial mortgage
$ 83 $ 279
Home equity lines and loans
2,633 1,788
Residential mortgage
1,851 1,964
Construction
— 34
Commercial and industrial
2,440 3,044
Consumer
2 —
Leases
110 9
Total
$ 7,119 $ 7,118

D~~The following table details non-performing~~~~acquired~~ ~~portfolio loans~~⁽¹⁾ ~~as of the dates indicated:~~

(dollars in thousands)

September 30,
2016

December 31,
2015

Non-accrual acquired loans and leases:

Commercial mortgage
$ 56 $ 550
Home equity lines and loans
194 239
Residential mortgage
994 1,248
Commercial and industrial
1,520 1,089
Total
$ 2,764 $ 3,126

⁽¹⁾

~~Purchased credit-impaired loans, which have been recorded at their fair values at acquisition, and which are performing, are excluded from this table, with the exception~~~~of $389~~ ~~thousand and $661 thousand of purchased credit-impaired loans as of~~~~September~~ ~~30, 2016 and December 31, 2015, respectively, which became non-performing subsequent to acquisition.~~

~~Page 15~~

D.. Purchased Credit-Impaired Loans

The outstanding principal balance and related carrying amount of credit-impaired loans, for which the Corporation applies ASC 310-30,Accounting for Purchased Loans with Deteriorated Credit Quality, to account for the interest earned, as of the dates indicated, are as follows:

(dollars in thousands)

September 30,

2016

December 31,

2015

September 30,

2017

December 31,

2016

Outstanding principal balance

18,727

24,879

15,149

18,091

Carrying amount⁽¹⁾

12,627

16,846

10,380

12,432

⁽¹⁾

Includes$420274 thousand and ~~$699 thousand~~ $368 thousandof purchased credit-impaired loans as ofSeptember 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, for which the Corporation could not estimate the timing or amount of expected cash flows to be collected at acquisition, and for which no accretable yield is recognized. Additionally, the table above includes$327089thousandand $344 thousand ~~and $661 thousand~~ of purchased credit-impaired loans as ofSeptember 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, whichbecame non-performing subsequent to acquisition, which are disclosed in Note ~~5C,~~5C, above, and which also have no accretable yield.

The following table presents changes in the accretable discount on purchased credit-impaired loans, for which the Corporation applies ASC 310-30, for the nine months ended September 30, ~~2016:~~2017:

(dollars in thousands)	Accretable Discount			Accretable Discount
Balance, December 31, 2015	$	6,115
Balance, December 31, 2016				$	3,233
Accretion		(1,555	)		(1,553	)
Reclassifications from nonaccretable difference		7			—
Additions/adjustments		68			666
Disposals		(1,274	)		—
Balance, September 30, 2016	$	3,361
Balance, September 30, 2017				$	2,346

Page 15

EE.. Age Analysis of Past Due Loans and Leases

The following tables present an aging ofall portfolio loans and leases as of the dates indicated:

Accruing Loans and Leases

(dollars in thousands)

As ofSeptember 30, 2016

30 – 59
Days
Past Due

60 – 89
Days
Past Due

Over 89
Days
Past Due

Total Past
Due

Current

Total
Accruing
Loans and
Leases

Nonaccrual
Loans and
Leases

Total
Loans and
Leases

Commercial mortgage
$ 87 $ — $ — $ 87 $ 1,089,395 $ 1,089,482 $ 139 $ 1,089,621
Home equity lines and loans
— — — — 203,751 203,751 2,827 206,578
Residential mortgage
1,523 271 — 1,794 413,769 415,563 2,845 418,408
Construction
— — — — 133,269 133,269 — 133,269
Commercial and industrial
276 5 — 281 561,256 561,537 3,960 565,497
Consumer
26 — 26 23,689 23,715 2 23,717
Leases
271 31 — 302 55,855 56,157 110 56,267
$ 2,183 $ 307 $ — $ 2,490 $ 2,480,984 $ 2,483,474 $ 9,883 $ 2,493,357

Accruing Loans and Leases

(dollars in thousands)

As of December 31, 2015

30 – 59
Days
Past Due

60 – 89
Days
Past Due

Over 89
Days
Past Due

Total Past
Due

Current

Total
Accruing
Loans and
Leases

Nonaccrual
Loans and
Leases

Total
Loansand
Leases

Commercial mortgage
$ 1,126 $ 211 $ — $ 1,337 $ 962,093 $ 963,430 $ 829 $ 964,259
Home equity lines and loans
1,596 15 — 1,611 205,835 207,446 2,027 209,473
Residential mortgage
1,923 74 — 1,997 401,195 403,192 3,212 406,404
Construction
— — — — 90,387 90,387 34 90,421
Commercial and industrial
99 39 — 138 520,244 520,382 4,133 524,515
Consumer
20 — — 20 22,109 22,129 — 22,129
Leases
375 123 — 498 51,280 51,778 9 51,787
$ 5,139 $ 462 $ — $ 5,601 $ 2,253,143 $ 2,258,744 $ 10,244 $ 2,268,988

~~Page 16~~

	Accruing Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of September 30, 2017
Commercial mortgage	$	525	$	—	$	—	$	525	$	1,223,853	$	1,224,378	$	193	$	1,224,571
Home equity lines and loans		—		—		—		—		206,361		206,361		613		206,974
Residential mortgage		1,608		1,857		—		3,465		417,470		420,935		1,589		422,524
Construction		—		116		—		116		133,389		133,505		—		133.505
Commercial and industrial		—		—		—		—		595,618		595,618		1,977		597,595
Consumer		22		—		—		22		31,284		31,306		—		31,306
Leases		296		133		—		429		60,341		60,770		100		60,870
Total	$	2,451	$	2,106	$	—	$	4,557	$	2,668,316	$	2,672,873	$	4,472	$	2,677,345

	Accruing Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of December 31, 2016
Commercial mortgage	$	666	$	722	$	—	$	1,388	$	1,109,190	$	1,110,578	$	320	$	1,110,898
Home equity lines and loans		11		—		—		11		205,699		205,710		2,289		207,999
Residential mortgage		823		490		—		1,313		409,569		410,882		2,658		413,540
Construction		—		—		—		—		141,964		141,964		—		141,964
Commercial and industrial		36		—		—		36		576,798		576,834		2,957		579,791
Consumer		10		5		—		15		25,324		25,339		2		25,341
Leases		177		86		—		263		55,492		55,755		137		55,892
Total	$	1,723	$	1,303	$	—	$	3,026	$	2,524,036	$	2,527,062	$	8,363	$	2,535,425

*Included as “current” are $4.2 million and $15.3 million of loans and leases as of September 30, 2017 and December 31, 2016, respectively, which are classified as Administratively Delinquent. An Administratively Delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The Corporation does not consider these loans to be delinquent.

The following tables present an aging oforiginated portfolio loans and leases as of the dates indicated:

	Accruing Loans and Leases																Accruing Loans and Leases
(dollars in thousands) As ofSeptember 30, 2016	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)																	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of September 30, 2017
Commercial mortgage	$	87	$	—	$	—	$	87	$	920,134	$	920,221	$	83	$	920,304	$	398	$	—	$	—	$	398	$	1,088,827	$	1,089,225	$	144	$	1,089,369
Home equity lines and loans		—		—		—		—		172,141		172,141		2,633		174,774		—		—		—		—		182,031		182,031		270		182,301
Residential mortgage		1,079		193		—		1,272		341,417		342,689		1,851		344,540		1,511		—		—		1,511		360,268		361,779		458		362,237
Construction		—		—		—		—		133,269		133,269		—		133,269		—		116		—		116		133,389		133,505		—		133,505
Commercial and industrial		240		5		—		245		521,113		521,358		2,440		523,798		—		—		—		—		572,476		572,476		1,131		573,607
Consumer		26		—		—		26		23,569		23,595		2		23,597		22		—		—		22		31,143		31,165		—		31,165
Leases		271		31		—		302		55,855		56,157		110		56,267		296		133		—		429		60,341		60,770		100		60,870
	$	1,703	$	229	$	—	$	1,932	$	2,167,498	$	2,169,430	$	7,119	$	2,176,549
Total																	$	2,227	$	249	$	—	$	2,476	$	2,428,475	$	2,430,951	$	2,103	$	2,433,054

Accruing Loans and Leases

(dollars in thousands)

As of December 31, 2015

30 – 59
Days
Past Due

60 – 89
Days
Past Due

Over 89
Days
Past Due

Total Past
Due

Current

Total
Accruing
Loans and
Leases

Nonaccrual
Loans and
Leases

Total
Loansand
Leases

Commercial mortgage
$ 1,016 $ 155 $ — $ 1,171 $ 771,121 $ 772,292 $ 279 $ 772,571
Home equity lines and loans
1,445 — — 1,445 167,956 169,401 1,788 171,189
Residential mortgage
1,475 9 — 1,484 313,039 314,523 1,964 316,487
Construction
— — — — 87,121 87,121 34 87,155
Commercial and industrial
— — — — 459,702 459,702 3,044 462,746
Consumer
20 — — 20 21,914 21,934 — 21,934
Leases
375 123 — 498 51,280 51,778 9 51,787
$ 4,331 $ 287 $ — $ 4,618 $ 1,872,133 $ 1,876,751 $ 7,118 $ 1,883,869

Page 16

	Accruing Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of December 31, 2016
Commercial mortgage	$	—	$	722	$	—	$	722	$	945,892	$	946,614	$	265	$	946,879
Home equity lines and loans		11		—		—		11		176,270		176,281		2,169		178,450
Residential mortgage		773		64		—		837		339,778		340,615		1,653		342,268
Construction		—		—		—		—		141,964		141,964		—		141,964
Commercial and industrial		—		—		—		—		549,393		549,393		941		550,334
Consumer		10		5		—		15		25,183		25,198		2		25,200
Leases		177		86		—		263		55,492		55,755		137		55,892
Total	$	971	$	877	$	—	$	1,848	$	2,233,972	$	2,235,820	$	5,167	$	2,240,987

*Included as “current” are $4.2million and $13.5 million of loans and leases as of September 30, 2017 and December 31, 2016, respectively, which are classified as Administratively Delinquent. An Administratively Delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The Corporation does not consider these loans to be delinquent.

T~~The~~he following tables present an aging of~~acquired~~acquired portfolio loans and leases as of the dates indicated:

Accruing Loans and Leases

(dollars in thousands)

As ofSeptember 30, 2016

30 – 59
Days
Past Due

60 – 89
Days
Past Due

Over 89
Days
Past Due

Total Past Due

Current

Total
Accruing
Loans and
Leases

Nonaccrual
Loans and
Leases

Total
Loansand
Leases

Commercial mortgage
$ — $ — $ — $ — $ 169,261 $ 169,261 $ 56 $ 169,317
Home equity lines and loans
— — — — 31,610 31,610 194 31,804
Residential mortgage
444 78 — 522 72,352 72,874 994 73,868
Construction
— — — — — — — —
Commercial and industrial
36 — — 36 40,143 40,179 1,520 41,699
Consumer
— — — — 120 120 — 120
$ 480 $ 78 $ — $ 558 $ 313,486 $ 314,044 $ 2,764 $ 316,808

	Accruing Loans and Leases																Accruing Loans and Leases
(dollars in thousands) As of December 31, 2015	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)																	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of September 30, 2017
Commercial mortgage	$	110	$	56	$	—	$	166	$	190,972	$	191,138	$	550	$	191,688	$	127	$	—	$	—	$	127	$	135,026	$	135,153	$	49	$	135,202
Home equity lines and loans		151		15		—		166		37,879		38,045		239		38,284		—		—		—		—		24,330		24,330		343		24,673
Residential mortgage		448		65		—		513		88,156		88,669		1,248		89,917		97		1,857		—		1,954		57,202		59,156		1,131		60,287
Construction		—		—		—		—		3,266		3,266		—		3,266
Commercial and industrial		99		39		—		138		60,542		60,680		1,089		61,769		—		—		—		—		23,142		23,142		846		23,988
Consumer		—		—		—		—		195		195		—		195		—		—		—		—		141		141		—		141
	$	808	$	175	$	—	$	983	$	381,010	$	381,993	$	3,126	$	385,119
Total																	$	224	$	1,857	$	—	$	2,081	$	239,841	$	241,922	$	2,369	$	244,291

	Accruing Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
As of December 31, 2016
Commercial mortgage	$	666	$	—	$	—	$	666	$	163,298	$	163,964	$	55	$	164,019
Home equity lines and loans		—		—		—		—		29,429		29,429		120		29,549
Residential mortgage		50		426		—		476		69,791		70,267		1,005		71,272
Commercial and industrial		36		—		—		36		27,405		27,441		2,016		29,457
Consumer		—		—		—		—		141		141		—		141
Total	$	752	$	426	$	—	$	1,178	$	290,064	$	291,242	$	3,196	$	294,438

*Included as “current” is $1.8 million of loans and leases as of December 31,2016 which are classified as Administratively Delinquent. An Administratively Delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The Corporation does not consider these loans to be delinquent.

Page 17

FF.. Allowance for Loan and Lease Losses (the “Allowance”)

The following tables detail the roll-forward of the Allowance for the three and nine months ended September 30, 2017:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, June 30, 2017	$	6,608	$	1,214		$	1,776		$	1,111		$	4,813		$	177		$	700		$	—	$	16,399
Charge-offs		—		(69	)		(88	)		—			(301	)		(37	)		(411	)		—		(906	)
Recoveries		3		—			85			1			2			1			86			—		178
Provision for loan and lease losses		721		(53	)	��	48			(182	)		366			69			364			—		1,333
Balance, September 30, 2017	$	7,332	$	1,092		$	1,821		$	930		$	4,880		$	210		$	739		$	—	$	17,004

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, December 31, 2016	$	6,227	$	1,255		$	1,917		$	2,233		$	5,142		$	153		$	559		$	—	$	17,486
Charge-offs		—		(676	)		(158	)		—			(560	)		(96	)		(924	)				(2,414	)
Recoveries		9		—			85			3			18			5			271					391
Provision for loan and lease losses		1,096		513			(23	)		(1,306	)		280			148			833					1,541
Balance, September 30, 2017	$	7,332	$	1,092		$	1,821		$	930		$	4,880		$	210		$	739		$	—	$	17,004

The following table details the roll-forward of the Allowance for the three and nine months ended September 30, 2016:

(dollars in thousands)

Commercial
Mortgage

Home
Equity
Lines and
Loans

Residential
Mortgage

Construction

Commercial
and
Industrial

Consumer

Leases

Unallocated

Total

Balance, June 30, 2016
$ 6,021 $ 1,185 $ 1,949 $ 2,144 $ 5,045 $ 127 $ 565 $ — $ 17,036
Charge-offs
— (402
)
(4
)
— (112
)
(64
)
(240
)
— (822
)
Recoveries
4 27 2 — 16 7 62 — 118
Provision for loan and lease losses
244 402 44 (28
)
500 74 176 — 1,412
Balance, September 30, 2016
$ 6,269 $ 1,212 $ 1,991 $ 2,116 $ 5,449 $ 144 $ 563 $ — $ 17,744

(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction		Commercial and Industrial			Consumer			Leases			Unallocated			Total			Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, December 31, 2015	$	5,199		$	1,307		$	1,740		$	1,324	$	5,609		$	142		$	518		$	18		$	15,857
Balance, June 30, 2016																											$	6,021	$	1,185		$	1,949		$	2,144		$	5,045		$	127		$	565		$	—	$	17,036
Charge-offs		(110	)		(488	)		(275	)		—		(144	)		(131	)		(650	)		—			(1,798	)		—		(402	)		(4	)		—			(112	)		(64	)		(240	)		—		(822	)
Recoveries		10			31			46			63		67			23			178			—			418			4		27			2			—			16			7			62			—		118
Provision for loan and lease losses		1,170			362			480			729		(83	)		110			517			(18	)		3,267			224		402			44			(28	)		500			74			176			—		1,412
Balance September 30, 2016	$	6,269		$	1,212		$	1,991		$	2,116	$	5,449		$	144		$	563		$	—		$	17,744
Balance, September 30, 2016																											$	6,269	$	1,212		$	1,991		$	2,116		$	5,449		$	144		$	563		$	—	$	17,744

~~The following tables detail the roll-forward of the Allowance for the three and nine months ended September 30, 2015:~~

(dollars in thousands)

Commercial
Mortgage

Home
Equity
Lines and
Loans

Residential
Mortgage

Construction

Commercial
and
Industrial

Consumer

Leases

Unallocated

Total

Balance, June 30, 2015
$ 3,659 $ 1,969 $ 1,808 $ 1,462 $ 4,886 $ 324 $ 499 $ 352 $ 14,959
Charge-offs
— — (32
)
— (44
)
(32
)
(200
)
— (308
)
Recoveries
— 21 21 1 6 6 29 — 84
Provision for loan and lease losses
1,360 (244
)
438 (474
)
(205
)
(20
)
179 166 1,200
Balance, September 30, 2015
$ 5,019 $ 1,746 $ 2,235 $ 989 $ 4,643 $ 278 $ 507 $ 518 $ 15,935

(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total			Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction		Commercial and Industrial			Consumer			Leases			Unallocated			Total
Balance, December 31, 2014	$	3,948		$	1,917		$	1,736		$	1,367		$	4,533		$	238		$	468		$	379	$	14,586
Balance, December 31, 2015																											$	5,199		$	1,307		$	1,740		$	1,324	$	5,609		$	142		$	518		$	18		$	15,857
Charge-offs		(50	)		(204	)		(546	)		—			(315	)		(108	)		(325	)		—		(1,548	)		(110	)		(488	)		(275	)		—		(144	)		(131	)		(650	)		—			(1,798	)
Recoveries		23			89			30			3			32			14			87			—		278			10			31			46			63		67			23			178			—			418
Provision for loan and lease losses		1,098			(56	)		1,015			(381	)		393			134			277			139		2,619			1,170			362			480			729		(83	)		110			517			(18	)		3,267
Balance September 30, 2015	$	5,019		$	1,746		$	2,235		$	989		$	4,643		$	278		$	507		$	518	$	15,935
Balance September 30, 2016																											$	6,269		$	1,212		$	1,991		$	2,116	$	5,449		$	144		$	563		$	—		$	17,744

Page 18

The following table details the allocation of the Allowance forall portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
As ofSeptember 30, 2016
As of September 30, 2017
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	74	$	—	$	519	$	6	$	—	$	—	$	599	$	—	$	3	$	116	$	—	$	—	$	4	$	—	$	—	$	123
Collectively evaluated for impairment		6,269		1,212		1,917		2,116		4,930		138		563		—		17,145		7,332		1,089		1,705		930		4,880		206		739		—		16,881
Purchased credit-impaired⁽¹⁾		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total	$	6,269	$	1,212	$	1,991	$	2,116	$	5,449	$	144	$	563	$	—	$	17,744	$	7,332	$	1,092	$	1,821	$	930	$	4,880	$	210	$	739	$	—	$	17,004
As of December 31, 2015
As of December 31, 2016
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	115	$	54	$	—	$	519	$	5	$	—	$	—	$	693	$	—	$	—	$	73	$	—	$	5	$	8	$	—	$	—	$	86
Collectively evaluated for impairment		5,199		1,192		1,686		1,324		5,090		137		518		18		15,164		6,227		1,255		1,844		2,233		5,137		145		559		—		17,400
Purchased credit-impaired⁽¹⁾		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total	$	5,199	$	1,307	$	1,740	$	1,324	$	5,609	$	142	$	518	$	18	$	15,857	$	6,227	$	1,255	$	1,917	$	2,233	$	5,142	$	153	$	559	$	—	$	17,486

⁽¹⁾	Purchased credit-impaired loans are evaluated for impairment on an individual basis.

The following table details the carrying value forall portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
As ofSeptember 30, 2016
As of September 30, 2017
Carrying value of loans and leases:
Individually evaluated for impairment	$	1,396	$	2,889	$	7,463	$	—	$	3,816	$	32	$	—	$	15,596	$	1,449	$	654	$	6,459	$	—	$	1,940	$	27	$	—	$	10,529
Collectively evaluated for impairment		1,077,637		203,579		410,939		133,269		559,759		23,685		56,267		2,465,135		1,214,225		206,232		416,065		133,505		594,260		31,279		60,870		2,656,436
Purchased credit-impaired⁽¹⁾		10,588		110		6		—		1,922		—		—		12,626		8,897		88		—		—		1,395		—		—		10,380
Total	$	1,089,621	$	206,578	$	418,408	$	133,269	$	565,497	$	23,717	$	56,267	$	2,493,357	$	1,224,571	$	206,974	$	422,524	$	133,505	$	597,595	$	31,306	$	60,870	$	2,677,345
As of December 31, 2015
As of December 31, 2016
Carrying value of loans and leases:
Individually evaluated for impairment	$	349	$	1,980	$	7,754	$	33	$	4,240	$	30	$	—	$	14,386	$	1,576	$	2,354	$	7,266	$	—	$	2,946	$	31	$	—	$	14,173
Collectively evaluated for impairment		952,448		207,378		398,635		89,625		515,784		22,099		51,787		2,237,756		1,098,788		205,540		406,271		141,964		575,055		25,310		55,892		2,508,820
Purchased credit-impaired⁽¹⁾		11,462		115		15		763		4,491		—		—		16,846		10,534		105		3		—		1,790		—		—		12,432
Total	$	964,259	$	209,473	$	406,404	$	90,421	$	524,515	$	22,129	$	51,787	$	2,268,988	$	1,110,898	$	207,999	$	413,540	$	141,964	$	579,791	$	25,341	$	55,892	$	2,535,425

⁽¹⁾	Purchased credit-impaired loans are evaluated for impairment on an individual basis.

Page 19

The following table details the allocation of the Allowance fororiginated portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
As ofSeptember 30, 2016
As of September 30, 2017
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	46	$	—	$	519	$	6	$	—	$	—	$	571	$	—	$	3	$	69	$	—	$	—	$	4	$	—	$	—	$	76
Collectively evaluated for impairment		6,269		1,212		1,917		2,116		4,930		138		563		—		17,145		7,332		1,089		1,705		930		4,880		206		739		—		16,881
Total	$	6,269	$	1,212	$	1,963	$	2,116	$	5,449	$	144	$	563	$	—	$	17,716	$	7,332	$	1,092	$	1,774	$	930	$	4,880	$	210	$	739	$	—	$	16,957
As of December 31, 2015
As of December 31, 2016
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	115	$	54	$	—	$	519	$	5	$	—	$	—	$	693	$	—	$	—	$	45	$	—	$	5	$	8	$	—	$	—	$	58
Collectively evaluated for impairment		5,199		1,192		1,686		1,324		5,090		137		518		18		15,164		6,227		1,255		1,844		2,233		5,137		145		559		—		17,400
Total	$	5,199	$	1,307	$	1,740	$	1,324	$	5,609	$	142	$	518	$	18	$	15,857	$	6,227	$	1,255	$	1,889	$	2,233	$	5,142	$	153	$	559	$	—	$	17,458

~~Page 19~~

The following table details the carrying value fororiginated portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
As ofSeptember 30, 2016
As of September 30, 2017
Carrying value of loans and leases:
Individually evaluated for impairment	$	1,340	$	2,783	$	4,319	$	—	$	2,599	$	32	$	—	$	11,073	$	1,400	$	388	$	3,153	$	—	$	1,287	$	27	$	—	$	6,255
Collectively evaluated for impairment		918,965		171,990		340,221		133,269		521,199		23,565		56,267		2,165,476		1,087,969		181,913		359,084		133,505		572,319		31,139		60,870		2,426,799
Total	$	920,305	$	174,773	$	344,540	$	133,269	$	523,798	$	23,597	$	56,267	$	2,176,549	$	1,089,369	$	182,301	$	362,237	$	133,505	$	573,606	$	31,166	$	60,870	$	2,433,054
As of December 31, 2015
As of December 31, 2016
Carrying value of loans and leases:
Individually evaluated for impairment	$	279	$	1,832	$	4,394	$	33	$	3,229	$	30	$	—	$	9,797	$	1,521	$	2,319	$	4,111	$	—	$	1,190	$	31	$	—	$	9,172
Collectively evaluated for impairment		772,292		169,357		312,093		87,122		459,517		21,904		51,787		1,874,072		945,358		176,131		338,157		141,964		549,144		25,169		55,892		2,231,815
Total	$	772,571	$	171,189	$	316,487	$	87,155	$	462,746	$	21,934	$	51,787	$	1,883,869	$	946,879	$	178,450	$	342,268	$	141,964	$	550,334	$	25,200	$	55,892	$	2,240,987

Page 20

The following table details the allocation of the Allowance foracquired portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
As ofSeptember 30, 2016
As of September 30, 2017
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	28	$	—	$	—	$	—	$	—	$	—	$	28	$	—	$	—	$	47	$	—	$	—	$	—	$	—	$	—	$	47
Collectively evaluated for impairment		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Purchased credit-impaired⁽¹⁾		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	28	$	—	$	—	$	—	$	—	$	—	$	28	$	—	$	—	$	47	$	—	$	—	$	—	$	—	$	—	$	47
As of December 31, 2015
As of December 31, 2016
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	28	$	—	$	—	$	—	$	—	$	—	$	28
Collectively evaluated for impairment		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Purchased credit-impaired⁽¹⁾		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	28	$	—	$	—	$	—	$	—	$	—	$	28

⁽¹⁾	Purchased credit-impaired loans are evaluated for impairment on an individual basis.

The following table details the carrying value foracquired portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total		Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
As ofSeptember 30, 2016
As of September 30, 2017
Carrying value of loans and leases:
Individually evaluated for impairment	$	56	$	106	$	3,144	$	—	$	1,217	$	—	$	—	$	4,523	$	49	$	266	$	3,306	$	—	$	653	$	—	$	—	$	4,274
Collectively evaluated for impairment		158,672		31,589		70,718		—		38,560		120		—		299,659		126,256		24,319		56,981		—		21,941		140		—		229,637
Purchased credit-impaired⁽¹⁾		10,588		110		6		—		1,922		—		—		12,626		8,897		88		—		—		1,395		—		—		10,380
Total	$	169,316	$	31,805	$	73,868	$	—	$	41,699	$	120	$	—	$	316,808	$	135,202	$	24,673	$	60,287	$	—	$	23,989	$	140	$	—	$	244,291
As of December 31, 2015
As of December 31, 2016
Carrying value of loans and leases:
Individually evaluated for impairment	$	70	$	148	$	3,360	$	—	$	1,011	$	—	$	—	$	4,589	$	55	$	35	$	3,155	$	—	$	1,756	$	—	$	—	$	5,001
Collectively evaluated for impairment		180,156		38,021		86,542		2,503		56,267		195		—		363,684		153,430		29,409		68,114		—		25,911		141		—		277,005
Purchased credit-impaired⁽¹⁾		11,462		115		15		763		4,491		—		—		16,846		10,534		105		3		—		1,790		—		—		12,432
Total	$	191,688	$	38,284	$	89,917	$	3,266	$	61,769	$	195	$	—	$	385,119	$	164,019	$	29,549	$	71,272	$	—	$	29,457	$	141	$	—	$	294,438

⁽¹⁾	Purchased credit-impaired loans are evaluated for impairment on an individual basis.

Page 2021

As part of the process of determining the Allowance for the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by both in-house staff as well as external loan reviewers. The result of these reviews is reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:

Pass – Loans considered satisfactory with no indications of deterioration.

Special mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

In addition, for the remaining segments of the loan and lease portfolio, which include residential mortgage, home equity lines and loans, consumer, and leases, the credit quality indicator used to determine this component of the Allowance is based on performance status.

The following tables detail the carrying value ofall portfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

Credit Risk Profile by Internally Assigned Grade

(dollars in thousands)

Commercial Mortgage

Construction

Commercial and Industrial

Total

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

Pass
$ 1,077,611 $ 946,887 $ 130,993 $ 88,653 $ 554,451 $ 510,040 $ 1,763,055 $ 1,545,580
Special Mention
1,257 7,029 — — 1,953 1,123 3,210 8,152
Substandard
10,753 10,343 2,276 1,768 7,400 13,352 20,429 25,463
Doubtful
— — — — 1,693 — 1,693 —
Total
$ 1,089,621 $ 964,259 $ 133,269 $ 90,421 $ 565,497 $ 524,515 $ 1,788,387 $ 1,579,195

Credit Risk Profile by Payment Activity

(dollars in thousands)

Residential Mortgage

Home Equity Lines and Loans

Consumer

Leases

Total

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

September 30, 2016

December 31, 2015

Performing
$ 415,563 $ 403,192 $ 203,751 $ 207,446 $ 23,715 $ 22,129 $ 56,157 $ 51,778 $ 699,186 $ 684,545
Non-performing
2,845 3,212 2,827 2,027 2 — 110 9 5,784 5,248
Total
$ 418,408 $ 406,404 $ 206,578 $ 209,473 �� $ 23,717 $ 22,129 $ 56,267 $ 51,787 $ 704,970 $ 689,793

	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)	Commercial Mortgage				Construction				Commercial and Industrial				Total
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Pass	$	1,215,039	$	1,099,557	$	130,398	$	140,370	$	591,495	$	570,342	$	1,936,932	$	1,810,269
Special Mention		—		1,892		—		—		1,332		2,315		1,332		4,207
Substandard		9,532		9,449		3,107		1,594		4,249		5,512		16,888		16,555
Doubtful		—		—		—		—		519		1,622		519		1,622
Total	$	1,224,571	$	1,110,898	$	133,505	$	141,964	$	597,595	$	579,791	$	1,955,671	$	1,832,653

Credit Risk Profile by Payment Activity
(dollars in thousands)	Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Performing	$	420,935	$	410,882	$	206,361	$	205,710	$	31,606	$	25,339	$	60,770	$	55,755	$	719,372	$	697,686
Non-performing		1,589		2,658		613		2,289		—		2		100		137		2,302		5,086
Total	$	422,524	$	413,540	$	206,974	$	207,999	$	31,606	$	25,341	$	60,870	$	55,892	$	721,674	$	702,772

The following tables detail the carrying value oforiginatedportfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

	Credit Risk Profile by Internally Assigned Grade
																	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)	Commercial Mortgage				Construction				Commercial and Industrial				Total				Commercial Mortgage				Construction				Commercial and Industrial				Total
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Pass	$	910,554	$	758,240	$	130,993	$	86,065	$	517,761	$	454,454	$	1,559,308	$	1,298,759	$	1,081,187	$	936,737	$	130,398	$	140,370	$	570,427	$	544,876	$	1,782,012	$	1,621,983
Special Mention		1,257		7,029		—		—		1,845		1,015		3,102		8,044		—		1,892		—		—		1,332		2,279		1,332		4,171
Substandard		8,493		7,302		2,276		1,090		4,067		7,277		14,836		15,669		8,182		8,250		3,107		1,594		1,494		3,054		12,783		12,898
Doubtful		—		—		—		—		125		—		125		—		—		—		—		—		354		125		354		125
Total	$	920,304	$	772,571	$	133,269	$	87,155	$	523,798	$	462,746	$	1,577,371	$	1,322,472	$	1,089,369	$	946,879	$	133,505	$	141,964	$	573,607	$	550,334	$	1,796,481	$	1,639,177

Page 2122

Credit Risk Profile by Payment Activity	Credit Risk Profile by Payment Activity																					Credit Risk Profile by Payment Activity

(dollars in thousands)		Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
(dollars in thousands)																							Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015			September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Performing		$	342,689	$	314,523	$	172,141	$	169,401	$	23,595	$	21,934	$	56,157	$	51,778	$	594,582	$	557,636		$	361,779	$	340,615	$	182,031	$	176,281	$	31,165	$	25,198	$	60,770	$	55,755	$	635,745	$	597,849
Non-performing			1,851		1,964		2,633		1,788		2		—		110		9		4,596		3,761			458		1,653		270		2,169		—		2		100		137		828		3,961
Total		$	344,540	$	316,487	$	174,774	$	171,189	$	23,597	$	21,934	$	56,267	$	51,787	$	599,178	$	561,397		$	362,237	$	342,268	$	182,301	$	178,450	$	31,165	$	25,200	$	60,870	$	55,892	$	636,573	$	601,810

The following tables detail the carrying value ofacquiredportfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, ~~2016~~2017 and December 31, ~~2015:~~2016:

	Credit Risk Profile by Internally Assigned Grade
																	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)	Commercial Mortgage				Construction				Commercial and Industrial				Total				Commercial Mortgage				Construction				Commercial and Industrial				Total
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Pass	$	167,057	$	188,647	$	—	$	2,588	$	36,690	$	55,586	$	203,747	$	246,821	$	133,852	$	162,820	$	—	$	—	$	21,068	$	25,466	$	154,920	$	188,286
Special Mention		—		—		—		—		108		108		108		108		—		—		—		—		—		36		—		36
Substandard		2,260		3,041		—		678		3,333		6,075		5,593		9,794		1,350		1,199		—		—		2,755		2,458		4,105		3,657
Doubtful		—		—		—		—		1,568		—		1,568		—		—		—		—		—		165		1,497		165		1,497
Total	$	169,317	$	191,688	$	—	$	3,266	$	41,699	$	61,769	$	211,016	$	256,723	$	135,202	$	164,019	$	—	$	—	$	23,988	$	29,457	$	159,190	$	193,476

Credit Risk Profile by Payment Activity
																	Credit Risk Profile by Payment Activity
(dollars in thousands)	Residential Mortgage				Home Equity Lines and Loans				Consumer				Total				Residential Mortgage				Home Equity Lines and Loans				Consumer				Total
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Performing	$	72,874	$	88,669	$	31,610	$	38,045	$	120	$	195	$	104,604	$	126,909	$	59,156	$	70,267	$	24,330	$	29,429	$	141	$	141	$	83,627	$	99,837
Non-performing		994		1,248		194		239		—		—		1,188		1,487		1,131		1,005		343		120		—		—		1,474		1,125
Total	$	73,868	$	89,917	$	31,804	$	38,284	$	120	$	195	$	105,792	$	128,396	$	60,287	$	71,272	$	24,673	$	29,549	$	141	$	141	$	85,101	$	100,962

G. ~~Troubled~~Troubled Debt Restructurings (“TDRs”)

The restructuring of a loan is considered a “troubled debt restructuring” if both of the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the creditor has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan, and (e) for leases, a reduced lease payment. A less common concession granted is the forgiveness of a portion of the principal.

The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower, were a concession not granted. Similarly, the determination of whether a concession has been granted is very subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender.

The following table presents the balance of TDRs as of the indicated dates:

(dollars in thousands)	September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016
TDRs included in nonperforming loans and leases	$	1,680	$	1,935	$	2,033	$	2,632
TDRs in compliance with modified terms		6,305		4,880		6,597		6,395
Total TDRs	$	7,985	$	6,815	$	8,630	$	9,027

Page 2223

The following ~~tables~~table presents information regarding loan and lease modifications categorized as TDRs for the three ~~and nine~~ months ended September 30, ~~2016:~~2017:

For the Three Months Ended September 30, 2016

(dollars in thousands)

Number of Contracts

Pre-Modification
Outstanding
Recorded Investment

Post-Modification Outstanding
Recorded Investment

Commercial mortgage
1 $ 1,257 $ 1,257
Home equity loans and lines
2 53 53
Leases
2 88 88
Total
5 $ 1,398 $ 1,398

	For the Nine Months Ended September 30, 2016						For the Three Months Ended September 30, 2017
(dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial mortgage		1	$	1,257	$	1,257
Home equity loans and lines		5		257		210
Residential mortgage		1		27		27		2	$	240	$	240
Leases		4		156		156		2		28		28
Total		11	$	1,697	$	1,650		4	$	268	$	268

The following ~~tables~~table presents information regarding the types of loan and lease modifications made for the three months ended September 30, 2017:

	Number of Contracts for the Three Months Ended September 30, 2017
	Interest Rate Change		Loan Term Extension		Interest Rate Change and Term Extension		Interest Rate Change and/or Interest- Only Period		Contractual Payment Reduction (Leases only)		Forgiveness of Interest		Forgiveness of Principal
Residential mortgage		—		1		1		—		—		—		—
Leases		—		—		—		—		2		—		—
Total		—		1		1		—		2		—		—

The following table presents information regarding loan and lease modifications categorized as TDRs for the nine months ended September 30, ~~2016:~~2017:

Number of Contracts for the Three Months Ended September 30, 2016

Interest
Rate
Change

Loan Term Extension

Interest Rate Change and
Term Extension

Interest Rate Change
and/or
Interest-Only Period

Contractual Payment
Reduction
(Leases only)

Forgiveness
of Interest

Forgiveness
of Principal

Commercial mortgage
— 1 — — — — —
Home equity loans and lines
— — 2 — — — —
Leases
— — — — 2 — —
Total
— 1 2 — 2 — —

	Number of Contracts for the Nine Months Ended September 30, 2016														For the Nine Months Ended September 30, 2017
	Interest Rate Change		Loan Term Extension		Interest Rate Change and Term Extension		Interest Rate Change and/or Interest-Only Period		Contractual Payment Reduction (Leases only)		Forgiveness of Interest		Forgiveness of Principal
Commercial mortgage		—		1		—		—		—		—		—
(dollars in thousands)															Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Home equity loans and lines		—		—		2		2		—		—		1		1	$	8	$	8
Residential mortgage		—		—		1		—		—		—		—		3		442		442
Leases		—		—		—		—		4		—		—		4		87		87
Total		—		1		3		2		4		—		1		8	$	537	$	537

~~During~~The following table presents information regarding the types of loan and lease modifications made for the nine months ended September 30, 2017:

	Number of Contracts for the Nine Months Ended September 30, 2017
	Interest Rate Change		Loan Term Extension		Interest Rate Change and Term Extension		Interest Rate Change and/or Interest- Only Period		Contractual Payment Reduction (Leases only)		Forgiveness of Interest		Forgiveness of Principal
Home equity loans and lines		1		—		—		—		—		—		—
Residential mortgage		1		1		1		—		—		—		—
Leases		—		—		—		—		4		—		—
Total		2		1		1		—		4		—		—

During the three and nine months ended September 30, ~~2016, there were no defaults~~2017, one commercial and industrial loan with a principal balance of ~~loans or leases that~~$63 thousand which had been previously modified to a troubled debt ~~restructurings.~~restructurings defaulted and was charged off.

Page 2324

H. Impaired Loans

The following tables detail the recorded investment and principal balance of impaired loans by ~~portfolio~~portfolio segment, their related Allowance and interest income recognized as of the dates or for the periods indicated:

(dollars in thousands)	Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized		Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
As of or for the three months endedSeptember 30, 2016
As of or for the three months ended September 30, 2017
Impaired loans with related Allowance:
Home equity lines and loans													$	21	$	21	$	3	$	21	$	—	$	—
Residential mortgage	$	624	$	624	$	74	$	638	$	7	$	—		1,770		1,770		116		1,776		23		—
Commercial and industrial		1,832		1,832		519		1,901		1		—
Consumer		30		30		6		31		—		—		27		27		4		28		—		—
Total	$	2,486	$	2,486	$	599	$	2,570	$	8	$	—	$	1,818	$	1,818	$	123	$	1,825	$	23	$	—

Impaired loans without related Allowance^{(1) (3)}:
Commercial mortgage	$	1,395	$	1,395	$	—	$	1,398	$	15	$	—	$	1,449	$	1,485	$	—	$	1,451	$	15	$	—
Home equity lines and loans		2,891		3,498		—		3,651		1		—		633		694		—		655		1		—
Residential mortgage		6,838		7,170		—		8,136		53		—		4,688		5,015		—		4,243		43		—
Commercial and industrial		1,984		2,544		—		3,799		1		—		1,940		2,796		—		2,605		2		—
Consumer		2		2		—		2		—		—
Total	$	13,110	$	14,609	$	—	$	16,986	$	70	$	—	$	8,710	$	9,990	$	—	$	8,954	$	61	$	—

Grand total	$	15,596	$	17,095	$	599	$	19,556	$	78	$	—	$	10,528	$	11,808	$	123	$	10,779	$	84	$	—

⁽¹⁾	The table above does not include the recorded investment of $~~203~~$270 thousand of impaired leases without a related Allowance.

⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

⁽³⁾	This table excludes all purchased credit-impaired loans, which are discussed in Note 5D, above.

(dollars in thousands)

Recorded
Investment⁽²⁾

Principal
Balance

Related
Allowance

Average
Principal
Balance

Interest
Income
Recognized

Cash-Basis
Interest
Income
Recognized

As of or for the nine months ended September 30, 2016

Impaired loans with related Allowance:

Residential mortgage
$ 624 $ 624 $ 74 $ 640 $ 21 $ —
Commercial and industrial
1,832 1,832 519 1,944 4 —
Consumer
30 30 6 32 1 —
Total
$ 2,486 $ 2,486 $ 599 $ 2,616 $ 26 $ —

Impaired loans without related Allowance^{(1) (3)}:

Commercial mortgage
$ 1,395 $ 1,395 $ — $ 1,399 $ 46 $ —
Home equity lines and loans
2,891 3,498 — 3,675 22 —
Residential mortgage
6,838 7,170 — 8,131 164 —
Commercial and industrial
1,984 2,544 — 4,246 30 —
Consumer
2 2 — 2 — —
Total
$ 13,110 $ 14,609 $ — $ 17,453 $ 262 $ —

Grand total
$ 15,596 $ 17,095 $ 599 $ 20,069 $ 288 $ —

(dollars in thousands)	Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
As of or for the nine months ended September 30, 2017
Impaired loans with related Allowance:
Home equity lines and loans	$	21	$	21	$	3	$	21	$	1	$	—
Residential mortgage		1,770		1,770		116		1,797		67		—
Consumer		27		27		4		28		1		—
Total	$	1,818	$	1,818	$	123	$	1,846	$	69	$	—

Impaired loans without related Allowance^{(1) (3)}:
Commercial mortgage	$	1,449	$	1,485	$	—	$	1,475	$	45	$	—
Home equity lines and loans		633		694		—		669		5		—
Residential mortgage		4,688		5,015		—		4,288		118		—
Commercial and industrial		1,940		2,796		—		2,746		34		—
Total	$	8,710	$	9,990	$	—	$	9,178	$	202	$	—

Grand total	$	10,528	$	11,808	$	123	$	11,024	$	271	$	—

⁽¹⁾	The table above does not include the recorded investment ~~of $~~~~203~~ ~~thousand~~of$270thousand of impaired leases without a related ~~Allowance.~~Allowance.

⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

⁽³⁾	~~This~~ This table excludes all purchased credit-impaired loans, which are discussed in Note ~~5D,~~5D, above.

Page 2425

(dollars in thousands)	Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized		Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
As of or for the three months endedSeptember 30, 2015
As of or for the three months ended September 30, 2016
Impaired loans with related Allowance:
Residential mortgage	$	707	$	721	$	76	$	723	$	8	$	—	$	624	$	624	$	74	$	638	$	7	$	—
Commercial and industrial		2,988		3,077		629		3,278		13		—		1,832		1,832		519		1,901		1		—
Consumer		33		32		7		33		—		—		30		30		6		31		—		—
Total	$	3,728	$	3,830	$	712	$	4,034	$	21	$	—	$	2,486	$	2,486	$	599	$	2,570	$	8	$	—

Impaired loans without related Allowance^{(1) (3)}:
Commercial mortgage	$	444	$	453	$	—	$	461	$	—	$	—	$	1,395	$	1,395	$	—	$	1,398	$	15	$	—
Home equity lines and loans		1,758		1,764		—		1,886		1		—		2,891		3,498		—		3,651		1		—
Residential mortgage		7,374		8,263		—		8,643		31		—		6,838		7,170		—		8,136		53		—
Construction		34		804		—		879		—		—
Commercial and industrial		2,025		2,084		—		2,182		1		—		1,984		2,544		—		3,799		1		—
Consumer														2		2		—		2		—		—
Total	$	11,635	$	13,368	$	—	$	14,051	$	33	$	—	$	13,110	$	14,609	$	—	$	16,986	$	70	$	—

Grand total	$	15,363	$	17,198	$	712	$	18,085	$	54	$	—	$	15,596	$	17,095	$	599	$	19,556	$	78	$	—

⁽¹⁾	The table above does not ~~include~~include the recorded investment of$~~178~~ $203 thousand of impaired leases without a related Allowance.

⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

⁽³⁾	This table excludes all purchased credit-impaired loans, which are discussed in Note 5D, above.

~~Page 25~~

(dollars in thousands)	Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized		Recorded Investment⁽²⁾		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
As of or for thenine months endedSeptember 30, 2015
As of or for the nine months ended September 30, 2016
Impaired loans with related Allowance:
Residential mortgage	$	707	$	721	$	76	$	726	$	25	$	—	$	624	$	624	$	74	$	640	$	21	$	—
Commercial and industrial		2,988		3,077		629		3,225		39		—		1,832		1,832		519		1,944		4		—
Consumer		33		32		7		33		1		—		30		30		6		32		1		—
Total	$	3,728	$	3,830	$	712	$	3,984	$	65	$	—	$	2,486	$	2,486	$	599	$	2,616	$	26	$	—

Impaired loans without related Allowance^{(1) (3)}:
Commercial mortgage	$	444	$	453	$	—	$	461	$	—	$	—	$	1,395	$	1,395	$	—	$	1,399	$	46	$	—
Home equity lines and loans		1,758		1,764		—		1,900		4		—		2,891		3,498		—		3,675		22		—
Residential mortgage		7,374		8,263		—		8,687		92		—		6,838		7,170		—		8,131		164		—
Construction		34		804		—		926		—		—
Commercial and industrial		2,025		2,084		—		1,727		4		—		1,984		2,544		—		4,246		30		—
Consumer														2		2		—		2		—		—
Total	$	11,635	$	13,368	$	—	$	13,701	$	100	$	—	$	13,110	$	14,609	$	—	$	17,453	$	262	$	—

Grand total	$	15,363	$	17,198	$	712	$	17,685	$	165	$	—	$	15,596	$	17,095	$	599	$	20,069	$	288	$	—

⁽¹⁾	The table above does not include the ~~recorded~~recorded investment of$~~178~~ $203 thousand of impaired leases without a related Allowance.

⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

⁽³⁾	~~This table excludes all purchased credit-impaired loans, which are discussed in Note 5D, above.~~

(dollars in thousands)

Recorded
Investment⁽²⁾

Principal
Balance

Related
Allowance

As of December 31, 2015

Impaired loans with related allowance:

Home equity lines and loans
$ 115 $ 115 $ 115
Residential mortgage
515 527 54
Commercial and industrial
2,011 2,002 519
Consumer
30 30 5
Total
$ 2,671 $ 2,674 $ 693

Impaired loans⁽¹⁾⁽³⁾ without related allowance:

Commercial mortgage
$ 349 $ 358 $ —
Home equity lines and loans
1,865 2,447 —
Residential mortgage
7,239 8,166 —
Construction
33 996 —
Commercial and industrial
2,229 3,089 —
Total
$ 11,715 $ 15,056 $ —

Grand total
$ 14,386 $ 17,730 $ 693

⁽¹⁾	~~The table above does not include the recorded investment of $77 thousand of impaired leases without a related Allowance.~~

⁽²⁾	~~Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.~~

⁽³⁾	This table excludes all purchased credit-impaired loans, which are discussed in Note 5D, above.

Page 26

(dollars in thousands)	Recorded Investment⁽²⁾		Principal Balance		Related Allowance
As of December 31, 2016
Impaired loans with related allowance:
Residential mortgage	$	622	$	622	$	73
Commercial and industrial		84		84		5
Consumer		31		31		8
Total	$	737	$	737	$	86

Impaired loans⁽¹⁾⁽³⁾ without related allowance:
Commercial mortgage	$	1,577	$	1,577	$	—
Home equity lines and loans		2,354		2,778		—
Residential mortgage		6,644		6,970		—
Commercial and industrial		2,862		3,692		—
Total	$	13,437	$	15,017	$	—
Grand total	$	14,174	$	15,754	$	86

⁽¹⁾	The table above does not include the recorded investment of $240 thousand of impaired leases without a related Allowance.

⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

⁽³⁾	This table excludes all purchased credit-impaired loans, which are discussed in Note 5D, above.

II. . Loan Mark

Loans acquired in mergers and acquisitions are recorded at fair value as of the date of the transaction. This adjustment to the acquired principal amount is referred to as the “Loan Mark”. With the exception of purchased credit impaired loans, whose Loan Mark is accounted for under ASC 310-30, the Loan Mark is amortized or accreted as an adjustment to yield over the lives of the loans. The following tables detail, foracquired loans, the outstanding principal, remaining loan mark, and recorded investment, by portfolio segment, as of the dates indicated:

(dollars in thousands)	As of September 30, 2017
	Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	138,926	$	(3,724	)	$	135,202
Home equity lines and loans		26,181		(1,508	)		24,673
Residential mortgage		62,455		(2,168	)		60,287
Commercial and industrial		26,790		(2,802	)		23,988
Consumer		162		(21	)		141
Total	$	254,514	$	(10,223	)	$	244,291

(dollars in thousands)

As of September 30, 2016

Outstanding Principal

Remaining Loan Mark

Recorded Investment

Commercial mortgage
$ 174,072 $ (4,755
)
$ 169,317
Home equity lines and loans
33,570 (1,766
)
31,804
Residential mortgage
76,599 (2,731
)
73,868
Commercial and industrial
45,815 (4,116
)
41,699
Consumer
142 (22
)
120
Total
$ 330,198 $ (13,390
)
$ 316,808

(dollars in thousands)	As of December 31, 2015							As of December 31, 2016
	Outstanding Principal		Remaining Loan Mark			Recorded Investment		Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	197,532	$	(5,844	)	$	191,688	$	168,612	$	(4,593	)	$	164,019
Home equity lines and loans		40,258		(1,974	)		38,284		31,236		(1,687	)		29,549
Residential mortgage		93,230		(3,313	)		89,917		73,902		(2,630	)		71,272
Construction		3,807		(541	)		3,266
Commercial and industrial		67,181		(5,412	)		61,769		32,812		(3,355	)		29,457
Consumer		220		(25	)		195		163		(22	)		141
Total	$	402,228	$	(17,109	)	$	385,119	$	306,725	$	(12,287	)	$	294,438

Page 27

Note 6 - Deposits

~~The~~The following table details the components of deposits:

(dollars in thousands)

September 30, 2016

December 31, 2015

Interest-bearing checking accounts
$ 333,055 $ 338,861
Money market accounts
725,116 749,726
Savings accounts
228,391 187,299
Wholesale non-maturity deposits
64,664 67,717
Wholesale time deposits
99,052 53,185
Time deposits
309,584 229,253
Total interest-bearing deposits
1,759,862 1,626,041
Non-interest-bearing deposits
718,015 626,684
Total deposits
$ 2,477,877 $ 2,252,725

~~Page 27~~

~~Note 7 - Borrowings~~

(dollars in thousands)	September 30, 2017		December 31, 2016

Interest-bearing checking accounts	$	395,383	$	379,424
Money market accounts		720,613		761,657
Savings accounts		264,273		232,193
Wholesale non-maturity deposits		48,620		74,272
Wholesale time deposits		178,610		73,037
Time deposits		316,068		322,912
Total interest-bearing deposits		1,923,567		1,843,495
Non-interest-bearing deposits		760,614		736,180
Total deposits	$	2,684,181	$	2,579,675

Note 7 -Borrowings

A. Short-term borrowings

The ~~Corporation’s~~Corporation’s short-term borrowings (original maturity of one year or less), which consist of a revolving line of credit with a correspondent bank, funds obtained from overnight repurchase agreements with commercial customers, FHLB advances with original maturities of one year or less and overnight fed funds, are detailed below.

A summary of short-term borrowings is as follows:

(dollars in thousands)	September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016
Repurchase agreements* – commercial customers	$	25,065	$	29,156	$	18,874	$	39,151
Repurchase agreement** – correspondent bank		—		5,011
Short-term FHLB advances		25,000		30,000		162,000		165,000
Overnight federal funds		—		30,000		—		—
Total short-term borrowings	$	50,065	$	94,167	$	180,874	$	204,151

* ~~overnight~~Overnight repurchase agreements with no expiration date

** overnight repurchase agreement, expired January 2016

The following table sets forth information concerning short-term borrowings:

(dollars in thousands)	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Balance at period-end	$	50,065		$	24,264		$	50,065		$	24,264		$	180,874		$	50,065		$	180,874		$	50,065
Maximum amount outstanding at any month-end		50,065			28,220			54,715			38,546			184,578			50,065			184,578			54,715
Average balance outstanding during the period		40,966			39,352			35,836			28,166
Average balance outstanding during the period														182,845			40,966			110,268			35,836
Weighted-average interest rate:
As of period-end		0.32	%		0.10	%		0.32	%		0.10	%		1.17	%		0.32	%		1.17	%		0.32	%
Paid during the period		0.33	%		0.11	%		0.26	%		0.13	%		1.19	%		0.33	%		0.98	%		0.26	%

B. Long-term FHLB Advances ~~and Other Borrowings~~

The ~~Corporation’s~~Corporation’s long-term FHLB advances ~~and other borrowings consist~~are comprised of advances from the FHLB with original maturities of greater than one ~~year and an adjustable-rate commercial loan from a correspondent bank.~~year.

~~The~~The following table presents the remaining periods until maturity of the long-term FHLB ~~advances and other borrowings:~~advances:

(dollars in thousands)	September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016
Within one year	$	70,000	$	75,000	$	76,411	$	75,000
Over one year through five years		134,772		179,863		58,240		114,742
Total	$	204,772	$	254,863
Total long-term FHLB advances					$	134,651	$	189,742

Page 28

The following table presents rate and maturity information on long-term FHLB ~~advances and other borrowings:~~advances:

(dollars in thousands)	Maturity Range⁽¹⁾		Weighted			Coupon Rate⁽¹⁾						Balance				Maturity Range⁽¹⁾		Weighted			Coupon Rate⁽¹⁾						Balance
Description	From	To	Average Rate⁽¹⁾			From			To			September 30, 2016		December 31, 2015		From	To	Average Rate⁽¹⁾			From			To			September 30, 2017		December 31, 2016
Bullet maturity – fixed rate	10/31/2016	12/09/2020		1.42	%		0.80	%		2.13	%	$	168,612	$	198,612	12/29/2017	12/09/2020		1.60	%		0.95	%		2.13	%	$	98,612	$	153,612
Bullet maturity – variable rate	11/28/2017	11/28/2017		0.98	%		0.98	%		0.98	%		15,000		35,000	11/28/2017	11/28/2017		1.46	%		1.46	%		1.46	%		15,000		15,000
Convertible-fixed⁽²⁾	01/03/2018	08/20/2018		2.94	%		2.58	%		3.50	%		21,160		21,251	01/03/2018	08/20/2018		2.94	%		2.58	%		3.50	%		21,039		21,130
Total												$	204,772	$	254,863												$	134,651	$	189,742

⁽¹⁾Maturity range, weighted average rate and coupon rate range refers to September 30, ~~2016~~2017 balances
⁽²⁾⁽²⁾FHLB advances whereby the FHLB has the option, at predetermined times, to convert the fixed interest rate to an adjustable interest rate indexed to the London Interbank Offered Rate (“LIBOR”). The Corporation has the option to prepay these advances, without penalty, if the FHLB elects to convert the interest rate to an adjustable rate. As of September 30, ~~2016,~~2017, substantially all FHLB advances with this convertible feature are subject to conversion in fiscal ~~2016.~~2017. These advances are included in the maturity ranges in which they mature, rather than the period in which they are subject to ~~conversion.~~conversion
.

~~Page 28~~

C. Other Borrowings Information

As of September 30, ~~2016~~2017, the Corporation had a maximum borrowing capacity with the FHLB of ~~approximately $1.22~~$1.28 billion, of which the unused capacity was ~~$971.2 million.~~1.03 billion. In addition, there were unused capacities of $79.0 million in overnight federal funds ~~line, $137.7~~lines, $125.1 million of Federal Reserve Discount Window borrowings and $5.0 million in a revolving line of credit from a correspondent ~~bank as of September 30, 2016.~~bank. In connection with its FHLB borrowings, the Corporation is required to hold the capital stock of the FHLB. The amount of FHLB capital stock held was ~~$13.2~~$16.2 million and ~~$12.9~~$17.3 million as of September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively. The carrying amount of the FHLB capital stock isapproximates its redemption value.

~~Note 8 – Stock-Based Compensation~~

Note 8– Stock-Based Compensation

A. General Information

Prior to April 25, 2007, all shares authorized for grant as stock-based compensation were limited to grants of stock options. On April 25, 2007, the shareholders of the Corporation approved the Corporation’s “2007 Long-Term Incentive Plan” (the “2007 LTIP”) under which a total of 428,996 shares of the Corporation’s common stock were made available for award grants. On April 28, 2010, the shareholders of the Corporation approved the Corporation’s “2010 Long Term Incentive Plan” (the “2010 LTIP”) under which a total of 445,002 shares of the Corporation’s common stock were made available for award grants. On April 30, 2015, the shareholders of the Corporation approved the Amended and Restated Bryn Mawr Bank Corporation 2010 Long-Term Incentive Plan (the “Amended 2010 LTIP”), under which the total number of shares of Corporation Common Stock made available for award grants was increased by 500,000 shares to 945,002 shares.

In addition to the shareholder-approved plans mentioned in the preceding paragraph, the Corporation periodically authorizes grants of stock-based compensation as inducement awards to new employees. This type of award does not require shareholder approval in accordance with Rule 5635(c)(4) of the Nasdaq listing rules.

Equity awards are authorized to be in the form of, among others, options to purchase the Corporation’s common stock, restricted stock ~~awards or~~ units (“~~RSAs” or “RSUs”~~RSUs”) and performance stock ~~awards or~~ units (“~~PSAs” or “PSUs”~~PSUs”).

~~RSAs and~~ RSUs have a restriction based on the passage of time. The grant date fair value of the RSUs is based on the closing price on the date of the grant.

PSUs have a restriction based on the passage of time and ~~may~~ also have a restriction based on ~~non-market-related~~a performance criteria. The ~~fair value of the RSAs and RSUs is based on the closing price on the day preceding the date of the grant.~~

~~The PSAs and PSUs also have a restriction based on the passage of time, but also have a restriction based on~~ performance criteria ~~related to~~may be a market-based criteria measured by the ~~Corporation’s~~Corporation’s total shareholder return (“TSR”) relative to the performance of the community bank index or a bank peer group for the respective period. The ~~amount of PSAs or PSUs earned will not exceed 100% of the PSAs or PSUs awarded. The~~grant date fair value of the ~~PSAs and~~ PSUs, based on the Corporation’s TSR relative to the performance of the community bank index, is calculated using the Monte Carlo Simulation method. The performance criteria may also be based on a non-market-based criteria such as return on average equity. The grant date fair value of these PSUs is based on the closing price of the Corporation’s stock on the date of the grant. PSU grants may have a vesting percent ranging from 0% to 150%.

Page 29

B. Stock Options

Stock~~B. Stock Options~~

~~Stock-based~~-based compensation cost is measured at the grant date, based on the fair value of the award and is recognized as an expense over the vesting period. The fair value of stock option grants is determined using the Black-Scholes pricing model. The assumptions necessary for the calculation of the fair value ~~are~~include expected life of options, annual volatility of stock price, risk-free interest rate and annual dividend yield.

The following table provides information about options outstanding for the three months ended September 30, ~~2016:~~2017:

	Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Options outstanding, June 30, 2016		258,050		$	21.03	$	5.37
Options outstanding, June 30, 2017									139,834		$	20.65	$	4.85
Forfeited		—		$	—	$	—		—		$	—	$	—
Expired		—		$	—	$	—		(250	)	$	22.00	$	4.90
Exercised		(27,595	)	$	20.25	$	9.03		(12,838	)	$	22.03	$	5.11
Options outstanding, September 30, 2016		230,455		$	21.13	$	4.93
Options outstanding, September 30, 2017									126,746		$	20.51	$	4.82

~~Page 29~~

The following table provides information about options outstanding for the nine months ended September 30, ~~2016:~~2017:

	Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Options outstanding, December 31, 2015		290,853		$	20.88	$	5.77
Options outstanding, December 31, 2016									185,023		$	21.04	$	4.88
Forfeited		—		$	—	$	—		—		$	—	$	—
Expired		—		$	—	$	—		(250	)	$	22.00	$	4.90
Exercised		(60,398	)	$	19.95	$	8.96		(58,027	)	$	22.20	$	5.00
Options outstanding, September 30, 2016		230,455		$	21.13	$	4.93
Options outstanding, September 30, 2017									126,746		$	20.51	$	4.82

As of September 30, ~~2016,~~2017, there were no unvested stock options.

For the three and nine months ended September 30, ~~2016,~~2017, the Corporation did not recognize any expense related to stock options. As of September 30, ~~2016,~~2017, there was no unrecognized expense related to stock options.

~~Proceeds,~~Proceeds, related tax benefits realized from options exercised and intrinsic value of options exercised during the three and nine months ended September 30, ~~2016~~2017 and ~~2015~~2016 are detailed below:

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015		2017		2016		2017		2016
Proceeds from exercise of stock options	$	559	$	593	$	1,205	$	5,003	$	283	$	559	$	1,288	$	1,205
Related tax benefit recognized		98		71		188		653		96		98		402		188
Net proceeds of options exercised	$	657	$	664	$	1,393	$	5,656
Intrinsic value of options exercised	$	279	$	246	$	537	$	2,710
Net proceeds of options exercised									$	379	$	657	$	1,690	$	1,393
Intrinsic value of options exercised									$	273	$	279	$	1,147	$	537

The following table provides information about options outstanding and exercisable at September 30, ~~2016:~~2017:

(dollars in thousands, except exercise price)	Outstanding		Exercisable		Outstanding		Exercisable
Number of shares		230,455		230,455
Weighted average exercise price	$	21.13	$	21.13
Number of shares						126,746		126,746
Weighted average exercise price					$	20.51	$	20.51
Aggregate intrinsic value	$	2,503	$	2,503	$	2,952	$	2,952
Weighted average contractual term in years		2.1		2.1		1.5		1.5

For the three and nine months ended September 30, 2017, the Corporation recorded $74 thousand and $302 thousand, respectively, of excess tax benefits related to the exercise of stock options.

Page 30

C. Restricted Stock ~~Awards~~Units and Performance Stock ~~Awards~~Units

The Corporation has granted ~~RSAs,~~ RSUs ~~PSAs~~ and PSUs under the ~~2007 LTIP,~~ 2010 LTIP and Amended 2010 LTIP.

~~RSAs and~~ RSUs

The compensation expense for the ~~RSAs and~~ RSUs is measured based on the market price of the stock on the day prior to the grant date and is recognized on a straight line basis over the vesting period.

For the three and nine months ended September 30, ~~2016,~~2017, the Corporation recognized ~~$152~~$202 thousand and ~~$414~~$525 thousand, respectively, of expense related to the Corporation’s ~~RSAs and~~ RSUs. As of September 30, ~~2016,~~2017, there was ~~$1.4~~$1.7 million of unrecognized compensation cost related to ~~RSAs and~~ RSUs. This cost will be recognized over a weighted average period of ~~2.6~~2.4 years.

The following table details the unvested ~~RSAs and~~ RSUs for the three and nine months ended September 30, ~~2016:~~2017:

	Three Months Ended September 30, 2016					Nine Months Ended September 30, 2016					Three Months Ended September 30, 2017					Nine Months Ended September 30, 2017
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Beginning balance		39,970		$	29.02		43,802		$	28.61		55,262		$	30.95		58,862		$	29.57
Granted		28,392		$	30.29		33,142		$	29.67		22,117		$	39.35		28,317		$	39.48
Vested		(7,500	)	$	29.15		(14,832	)	$	26.88		(10,687	)	$	30.14		(16,987	)	$	29.27
Forfeited		—		$	—		(1,250	)	$	29.12		(161	)	$	30.43		(3,661	)	$	29.38
Ending balance		60,862		$	29.60		60,862		$	29.60
Ending balance												66,531		$	33.88		66,531		$	33.88

For the three and nine months ended September 30, ~~2016,~~2017, the Corporation recorded $4$42 thousand and ~~$10~~$73 thousand, respectively, of excess tax benefits related to the vesting of ~~RSAs and~~ RSUs.

~~Page 30~~

~~PSAs and~~ PSUs

The compensation expense for ~~PSAs and~~ PSUs is measured based on the grant date fair value as calculated using the Monte Carlo Simulation method.

For the three and nine months ended September 30, ~~2016,~~2017, the Corporation recognized ~~$292~~$359 thousand and ~~$819~~$951 thousand, respectively, of expense related to the ~~PSAs and~~ PSUs. As of September 30, ~~2016,~~2017, there was ~~$2.3~~$2.6 million of unrecognized compensation cost related to ~~PSAs.~~PSUs. This cost will be recognized over a weighted average period of ~~2.2~~2.0 years.

The following table details the unvested ~~PSAs and~~ PSUs for the three and nine months ended September 30, ~~2016:~~2017:

	Three Months Ended September 30, 2017					Nine Months Ended September 30, 2017
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Beginning balance		192,844		$	18.77		192,844		$	18.77
Granted		40,719		$	37.84		40,719		$	37.84
Vested		(61,815	)	$	15.05		(61,815	)	$	15.05
Forfeited		(1,335	)	$	19.46		(1,335	)	$	19.46
Ending balance		170,413		$	24.67		170,413		$	24.67

Three Months Ended
September 30, 2016

Nine Months Ended
September 30, 2016

Number of
Shares

Weighted
Average
Grant Date
Fair Value

Number of
Shares

Weighted
Average Grant
Date Fair Value

Beginning balance
214,976 $ 15.07 216,820 $ 15.07
Granted
45,346 $ 28.34 45,346 $ 28.34
Vested
(56,890 ) $ 13.38 (56,890 ) $ 13.38
Forfeited
(10,588
)
$ 13.51 (12,432
)
$ 13.75
Ending balance
192,844 $ 18.77 192,844 $ 18.77

For the three and nine months ended September 30, 2017, the Corporation recorded $578 thousand and $578 thousand, respectively, of excess tax benefits related to the vesting of PSUs.

Note 9 - Pension and Other Post-Retirement Benefit Plans

~~Prior to the December 2015 settlement of the qualified~~The Corporation has two defined ~~benefits plan (the “QDBP”), the Corporation had three defined~~ benefit ~~pension plans: the QDBP which covered all employees over age 20 1/2 who met certain service requirements, and two non-qualified defined-benefit~~ pension plans (“SERP I” and “SERP II”), both of which are non-qualified plans which are restricted to certain senior officers of the Corporation.

SERP I provides each participant with the equivalent pension benefit provided by ~~the QDBP~~a previously settled qualified defined benefit plan on any compensation and bonus deferrals that exceed the IRS limit applicable to ~~the QDBP.~~such plan.

Page 31

On February 12, 2008, the Corporation amended ~~the QDBP and~~ SERP I to freeze further increases in the ~~defined-benefit~~defined-benefit amounts to all participants, effective March 31, 2008.

On April 1, 2008, the Corporation added SERP II, a non-qualified defined-benefit plan which was restricted to certain senior officers of the Corporation. Effective January 1, 2013, the Corporation curtailed SERP II, as further increases to the defined-benefit amounts to over 20% of the participants were frozen.

On May 29, 2015, by unanimous consent, the Board of Directors of the Corporation voted to terminate the QDBP. On June 2, 2015, notices were sent to participants informing them of the termination. Final distributions to participants were completed by December 31, 2015.

The Corporation also has a postretirement medical benefit plan (“PRBP”) that covers or will cover a portion of health insurance costs of certain retired employees and a group of current employees. The PRBP was closed to new participants in 1994. In 2007, the Corporation amended the PRBP to allow for settlement of obligations to certain current and retired employees. Certain retired participant obligations were settled in 2007 and current employee obligations were settled in 2008.

~~Page 31~~

The following tables provide details of the components of the net periodic benefits cost (benefit) for the three and nine months ended September 30, ~~2016~~2017 and ~~2015:~~2016:

	Three Months EndedSeptember 30,													Three Months Ended September 30,
	SERP I and SERP II				QDBP					PRBP				SERP I and SERP II				PRBP
(dollars in thousands)	2016		2015		2016		2015			2016		2015		2017		2016		2017		2016
Service cost	$	—	$	—	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—
Interest cost		46		47		—		397			5		5		44		46		3		5
Expected return on plan assets		—		—		—		(805	)		—		—		—		—		—		—
Amortization of prior service costs		—		—		—		—			—		—		—		—		—		—
Amortization of net loss		14		16		—		479			10		9		15		14		9		10
Net periodic benefit cost	$	60	$	63	$	—	$	71		$	15	$	14	$	59	$	60	$	12	$	15

	Nine Months Ended September 30,
	SERP I and SERP II				PRBP
(dollars in thousands)	2017		2016		2017		2016
Service cost	$	—	$	—	$	—	$	—
Interest cost		132		138		9		14
Expected return on plan assets		—		—		—		—
Amortization of prior service costs		—		—		—		—
Amortization of net loss		44		43		27		30
Net periodic benefit cost	$	176	$	181	$	36	$	44

Nine Months EndedSeptember 30,

SERP I and SERP II

QDBP

PRBP

(dollars in thousands)

2016

2015

2016

2015

2016

2015

Service cost
$ — $ — $ — $ — $ — $ —
Interest cost
138 139 — 1,192 14 14
Expected return on plan assets
— — — (2,413
)
— —
Amortization of prior service costs
— — — — — —
Amortization of net loss
43 48 — 1,436 30 28
Net periodic benefit cost
$ 181 $ 187 $ — $ 215 $ 44 $ 42

~~QDBP:~~~~The QDBP was settled as of December 31, 2015. As such, no contributions were made during the three or nine months ended September 30, 2016.~~

SERP I and SERP II:The Corporation contributed ~~$70~~$65 thousand and ~~$200~~$195 thousand during the three and nine months ended September 30, ~~2016,~~2017, respectively, and is expected to contribute an additional ~~$70~~$65 thousand to the SERP I and SERP II plans for the remaining three months of ~~2016.~~2017.

PRBP:In 2005, the Corporation capped the maximum annual payment under the PRBP at 120% of the 2005 benefit. This maximum was reached in 2008 and the cap is not expected to be increased above this level.

Note 1010 - Segment Information

FASB Codification 280 – “Segment Reporting” identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s ~~Chief Operating Decision Maker,~~chief operating decision maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations.

The ~~Corporation’s~~Corporation’s Banking segment consists of commercial and retail banking. The Banking segment is evaluated as a single strategic unit which generates revenues from a variety of products and services. The Banking segment generates interest income from its lending (including leasing) and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of available for sale investment securities, gains on the sale of residential mortgage loans, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income and interchange revenue associated with its Visa Check Card offering.

The Wealth Management segment has responsibility for a number of activities within the Corporation, including trust administration, other related fiduciary services, custody, investment management and advisory services, employee benefits and IRA administration, estate settlement, tax services and brokerage. Bryn Mawr Trust of Delaware and Lau Associates are included in the Wealth Management segment of the Corporation since they have similar economic characteristics, products and services to those of the Wealth Management Division of the Corporation. Powers Craft Parker and Beard (“PCPB”), which was merged with the Corporation’s existing insurance subsidiary, Insurance Counsellors of Bryn Mawr (“ICBM”), and ~~RJM,~~the Robert J. McAllister agency (“RJM”), which was acquired on April 1, 2015, now operate under the Powers Craft Parker and Beard, Inc. name. The Wealth Management Division has assumed oversight responsibility for all insurance services of the Corporation. Prior to the PCPB and RJM acquisitions, ICBM was reported through the Banking segment. Any adjustments to prior year figures are immaterial and are not reflected in the tables below.

Page 32

The following tables detail segment information for the three and nine months ended September 30, ~~2016~~2017 and ~~2015:~~2016:

Three Months EndedSeptember 30, 2016

Three Months EndedSeptember 30, 2015

(dollars in thousands)

Banking

Wealth
Management

Consolidated

Banking

Wealth
Management

Consolidated

Net interest income
$ 26,716 $ 1 $ 26,717 $ 24,832 $ 1 $ 24,833
Less: loan loss provision
1,412 — 1,412 1,200 — 1,200
Net interest income after loan loss provision
25,304 1 25,305 23,632 1 23,633
Other income:

Fees for wealth management services
— 9,100 9100 — 9,194 9,194
Service charges on deposit accounts
688 — 688 721 — 721
Loan servicing and other fees
497 — 497 397 — 397
Net (loss) gain on sale of loans
985 — 985 685 — 685
Net (loss) gain on sale of available for sale securities
(28
)
— (28
)
60 — 60
Net (loss) gain on sale of other real estate owned
— — — — — —
Dividends on FHLB and FRB stock
277 — 277 138 — 138
Insurance commissions
— 886 886 — 1,065 1,065
Other operating income
1,447 40 1,487 1,055 35 1,090
Total other income
3,866 10,026 13,892 3,056 10,294 13,350
��
Other expenses:

Salaries & wages
7,995 3,626 11,621 7,355 3,586 10,941
Employee benefits
1,611 809 2,420 1,868 722 2,590
Occupancy & equipment
1,943 406 2,349 2,145 412 2,557
Amortization of intangible assets
217 671 888 279 674 953
Professional fees
923 14 937 839 4 843
Other operating expenses
6,412 850 7,262 6,558 961 7,519
Total other expenses
19,101 6,376 25,477 19,044 6,359 25,403
Segment profit
10,069 3,652 13,720 7,644 3,936 11,580
Intersegment (revenues) expenses*
(99
)
99 — (105
)
105 —
Pre-tax segment profit after eliminations
$ 9,970 $ 3,751 $ 13,720 $ 7,539 $ 4,041 $ 11,580
% of segment pre-tax profit after eliminations
72.7
%
27.3
%
100.0
%
65.1
%
34.9
%
100.0
%
Segment assets(dollars in millions)
$ 3,128 $ 47 $ 3,175 $ 2,913 $ 40 $ 2,953

~~Page 33~~

	Three Months Ended September 30, 2017									Three Months Ended September 30, 2016
(dollars in thousands)	Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated

Net interest income	$	29,437		$	1		$	29,438		$	26,716		$	1		$	26,717
Less: loan loss provision		1,333			—			1,333			1,412			—			1,412
Net interest income after loan loss provision		28,104			1			28,105			25,304			1			25,305
Other income:
Fees for wealth management services		—			9,651			9,651			—			9,100			9,100
Service charges on deposit accounts		676			—			676			688			—			688
Loan servicing and other fees		548			—			548			497			—			497
Net gain on sale of loans		799			—			799			879			—			879
Net gain (loss) on sale of available for sale securities		72			—			72			(28	)		—			(28	)
Net (loss) gain on sale of other real estate owned		—			—			—			—			—			—
Dividends on FHLB and FRB stock		217			—			217			277			—			277
Insurance commissions		—			1,373			1,373			—			886			886
Other operating income		2,207			41			2,248			1,447			40			1,487
Total other income		4,519			11,065			15,584			3,760			10,026			13,786

Other expenses:
Salaries & wages		9,130			4,472			13,602			7,995			3,626			11,621
Employee benefits		1,658			973			2,631			1,611			809			2,420
Occupancy & equipment		2,049			436			2,485			1,943			406			2,349
Amortization of intangible assets		197			480			677			217			671			888
Professional fees		681			58			739			923			14			937
Other operating expenses		6,899			1,151			8,050			6,306			850			7,156
Total other expenses		20,614			7,570			28,184			18,995			6,376			25,371
Segment profit		12,009			3,496			15,505			10,069			3,651			13,720
Intersegment (revenues) expenses*		(112	)		112			—			(99	)		99			—
Pre-tax segment profit after eliminations	$	11,897		$	3,608		$	15,505		$	9,970		$	3,750		$	13,720
% of segment pre-tax profit after eliminations		76.7	%		23.3	%		100.0	%		72.7	%		27.3	%		100.0	%
Segment assets (dollars in millions)	$	3,425		$	52		$	3,477		$	3,128		$	47		$	3,175

Nine Months Ended September 30, 2016

Nine Months EndedSeptember 30, 2015

(dollars in thousands)

Banking

Wealth
Management

Consolidated

Banking

Wealth
Management

Consolidated

Net interest income
$ 79,244 $ 2 $ 79,246 $ 74,696 $ 2 $ 74,698
Less: loan loss provision
3,267 — 3,267 2,619 — 2,619
Net interest income after loan loss provision
75,977 2 75,979 72,077 2 72,079
Other income:

Fees for wealth management services
— 27,363 27,363 — 27,899 27,899
Service charges on deposit accounts
2,103 — 2,103 2,185 — 2,185
Loan servicing and other fees
1,528 — 1,528 1,585 — 1,585
Net (loss) gain on sale of loans
2,641 — 2,641 2,271 — 2,271
Net (loss) gain on sale of available for sale securities
(86
)
— (86
)
873 — 873
Net (loss) gain on sale of other real estate owned
(76
)
— (76
)
90 — 90
Dividends on FHLB and FRB stock
754 — 754 1,052 — 1,052
Insurance commissions
— 3,007 3,007 — 2,903 2,903
Other operating income
3,582 104 3,686 3,321 113 3,434
Total other income
10,446 30,474 40,920 11,377 30,915 42,292

Other expenses:

Salaries & wages
24,174 11,382 35,556 22,330 10,545 32,875
Employee benefits
4,846 2,495 7,341 5,742 2,195 7,937
Occupancy & equipment
5,997 1,207 7,204 6,585 1,246 7,831
Amortization of intangible assets
655 2,013 2,668 900 1,990 2,890
Professional fees
2,619 77 2,696 2,260 83 2,343
Other operating expenses
18,505 2,817 21,322 22,068 2,870 24,938
Total other expenses
56,796 19,991 76,787 59,885 18,929 78,814
Segment profit
29,627 10,485 40,112 23,569 11,988 35,557
Intersegment (revenues) expenses*
(297
)
297 — (317
)
317 —
Pre-tax segment profit after eliminations
$ 29,330 $ 10,782 $ 40,112 $ 23,252 $ 12,305 $ 35,557
% of segment pre-tax profit after eliminations
73.1
%
26.9
%
100.0
%
65.4
%
34.6
%
100.0
%
Segment assets(dollars in millions)
$ 3,128 $ 47 $ 3,175 $ 2,913 $ 40 $ 2,953

* Inter-segment revenues consist of rental payments, interest on deposits and management fees.

Page 33

	Nine Months Ended September 30, 2017									Nine Months Ended September 30, 2016
(dollars in thousands)	Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated

Net interest income	$	84,804		$	2		$	84,806		$	79,244		$	2		$	79,246
Less: loan loss provision		1,541			—			1,541			3,267			—			3,267
Net interest income after loan loss provision		83,263			2			83,265			75,977			2			75,979
Other income:
Fees for wealth management services		—			28,761			28,761			—			27,363			27,363
Service charges on deposit accounts		1,953			—			1,953			2,103			—			2,103
Loan servicing and other fees		1,570			—			1,570			1,528			—			1,528
Net (loss) gain on sale of loans		1,948			—			1,948			2,440			—			2,440
Net (loss) gain on sale of available for sale securities		73			—			73			(86	)		—			(86	)
Net loss on sale of other real estate owned		(12	)		—			(12	)		(76	)		—			(76	)
Dividends on FHLB and FRB stock		649			—			649			754			—			754
Insurance commissions		—			3,079			3,079			—			3,007			3,007
Other operating income		5,437			138			5,575			3,582			104			3,686
Total other income		11,618			31,978			43,596			10,245			30,474			40,719

Other expenses:
Salaries & wages		27,044			12,588			39,632			24,174			11,382			35,556
Employee benefits		4,777			2,888			7,665			4,846			2,495			7,341
Occupancy & equipment		6,025			1,233			7,258			5,997			1,207			7,204
Amortization of intangible assets		588			1,469			2,057			655			2,013			2,668
Professional fees		2,318			181			2,499			2,619			77			2,696
Other operating expenses		20,988			3,240			24,228			18,304			2,817			21,121
Total other expenses		61,740			21,599			83,339			56,595			19,991			76,586
Segment profit		33,141			10,381			43,522			29,627			10,485			40,112
Intersegment (revenues) expenses*		(336	)		336			—			(297	)		297			—
Pre-tax segment profit after eliminations	$	32,805		$	10,717		$	43,522		$	29,330		$	10,782		$	40,112
% of segment pre-tax profit after eliminations		75.4	%		24.6	%		100.0	%		73.1	%		26.9	%		100.0	%
Segment assets (dollars in millions)	$	3,425		$	52		$	3,477		$	3,128		$	47		$	3,175

* Inter-segment revenues consist of rental payments, interest on deposits and management fees.

~~Other~~

Other segment information is as follows:

Wealth Management Segment Information

(dollars in millions)

September 30, 2016

December 31, 2015

Assets under management, administration, supervision and brokerage:
$ 9,969.7 $ 8,364.8

	(dollars in millions)
	September 30, 2017		December 31, 2016
Assets under management, administration, supervision and brokerage	$	12,431.4	$	11,328.5

Page 34

Note 1111 - Mortgage Servicing Rights

The following table summarizes the ~~Corporation’s~~Corporation’s activity related to mortgage servicing rights (“MSRs”) for the three and nine months ended September 30, ~~2016~~2017 and ~~2015:~~2016:

	Three Months EndedSeptember 30,						Three Months Ended September 30,
(dollars in thousands)	2016			2015			2017			2016
Balance, beginning of period	$	4,646		$	4,970		$	5,682		$	4,646
Additions		386			277			282			386
Amortization		(210	)		(180	)		(229	)		(210	)
Recovery		—			8			—			—
Impairment		(29	)		(44	)		(3	)		(29	)
Balance, end of period	$	4,793		$	5,031		$	5,732		$	4,793
Fair value	$	4,877		$	5,339		$	6,146		$	4,877

Nine Months Ended September 30,

(dollars in thousands)

2016

2015

Balance, beginning of period
$ 5,142 $ 4,765
Additions
888 796
Amortization
(526
)
(443
)
Recovery
— 30
Impairment
(711
)
(117
)
Balance, end of period
$ 4,793 $ 5,031
Fair value
$ 4,877 $ 5,339
Residential mortgage loans serviced for others, end of period
$ 618,134 $ 601,999

	Nine Months Ended September 30,
(dollars in thousands)	2017			2016
Balance, beginning of period	$	5,582		$	5,142
Additions		770			888
Amortization		(571	)		(526	)
Recovery		3			—
Impairment		(52	)		(711	)
Balance, end of period	$	5,732		$	4,793
Fair value	$	6,146		$	4,877
Residential mortgage loans serviced for others, end of period	$	647,997		$	618,134

As of September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, key economic assumptions and the sensitivity of the current fair value of MSRs to immediate 10 and 20 percent adverse changes in those assumptions are as follows:

(dollars in thousands)	September 30, 2016			December 31, 2015			September 30, 2017			December 31, 2016
Fair value amount of MSRs	$	4,877		$	5,726		$	6,146		$	6,154
Weighted average life (in years)		5.0			6.4			6.0			6.3
Prepayment speeds (constant prepayment rate)*		14.6	%		10.2	%		11.5	%		10.2	%
Impact on fair value:
10% adverse change	$	(233	)	$	(198	)	$	(176	)	$	(115	)
20% adverse change	$	(488	)	$	(384	)	$	(356	)	$	(238	)
Discount rate		9.55	%		10.5	%		9.55	%		9.55	%
Impact on fair value:
10% adverse change	$	(154	)	$	(224	)	$	(211	)	$	(225	)
20% adverse change	$	(299	)	$	(431	)	$	(409	)	$	(434	)

*	~~Represents the weighted average prepayment rate for the life of the MSR asset.~~

* Represents the weighted average prepayment rate for the life of the MSR asset.

Page 35

These assumptions and sensitivities are hypothetical and should be used with caution. Changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which could magnify or counteract the sensitivities.

~~Page 35~~

~~Note 12 - Goodwill and Other Intangibles~~

Note 12 - Goodwill and Other Intangibles

The ~~Corporation’s~~Corporation’s goodwill and intangible assets related to the acquisitions of Lau Associates, LLC (“Lau”) in July 2008, FKF in July 2010, the Private Wealth Management Group of the Hershey Trust Company (“PWMG”) in May 2011, Davidson Trust Company (“DTC”) in May 2012, the loan and deposit accounts and a branch location of FBD in November 2012, PCPB in October 2014, CBH in January 2015, ~~and~~ RJM in April 2015 and Hirshorn in May 2017 are detailed below:

(dollars in thousands)	Balance December 31, 2015		Additions/ Adjustments		Amortization			Balance September 30, 2016		Amortization Period (in years)				Balance December 31, 2016		Additions/ Adjustments		Amortization			Balance September 30, 2017		Amortization Period
Goodwill – Wealth	$	20,412	$	—	$	—		$	20,412		Indefinite			$	20,412	$	—	$	—		$	20,412			Indefinite
Goodwill – Banking		80,783		—		—			80,783		Indefinite				80,783		—		—			80,783			Indefinite
Goodwill – Insurance		3,570		—		—			3,570		Indefinite				3,570		2,362		—			5,932			Indefinite
Total	$	104,765	$	—	$	—		$	104,765
Total Goodwill														$	104,765	$	2,362	$	—		$	107,127

Core deposit intangible	$	4,272	$	—	$	(620	)	$	3,652			10		$	3,447	$	—	$	(553	)	$	2,894			10 years
Customer relationships		14,384		—		(959	)		13,425		10	to	20		13,056		2,672		(1,152	)		14,576		10	to	20 years
Non-compete agreements		2,932		—		(1,054	)		1,878		5	to	10		1,634		41		(295	)		1,380		5	to	10 years
Trade name		2,165		—		—			2,165		Indefinite				2,165		195		(22	)		2,338		3 years	to	Indefinite
Domain name															—		151		—			151			Indefinite
Favorable lease		150		—		(35	)		115			5.75			103		—		(35	)		68		17	to	75 months
Total	$	23,903	$	—	$	(2,668	)	$	21,235
Grand total	$	128,668	$	—	$	(2,668	)	$	126,000
Total Other Intangibles														$	20,405	$	3,059	$	(2,057	)	$	21,407
Grand Total														$	125,170	$	5,421	$	(2,057	)	$	128,534

The Corporation performed its annual review of goodwill and identifiable intangible assets as of ~~December~~October 31, ~~2015~~2016 in accordance with ASC 350, “Intangibles Goodwill and Other.” For the ~~three and nine~~eleven months ended September 30, ~~2016,~~2017, the Corporation determined there were no events that would necessitate impairment testing of goodwill and other intangible assets.

Note 13– Derivative Instruments and Hedging Activities

Derivative financial instruments involve, to varying degrees, interest rate, market and credit risk. The Corporation manages these risks as part of its asset and liability management process and through credit policies and procedures. The Corporation seeks to minimize counterparty credit risk by credit limits and collateral agreements and utilizes certain derivative financial instruments to enhance its ability to manage interest rate risk that exists as part of its ongoing business operations. The derivative transactions entered into by the Corporation are an economic hedge of a derivative offerings to Bank customers. The Corporation does not use derivative financial instruments for trading purposes.

Customer Derivatives – Interest Rate Swaps. The Corporation enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Corporation originates variable-rate loans with customers in addition to interest rate swap agreements, which serve to effectively swap the customers’ variable-rate loans into a fixed-rate loans. The Corporation then enters into corresponding swap agreements with swap dealer counterparties to economically hedge its exposure on the variable and fixed components of the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. As of September 30, 2017, there were no fair value adjustments related to credit quality.

Risk Participation Agreements. The Corporation may enter into a risk participation agreement (“RPA”) with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed. This type of derivative is referred to as an “RPA sold”. In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Corporation has provided a loan structured with a derivative, the Corporation may purchase a risk participation agreement from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as an “RPA purchased”.

Page 36

The following table details the derivative instruments as of September 30, 2017 and December 31, 2016:

	Asset Derivatives				Liability Derivatives
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives not designated as hedging instruments
As of September 30, 2017:
Customer derivatives – interest rate swaps	$	83,217	$	1.950	$	83,217	$	1,946
Risk participation agreements sold		—		—		905		3
Risk participation agreements purchased		6,474		1		—		—
Total derivatives	$	89,691	$	1,951	$	84,122	$	1,949

As of December 31, 2016:
Customer derivatives – interest rate swaps	$	—	$	—	$	—	$	—
Risk participation agreements		—		—		—		—
Total derivatives	$	—	$	—	$	—	$	—

The Corporation has an International Swaps and Derivatives Association agreement with a third party that requires a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. The amount of collateral posted with the third party at September 30, 2017 and December 31, 2016 was $1.7 million and $0, respectively. The amount of collateral posted with the third party is deemed to be sufficient to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. The aggregate fair value of all derivative financial instruments in a liability position with credit measure contingencies and entered into with the third party was $1.9 million and $0 as of September 30, 2017 and December 31, 2016, respectively.

Note 14 – Accumulated Other Comprehensive Income ~~(Loss)~~(Loss)

The following tables detail the components of accumulated other comprehensive income (loss) for the three and nine month periods ended September 30, ~~2016~~2017 and ~~2015:~~2016:

(dollars in thousands)	Net Change in Unrealized Gains on Available-for- Sale Investment Securities			Net Change in Fair Value of Derivative Used for Cash Flow Hedge			Net Change in Unfunded Pension Liability			Accumulated Other Comprehensive Loss			Net Change in Unrealized Gains on Available-for- Sale Investment Securities			Net Change in Unfunded Pension Liability			Accumulated Other Comprehensive (Loss) Income
Balance, June 30, 2017													$	(433	)	$	(1,131	)	$	(1,564	)
Net change														149			15			164
Balance, September 30, 2017													$	(284	)	$	(1,116	)	$	(1,400	)

Balance, June 30, 2016	$	3,665		$	—		$	(1,177	)	$	2,488		$	3,665		$	(1,177	)	$	2,488
Net change		(376	)		—			16			(360	)		(376	)		16			(360	)
Balance, September 30, 2016	$	3,289		$	—		$	(1,161	)	$	2,128		$	3,289		$	(1,161	)	$	2,128

Balance, June 30, 2015	$	1,342		$	(76	)	$	(12,900	)	$	(11,634	)
Net change		896			(349	)		47			594
Balance, September 30, 2015	$	2,238		$	(425	)	$	(12,853	)	$	(11,040	)

(dollars in thousands)

Net Change in
Unrealized Gains
on Available-for-
Sale Investment
Securities

Net Change in
Fair Value of
Derivative Used
for Cash Flow
Hedge

Net Change in
Unfunded
Pension Liability

Accumulated
Other
Comprehensive
Loss

Balance, December 31, 2015
$ 774 $ — $ (1,186
)
$ (412
)
Net change
2,515 — 25 2,540
Balance, September 30, 2016
$ 3,289 $ — $ (1,161
)
$ 2,128

Balance, December 31, 2014
$ 1,316 $ (25
)
$ (12,995
)
$ (11,704
)
Net change
922 (400
)
142 664
Balance, September 30, 2015
$ 2,238 $ (425
)
$ (12,853
)
$ (11,040
)

(dollars in thousands)	Net Change in Unrealized Gains on Available-for- Sale Investment Securities			Net Change in Unfunded Pension Liability			Accumulated Other Comprehensive (Loss) Income
Balance, December 31, 2016	$	(1,231	)	$	(1,178	)	$	(2,409	)
Net change		947			62			1,009
Balance, September 30, 2017	$	(284	)	$	(1,116	)	$	(1,400	)

Balance, December 31, 2015	$	774		$	(1,186	)	$	(412	)
Net change		2,515			25			2,540
Balance, September 30, 2016	$	3,289		$	(1,161	)	$	2,128

Page 3637

The following table details the amounts reclassified from each component of accumulated other comprehensive loss to each ~~component’s~~component’s applicable income statement line, for the three and nine month periods ended September 30, ~~2016~~2017 and ~~2015:~~2016:

Description of Accumulated Other	Amount Reclassified from Accumulated Other Comprehensive Loss							Amount Reclassified from Accumulated Other Comprehensive Loss
Comprehensive Loss Component	For The Three Months Ended September 30,						Affected Income Statement Category	Three Months Ended September 30,					Affected Income Statement Category
	2016			2015				2017			2016
*Net unrealized gain on investment securities available for sale:*
Realization of (gain) loss on sale of investment securities available for sale	$	28		$	(60	)	Net gain on sale of available for sale investment securities
Realization of loss on sale of investment securities available for sale								$	(72	)	$	28	Net gain on sale of available for sale investment securities
Less: income tax benefit (expense)		10			21		Less: income tax expense		(25	)		10	Less: income tax expense
Net of income tax	$	18		$	(39	)	Net of income tax	$	(47	)	$	18	Net of income tax

*Unfunded pension liability:*			��
Amortization of net loss included in net periodic pension costs*	$	24		$	504		Employee benefits	$	24		$	24	Employee benefits
Amortization of prior service cost included in net periodic pension costs*		—			—		Employee benefits		—			—	Employee benefits
Total expense before income tax benefit		24			504		Total expense before income tax benefit		24			24	Total expense before income tax benefit
Less: income tax benefit		8			176		Less: income tax benefit		8			8	Less: income tax benefit
Net of income tax	$	16		$	328		Net of income tax	$	16		$	16	Net of income tax

Description of Accumulated Other	Amount Reclassified from Accumulated Other Comprehensive Loss						Amount Reclassified from Accumulated Other Comprehensive Loss
Comprehensive Loss Component	For The Nine Months Ended September 30,					Affected Income Statement Category	Nine Months Ended September 30,					Affected Income Statement Category
	2016		2015				2017			2016
*Net unrealized gain on investment securities available for sale:*
Realization of (gain) loss on sale of investment securities available for sale	$	86	$	(873	)	Net (loss) gain on sale of available for sale investment securities	$	(73	)	$	86	Net (loss) gain on sale of available for sale investment securities
Less: income tax expense		30		306		Less: income tax expense		(25	)		30	Less: income tax expense
Net of income tax	$	56	$	(567	)	Net of income tax	$	(48	)	$	56	Net of income tax

*Unfunded pension liability:*
Amortization of net loss included in net periodic pension costs*	$	73	$	1,512		Employee benefits	$	71		$	73	Employee benefits
Amortization of prior service cost included in net periodic pension costs*		—		—		Employee benefits		—			—	Employee benefits
Total expense before income tax benefit		73		1,512		Total expense before income tax benefit		71			73	Total expense before income tax benefit
Less: income tax benefit		26		529		Less: income tax benefit		25			26	Less: income tax benefit
Net of income tax	$	47	$	983		Net of income tax	$	46		$	47	Net of income tax

*Accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9 - Pension and Other Post-Retirement Benefit Plans

~~Page 37~~

Note N1~~ote 14~~5 - Shareholders’ Equity

Dividend

On October ~~20, 2016,~~19, 2017, the Corporation’s Board of Directors declared a regular quarterly dividend of ~~$0.21~~$0.22 per share payable December 1, ~~2016~~2017 to shareholders of record as of November ~~2, 2016.~~1, 2017. During the third quarter of ~~2016,~~2017, the Corporation paid or accrued, as applicable, a regular quarterly dividend of ~~$0.21~~$0.22 per share. This dividend totaled ~~$3.6~~$3.8 million, based on outstanding shares and restricted stock units as of August ~~4, 2016~~2, 2017 of ~~17,083,626~~17,248,984 shares.

Page 38

S-3 Shelf Registration Statement and Offerings Thereunder

In March 2015, the Corporation filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) to replace its 2012 Shelf Registration Statement, which was set to expire in April 2015. The Shelf Registration Statement allows the Corporation to raise additional capital through offers and sales of registered securities consisting of common stock, debt securities, warrants to purchase common stock, stock purchase contracts and units or units consisting of any combination of the foregoing securities. Using the prospectus in the Shelf Registration Statement, together with applicable prospectus supplements, the Corporation may sell, from time to time, in one or more offerings, such securities in a dollar amount up to $200 million, in the aggregate.

In addition, the Corporation has in place under its Shelf Registration Statement a Dividend Reinvestment and Stock Purchase Plan (the “Plan”), which allows it to issue up to 1,500,000 shares of registered common stock. The Plan allows for the grant of a request for waiver (“RFW”) above the Plan’s maximum investment of $120 thousand per account per year. An RFW is granted based on a variety of factors, including the Corporation’s current and projected capital needs, prevailing market prices of the Corporation’s common stock and general economic and market conditions.

O~~Options~~ptions

In addition to shares that may be issued through the Plan, the Corporation also issues shares through the exercise of stock ~~options.~~options and the vesting of RSUs and PSUs. During the ~~three and~~ nine months ended September 30, ~~2016, 27,595~~2017, 58,027 shares ~~and 60,398 shares, respectively,~~ were issued pursuant to the exercise of stock options, increasing shareholders’ equity by ~~$559~~$1.3 million. During the nine months ended September 30, 2017, 16,985 RSUs vested and were issued and 61,815 PSUs vested and were issued. The increase in shareholders’ equity related to the issuance of the RSUs and PSUs, which is recognized over the vesting period through stock based compensation expense, was $497 thousand and ~~$1.2 million,~~$930 thousand, respectively.

Stock~~Stock Repurchases~~ Repurchases

On August 6, 2015, the Corporation announced a stock repurchase program (the “2015 Program”) under which the Corporation may repurchase up to 1,200,000 shares of the Corporation’s common stock, at an aggregate purchase price not to exceed $40 million. During the ~~three~~nine months ended ~~March 31, 2016, the Corporation repurchased 286,700 shares under the 2015 Program at an average price of $27.80 per share. No~~September 30, 2017, no shares were repurchased under the 2015 ~~Program during the six months ended September 30, 2016. All share repurchases under the 2015 Program were accomplished in open market transactions.~~Program. As of September 30, ~~2016,~~2017, the maximum number of shares remaining authorized for repurchase under the 2015 Program was 189,300. In addition to the 2015 Program, it is the Corporation’s practice to retire shares to its treasury account upon the vesting of stock awards to certain officers in order to cover the statutory income tax withholdings related to such vestings.

Note 1516 - Accounting for Uncertainty in Income Taxes

The Corporation recognizes the financial statement benefit of a tax position only after determining that the Corporation would be more likely than not to sustain the position following an examination. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority.

The Corporation is subject to income taxes in the United States federal jurisdiction and multiple state jurisdictions. The Corporation is no longer subject to U.S. federal income tax examination by taxing authorities for years before ~~2013.~~2014.

The ~~Corporation’s~~Corporation’s policy is to record interest and penalties on uncertain tax positions as income tax expense. No interest or penalties were accrued for the three or nine ~~months~~month periods ended September 30, ~~2016~~2017 or ~~2015.~~2016.

Note 1617 - Fair Value Measurement

The following disclosures are made in conjunction with the application of fair value measurements.

FASB ASC 820 “Fair Value Measurement” establishes a fair value hierarchy based on the nature of data inputs for fair value determinations, under which the Corporation is required to value each asset using assumptions that market participants would utilize to value that asset. When the Corporation uses its own assumptions, it is required to disclose additional information about the assumptions used and the effect of the measurement on earnings or the net change in assets for the period.

~~Page 38~~

The ~~Corporation’s~~Corporation’s investment securities available for sale, which generally include state and municipal securities, U.S. government agency securities and mortgage-related securities, are reported at fair value. These securities are valued by an independent third party. The third party’s evaluations are based on market data. They utilize evaluated pricing models that vary by asset and incorporate available trade, bid and other market information. For securities that do not trade on a daily basis, their pricing applications apply available information such as benchmarking and matrix pricing. The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (only obtained from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain securities, additional inputs may be used or some market inputs may not be applicable. Inputs are prioritized differently on any given day based on market conditions.

Page 39

U.S. Government agency securities are evaluated and priced using multi-dimensional relational models and option-adjusted spreads. State and municipal securities are evaluated on a series of matrices including reported trades and material event notices. Mortgage-related securities are evaluated using matrix correlation to treasury or floating index benchmarks, prepayment speeds, monthly payment information and other benchmarks. Other available for sale investments are evaluated using a broker-quote based application, including quotes from issuers. The Corporation has a sufficient understanding of the third party service’s valuation models, assumptions and inputs used in determining the fair value of available for sale investments to enable management to maintain an appropriate system of internal control.

The Corporation’s interest rate swaps are reported at fair value utilizing Level 2 inputs. Prices of these instruments are obtained through an independent pricing source utilizing pricing information which may include market observed quotations for swaps, LIBOR rates, forward rates and rate volatility. When entering into a derivative contract, the Corporation is exposed to fair value changes due to interest rate movements, and the potential non-performance of our contract counterparty. The Corporation has developed a methodology to value the non-performance risk based on internal credit risk metrics and the unique characteristics of derivative instruments, which include notional exposure rather than principle at risk and interest payment netting. The results of this methodology are used to adjust the base fair value of the instrument for the potential counterparty credit risk.

The value of the investment portfolio isand interest rate swaps are determined using three broad levels of inputs:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Instruments whose significant value drivers are unobservable.

These levels are not necessarily an indication of the risks or liquidity associated with these investments. The following tables summarize the assets at September 30, ~~2016~~2017 and December 31, ~~2015~~2016 that are recognized on the Corporation’s balance sheet using fair value measurement determined based on the differing levels of input.

The following table sets forth the ~~fair~~fair value of assets measured on a recurring and non-recurring basis as of September 30, ~~2016:~~2017:

(dollars in millions)	Total		Level 1		Level 2		Level 3
(dollars in millions)									Total		Level 1		Level 2		Level 3
Assets Measured at Fair Value on a Recurring Basis:
Investment securities (available for sale and trading):
U.S. Treasury securities	$	0.1	$	0.1	$	—	$	—	$	0.1	$	0.1	$	—	$	—
Obligations of the U.S. government agency securities		76.6		—		76.6		—		142.7		—		142.7		—
Obligations of state & political subdivisions		37.3		—		37.3		—		24.1		—		24.1		—
Mortgage-backed securities		184.9		—		184.9		—		266.9		—		266.9		—
Collateralized mortgage obligations		51.3		—		51.3		—		39.6		—		39.6		—
Mutual funds		18.9		18.9		—		—		7.9		7.9		—		—
Other debt securities		1.5		—		1.5		—		1.1		—		1.1		—
Interest rate swaps										1.9		—		1.9		—
Total assets measured on a recurring basis at fair value	$	370.6	$	19.0	$	351.6	$	—	$	484.3	$	8.0	$	476.3	$	—

Assets Measured at Fair Value on a Non-Recurring Basis
Mortgage servicing rights	$	4.9	$	—	$	—	$	4.9	$	6.1	$	—	$	—	$	6.1
Impaired loans and leases		15.2		—		—		15.2		10.7		—		—		10.7
Other real estate owned (“OREO”)		0.9		—		—		0.9		0.9		—		—		0.9
Total assets measured on a non-recurring basis at fair value	$	21.0	$	—	$	—	$	21.0	$	17.7	$	—	$	—	$	17.7

Page 40

~~The~~The following table sets forth the fair value of assets measured on a recurring and non-recurring basis as of December 31, ~~2015:~~2016:

(dollars in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets Measured at Fair Value on a Recurring Basis:
Investment securities (available for sale and trading):
U.S. Treasury securities	$	0.1	$	0.1	$	—	$	—	$	200.1	$	200.1	$	—	$	—
Obligations of the U.S. government agency securities		101.5		—		101.5		—		82.2		—		82.2		—
Obligations of state & political subdivisions		42.0		—		42.0		—		33.5		—		33.5		—
Mortgage-backed securities		158.7		—		158.7		—		188.8		—		188.8		—
Collateralized mortgage obligations		29.8		—		29.8		—		48.7		—		48.7		—
Mutual funds	19.2		19.2			—		—	19.1		19.1			—		—
Other debt securities		1.6		—		1.6		—		1.3		—		1.3		—
Total assets measured on a recurring basis at fair value	$	352.9	$	19.3	$	333.6	$	—	$	573.7	$	219.2	$	354.5	$	—

Assets Measured at Fair Value on a Non-Recurring Basis
Mortgage servicing rights	$	5.7	$	—	$	—	$	5.7	$	6.2	$	—	$	—	$	6.2
Impaired loans and leases		13.8		—		—		13.8		14.3		—		—		14.3
OREO		2.6		—		—		2.6		1.0		—		—		1.0
Total assets measured on a non-recurring basis at fair value	$	22.1	$	—	$	—	$	22.1	$	21.5	$	—	$	—	$	21.5

~~Page 39~~

During the three and nine months ended September 30, ~~2016,~~2017, a decrease of $1$6 thousand ~~was~~and an increase of $37 thousand were recorded in the Allowance as a result of adjusting the carrying value and estimated fair value of the impaired loans in the above tables. As it relates to the fair values of assets measured on a recurring basis, there have been no transfers between levels during the three and nine months ended September 30, ~~2016.~~2017.

Impaired Loans

The Corporation evaluates and values impaired loans at the time the loan is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy. Each ~~loan’s~~loan’s collateral has a unique appraisal and management’s discount of the value is based on the factors unique to each impaired loan. The significant unobservable input in determining the fair value is management’s subjective discount on appraisals of the collateral securing the loan, which range from 10% - 50%. Collateral may consist of real estate and/or business assets including equipment, inventory and/or accounts receivable and the value of these assets is determined based on the appraisals by qualified licensed appraisers hired by the Corporation. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management’s expertise and knowledge of the client and the client’s business.

The Corporation has an appraisal policy in which an appraisal is obtained for a commercial loan at the point at which the loan either becomes nonperforming or is downgraded to a substandard or worse classification. For consumer loans, the Corporation obtains updated appraisals when a loan becomes 90 days past due or when it receives other information that may indicate possible impairment. Based on the appraisals obtained by the Corporation, an appropriate Allowance is allocated to the particular loan.

Other Real Estate Owned

Other real estate owned consists of properties acquired as a result of foreclosures and deeds in-lieu-of foreclosure. Properties are classified as OREO and are reported at the lower of cost or fair value less cost to sell, and are classified as Level 3 in the fair value hierarchy.

Mortgage Servicing Rights

MSRs do not trade in an active, open market with readily observable prices. Accordingly, the Corporation obtains the fair value of the MSRs using a third-party pricing provider. The provider determines the fair value by discounting projected net servicing cash flows of the remaining servicing portfolio. The valuation model used by the provider considers market loan prepayment predictions and other economic factors which the Corporation considers to be significant unobservable inputs. The fair value of MSRs is mostly affected by changes in mortgage interest rates since rate changes cause the loan prepayment acceleration factors to increase or decrease. All assumptions are market driven. The Corporation has a sufficient understanding of the third party ~~service’s~~service’s valuation models, assumptions and inputs used in determining the fair value of MSRs to enable management to maintain an appropriate system of internal control. Mortgage servicing rights are classified within Level 3 of the fair value hierarchy as the valuation is model driven and primarily based on unobservable inputs.

Page 41

Note 1718 - Fair Value of Financial Instruments

FASB ASC 825, “Disclosures about Fair Value of Financial Instruments” requires disclosure of the fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate such value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other fair value techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The aggregate fair value amounts presented below do not represent the underlying value of the Corporation.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents

The carrying amounts reported in the balance sheet for cash and cash equivalents approximate their fair values.

Investment Securities

Estimated fair values for investment securities are generally valued by an independent third party based on market data, utilizing pricing models that vary by asset and incorporate available trade, bid and other market information. Management reviews, annually, the process utilized by its independent third-party valuation experts. On a quarterly basis, Management tests the validity of the prices provided by the third party by selecting a representative sample of the portfolio and obtaining actual trade results, or if actual trade results are not available, competitive broker pricing. See Note 4 of the Notes to Consolidated Financial Statements for more information.

~~Page 40~~

Loans Held for Sale

The fair value of loans held for sale is based on pricing obtained from secondary markets.

Net Portfolio Loans and Leases

For ~~variable-rate~~variable-rate loans that re-price frequently and which have no significant change in credit risk, estimated fair values are based on carrying values. Fair values of certain mortgage loans and consumer loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality and is indicative of an entry price. The estimated fair value of nonperforming loans is based on discounted estimated cash flows as determined by the internal loan review of the Corporation or the appraised fair value of the underlying collateral, as determined by independent third party appraisers. This technique does not reflect an exit price.

Impaired Loans

Mortgage Servicing Rights

The fair value of the MSRs for these periods was determined using a proprietary third-party valuation model that calculates the present value of estimated future servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds and discount rates. Due to the proprietary nature of the valuation model used, the Corporation classifies the value of MSRs as using Level 3 inputs.

Other Assets

The carrying amount of ~~FHLB stock,~~ accrued interest receivable, income taxes receivable and other investments ~~are their~~approximates fair ~~values.~~value.

Deposits

The estimated fair values disclosed for noninterest-bearing demand deposits, savings, NOW accounts, and market rate accounts are, by definition, equal to the amounts payable on demand at the reporting date (i.e., their carrying amounts). Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of expected monthly maturities on the certificate of deposit. FASB Codification 825 defines the fair value of demand deposits as the amount payable on demand as of the reporting date and prohibits adjusting estimated fair value from any value derived from retaining those deposits for an expected future period of time.

Page 42

Short-term borrowings

The carrying amount of short-term borrowings, which include overnight repurchase agreements, fed funds and FHLB advances with original maturity of one year or less, approximates their fair value.

Long-term FHLB Advances ~~and Other Borrowings~~

The fair value of long-term FHLB advances ~~and other borrowings~~ (with original maturities of greater than one year) is established using a discounted cash flow calculation that applies interest rates currently being offered on mid-term and long term borrowings.

Subordinated ~~Notes~~Notes

The fair value of the Notes is estimated by discounting the principal balance using the FHLB yield curve for the term to the call date as the Corporation has the option to call the Notes. The Notes are classified within Level 2 in the fair value hierarchy.

Other Liabilities

The carrying amounts of accrued interest payable and other accrued payables ~~are their~~approximate fair ~~values.~~value.

Interest Rate Swaps and Risk Participation Agreements

The Corporation’s interest rate swaps and RPAs are reported at fair value utilizing Level 2 inputs. Prices of these instruments are obtained through an independent pricing source utilizing pricing information which may include market observed quotations for swaps, LIBOR rates, forward rates and rate volatility. When entering into a derivative contract, the Corporation is exposed to fair value changes due to interest rate movements, and the potential non-performance of our contract counterparty. The Corporation has developed a methodology to value the non-performance risk based on internal credit risk metrics and the unique characteristics of derivative instruments, which include notional exposure rather than principle at risk and interest payment netting. The results of this methodology are used to adjust the base fair value of the instrument for the potential counterparty credit risk.

Off-Balance Sheet Instruments

Estimated fair values of the ~~Corporation’s~~Corporation’s commitments to extend credit, standby letters of credit and financial guarantees are not included in the table below as their carrying values generally approximate their fair values. These instruments generate fees that approximate those currently charged to originate similar commitments.

~~Page 41~~

As of the dates indicated, the carrying amount and estimated fair value of the ~~Corporation’s~~Corporation’s financial instruments are as follows:

		As ofSeptember 30,				As of December 31					As of September 30,				As of December, 31
	Fair Value	2016				2015				Fair Value	2017				2016
(dollars in thousands)	Hierarchy Level*	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Hierarchy Level*	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	Level 1	$	49,023	$	49,023	$	143,067	$	143,067
Cash and cash equivalents										Level 1	$	45,552	$	45,552	$	50,765	$	50,765
Investment securities, available for sale	See Note 16		366,910		366,910		348,966		348,966	See Note 17		471,721		471,721		566,996		566,996
Investment securities, held to maturity	Level 2		2,896		2,902		—		—
Investment securities, trading	Level 2		3,702		3,702		3,950		3,950
Loans held for sale	Level 2		11,506		11,506		8,987		8,987
Net portfolio loans and leases	Level 3		2,475,613		2,503,669		2,253,131		2,273,947
Investment securities, trading										See Note 17		4,423		4,423		3,888		3,888
Investments, held to maturity										Level 2		6,255		6,218		2,879		2,818
Loans held for sale										Level 2		6,327		6,327		9,621		9,621
Net portfolio loans and leases										Level 3		2,660,341		2,693,099		2,517,939		2,505,546
Mortgage servicing rights	Level 3		4,793		4,876		5,142		5,726	Level 3		5,732		6,146		5,582		6,154
Interest rate swaps										Level 2		1,950		1,950		—		—
Risk participation agreements purchased										Level 2		1		1
Other assets	Level 3		30,372		30,372		30,271		30,271	Level 3		34,476		34,476		34,465		34,465
Total financial assets	Total financial assets	$	2,944,815	$	2,972,960	$	2,793,514	$	2,814,914	Total financial assets	$	3,236,778	$	3,269,913	$	3,192,135	$	3,180,253
Financial liabilities:
Deposits	Level 2	$	2,477,877	$	2,478,334	$	2,252,725	$	2,251,703	Level 2	$	2,684,181	$	2,682,737	$	2,579,675	$	2,579,011
Short-term borrowings	Level 2		50,065		50,065		94,167		94,156
Long-term FHLB advances and other borrowings	Level 2		204,772		203,327		254,863		254,796
Short-term borrowings										Level 2		180,874		180,874		204,151		204,151
Long-term FHLB advances										Level 2		134,651		134,789		189,742		186,863
Subordinated notes	Level 2		29,518		31,231		29,479		27,453	Level 2		29,573		30,320		29,532		29,228
Other liabilities	Level 2		33,389		33,389		34,052		34,052
Interest rate swaps										Level 2		1,946		1,946		—		—
Risk participation agreements sold										Level 2		3		3
Other liabilities										Level 2		43,701		43,701		37,303		37,303
Total financial liabilities	Total financial liabilities	$	2,795,621	$	2,796,346	$	2,665,286	$	2,662,160	Total financial liabilities	$	3,074,929	$	3,074,370	$	3,040,403	$	3,036,556

*See Note 1617 for a description of fair value hierarchy levels.

Page 43

Note 19 -Recent Accounting Pronouncements

~~Note 18 - New Accounting Pronouncements~~FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers”

Issued in May 2014, ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the FASB issued ASU ~~2016-09~~No. 2015-14, Revenue from Contracts with Customers (Topic ~~718), “Improvements to Employee Share-Based Payment Accounting”~~

606): Deferral of the Effective Date. This amendment defers the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU ~~2016-09,~~2016- 08, “Principal versus Agent Considerations (Reporting Gross versus Net),” which ~~changes several aspects~~amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the ~~accounting for share-based payment award transactions, including: (1)~~goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers and 2016-12, Narrow-Scope Improvements and Practical Expedients, both of which provide additional clarification of certain provisions in Topic 606. These Accounting ~~and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. The standard is~~Standards Codification (“ASC”) updates are effective for ~~public business entities in~~ annual ~~and interim~~reporting periods ~~in fiscal years~~ beginning after December 15, ~~2016.~~2017, but early adoption is permitted. Early adoption is permitted ~~if the entire standard is adopted. If an entity early adopts the standard in an interim period, any adjustments should be reflected~~only as of annual reporting periods after December 15, 2016. The standard permits the ~~beginning~~use of either the ~~fiscal year that includes that interim period.~~retrospective or retrospectively with the cumulative effect transition method. The Corporation ~~early-adopted ASU 2016-09 during the three months ended September 30, 2016. As a result of~~has evaluated all revenue streams, accounting policies, practices and reporting to identify and understand any impact on the adoption the Corporation recognized a $385 thousand and $445 thousand tax benefit in the Consolidated Statements of Income for the three and nine months ended September 30, 2016, respectively. The impact of the income tax benefit or expense related to ASU 2016-09 is treated as a discrete item in the calculation of the year-to-date income tax expense. Also, in accordance with the provisions of ASU ~~2016-09,~~2014-09 will have on the ~~Corporation presents excess tax benefits as an operating activity in the~~Corporation’s Consolidated ~~Statement~~Financial Statements. Our evaluation indicates that adoption of ~~Cash Flows using a retrospective transition method. Adoption of all other changes did~~this guidance will not have ~~an impact~~a material effect on our ~~consolidated financial statements.~~Consolidated Financial Statements.

FASB ASU ~~2016-1~~52017-04 (Topic 320)350), ““Intangibles – Goodwill and Others”~~Classification~~

Issued in January 2017, ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. The Corporation is evaluating the effect that ASU 2017-04 will have on its consolidated financial statements and related disclosures.

FASB ASU 2017-01 (Topic 805), “Business Combinations”

Issued in January 2017, ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual periods beginning after December 15, 2017 including interim periods within those periods. The Corporation is evaluating the effect that ASU 2017-01 will have on its consolidated financial statements and related disclosures.

FASB ASU 2016-15 (Topic 320), “Classification of Certain Cash Receipts andCash ~~Payments~~”Payments”

Issued in August 2016, ASU 2016-15 provides guidance on eight specific cash flow issues and their disclosure in the consolidated statements of cash flows. The issues addressed include debt prepayment, settlement of zero-coupon debt, contingent consideration in business combinations, proceeds from settlement of insurance claims, proceeds from settlement of BOLI, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the Predominance principle. 2016-15 is effective for the annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted. The Corporation is currently evaluating the ~~effect that ASU 2016-15 will have~~impact of this guidance and does not anticipate a material impact on its consolidated financial statements ~~and related disclosures.~~.

FASB ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments”

Issued in June 2016, ASU 2016-13 significantly changes how companies measure and recognize credit impairment for many financial assets. The new current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The ASU also makes targeted amendments to the current impairment model for available-for-sale debt securities. ASU 2016-13 is effective for the annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Corporation is evaluating the effect that ASU ~~2016-02~~2016-13 will have on its consolidated financial statements and related disclosures.

Page 4244

FASB ASU 2016-02 (Topic 842), “Leases”

Issued in February 2016, ASU 2016-02 revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. ASU 2016-02 is effective for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted. The standard is required to be adopted using the modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Corporation is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

FASB ASU 2016-01 (Subtopic 825-10), “Financial Instruments – Overall, Recognition and Measurement of Financial Assets and Financial Liabilities”

Issued in January 2016, ASU 2016-01 provides that equity investments will be measured at fair value with changes in fair value recognized in net income. When fair value is not readily determinable an entity may elect to measure the equity investment at cost, minus impairment, plus or minus any change in the ~~investment’s~~investment’s observable price. For financial liabilities that are measured at fair value, the amendment requires an entity to present separately, in other comprehensive income, any change in fair value resulting from a change in instrument-specific credit risk. ASU 2016-01 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. Entities may apply this guidance on a prospective or retrospective basis. The Corporation has evaluated the effect of the adoption of ASU 2016-02 and had determined that it will not have a material impact on its consolidated financial statements and related disclosures.

FASB ASU 2017-08 (Subtopic 310-20), “Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”

Issued in March 2017, ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendment requires the premium to be amortized to the earliest call date. The amendments does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Corporation has evaluated ASU 2017-08 and determined that it currently follows the guidance related to premium amortization on callable debt securities.

FASB ASU 2017-07—Compensation—Retirement Benefits (Topic 715): “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”

Issued in March 2017, ASU 2017-07 require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Corporation is evaluating the effect that ASU ~~2016-02~~2017-07 will have on its consolidated financial statements and related ~~disclosures.~~disclosures, but does not expect that it will materially affect the Corporation’s financial statements.

Page 4345