Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Jul. 31, 2019
Document and Entity Information
Entity Registrant Name	MIDLAND STATES BANCORP, INC.
Entity Central Index Key	0001466026
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Entity File Number	001-35272
Title of 12(b) Security	Common stock, $0.01 par value
Entity Incorporation, State or Country Code	IL
Entity Tax Identification Number	37-1233196
Entity Address, Postal Zip Code	62401
Entity Address, Address Line One	1201 Network Centre Drive
Entity Address, City or Town	Effingham
Entity Address, Country	IL
Local Phone Number	342-7321
City Area Code	217
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Trading Symbol	MSBI
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		24,363,400
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 244,239	$ 210,780
Federal funds sold	1,176	2,920
Cash and cash equivalents	245,415	213,700
Investment securities available for sale, at fair value	609,657	657,451
Equity securities, at fair value	3,369	3,334
Loans	4,073,527	4,137,551
Allowance for loan losses	(25,925)	(20,903)
Total loans, net	4,047,602	4,116,648
Loans held for sale, at fair value	22,143	30,401
Premises and equipment, net	94,824	94,840
Operating lease right-of-use asset	10,226
Other real estate owned	3,797	3,483
Nonmarketable equity securities	43,175	42,472
Accrued interest receivable	15,509	16,560
Mortgage servicing rights, at lower of cost or fair value	54,191	53,447
Mortgage servicing rights held for sale	159	3,545
Intangible assets	33,893	37,376
Goodwill	164,673	164,673
Cash surrender value of life insurance policies	140,593	138,783
Accrued income taxes receivable	2,032	8,809
Deferred tax assets, net		1,251
Other assets	54,797	50,900
Total assets	5,546,055	5,637,673
Deposits:
Noninterest-bearing	902,286	972,164
Interest-bearing	3,108,921	3,102,006
Total deposits	4,011,207	4,074,170
Short-term borrowings	113,844	124,235
FHLB advances and other borrowings	582,387	640,631
Subordinated debt	94,215	94,134
Trust preferred debentures	48,041	47,794
Accrued interest payable	5,455	4,855
Deferred tax liabilities, net	3,869
Operating lease liabilities	10,719
Other liabilities	36,430	43,329
Total liabilities	4,906,167	5,029,148
Shareholders' Equity:
Preferred stock, Series H, $2 par value; $1,000 per share liquidation value; 2,636 shares authorized, issued and outstanding at June 30, 2019 and December 31, 2018	2,684	2,781
Common stock, $0.01 par value; 40,000,000 shares authorized; 23,897,038 and 23,751,798 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	239	238
Capital surplus	477,412	473,833
Retained earnings	152,387	133,781
Accumulated other comprehensive income (loss)	7,166	(2,108)
Total shareholders' equity	639,888	608,525
Total liabilities and shareholders' equity	$ 5,546,055	$ 5,637,673

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Liquidation value	$ 1,000	$ 1,000
Preferred stock, par value	$ 2	$ 2
Preferred stock, shares authorized	2,636	2,636
Preferred stock, shares issued	2,636	2,636
Preferred stock, shares outstanding	2,636	2,636
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	23,897,038	23,751,798
Common stock, shares outstanding	23,897,038	23,751,798

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Loans:
Taxable	$ 53,021	$ 50,699	$ 104,903	$ 91,730
Tax exempt	918	802	1,892	1,269
Loans held for sale	451	295	750	723
Investment securities:
Taxable	3,606	3,756	7,289	6,399
Tax exempt	1,061	1,235	2,127	2,251
Nonmarketable equity securities	597	482	1,218	881
Federal funds sold and cash investments	982	1,014	1,889	1,535
Total interest income	60,636	58,283	120,068	104,788
Interest expense:
Deposits	8,437	5,005	15,800	9,122
Short-term borrowings	210	116	447	240
FHLB advances and other borrowings	3,541	2,582	7,388	4,453
Subordinated debt	1,514	1,514	3,028	3,028
Trust preferred debentures	857	780	1,727	1,474
Total interest expense	14,559	9,997	28,390	18,317
Net interest income	46,077	48,286	91,678	86,471
Provision for loan losses	4,076	1,854	7,319	3,860
Net interest income after provision for loan losses	42,001	46,432	84,359	82,611
Noninterest income:
Wealth management revenue	5,504	5,316	10,457	9,395
Commercial FHA revenue	4,917	326	8,187	3,656
Residential mortgage banking revenue	611	2,116	1,445	3,534
Service charges on deposit accounts	2,639	2,693	5,159	4,660
Interchange revenue	3,010	2,929	5,690	4,974
Gain (loss) on sales of investment securities, net	14	(70)	14	(5)
(Loss) gain on sales of other real estate owned	(12)	166	54	473
Other income	2,904	2,371	5,656	5,662
Total noninterest income	19,587	15,847	36,662	32,349
Noninterest expense:
Salaries and employee benefits	21,134	23,467	43,173	51,862
Occupancy and equipment	4,500	4,708	9,332	8,960
Data processing	4,987	5,106	9,878	9,585
FDIC insurance	367	539	802	1,087
Professional	2,410	3,195	4,483	6,944
Marketing	1,118	1,411	2,352	2,617
Communications	677	741	1,348	2,317
Loan expense	616	552	976	1,076
Other real estate owned	101	166	194	256
Amortization of intangible assets	1,673	1,576	3,483	3,251
(Gain) loss on mortgage servicing rights held for sale	(515)	188	(515)	188
Other expense	3,126	4,803	5,785	7,808
Total noninterest expense	40,194	46,452	81,291	95,951
Income before income taxes	21,394	15,827	39,730	19,009
Income taxes	5,039	3,045	9,393	4,421
Net income	16,355	12,782	30,337	14,588
Preferred stock dividends and premium amortization	34	36	68	72
Net income available to common shareholders	$ 16,321	$ 12,746	$ 30,269	$ 14,516
Per common share data:
Basic earnings per common share	$ 0.67	$ 0.53	$ 1.25	$ 0.64
Diluted earnings per common share	$ 0.67	$ 0.52	$ 1.24	$ 0.63
Weighted average common shares outstanding	24,081,777	23,815,436	24,040,032	22,365,927
Weighted average diluted common shares outstanding	24,303,211	24,268,111	24,254,612	22,817,472

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 16,355	$ 12,782	$ 30,337	$ 14,588
Investment securities available for sale:
Unrealized gains (losses) that occurred during the period	5,098	(2,252)	12,806	(5,589)
Reclassification adjustment for realized net (gains) losses on sales of investment securities included in net income	(14)	70	(14)	5
Income tax effect	(1,398)	595	(3,518)	1,519
Change in investment securities available for sale, net of tax	3,686	(1,587)	9,274	(4,065)
Other comprehensive income (loss), net of tax	3,686	(1,587)	9,274	(4,065)
Total comprehensive income	$ 20,041	$ 11,195	$ 39,611	$ 10,523

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred stock	Common stock	Capital surplus	Retained earnings	Accumulated other comprehensive (loss)	Total
Beginning Balance at Dec. 31, 2017	$ 2,970	$ 191	$ 330,148	$ 114,478	$ 1,758	$ 449,545
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				14,588		14,588
Other comprehensive income					(4,065)	(4,065)
Common dividends declared				(9,472)		(9,472)
Preferred dividends declared				(166)		(166)
Preferred stock, premium amortization	(94)			94		94
Share-based compensation expense			831			831
Acquisition of Alpine Bancorporation, Inc.		45	139,876			139,921
Issuance of common stock under employee benefit plans		1	1,352			1,353
Ending Balance at Jun. 30, 2018	2,876	237	472,207	119,522	(2,307)	592,535
Beginning Balance at Mar. 31, 2018	2,923	236	470,937	112,009	(720)	585,385
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				12,782		12,782
Other comprehensive income					(1,587)	(1,587)
Common dividends declared				(5,233)		(5,233)
Preferred dividends declared				(83)		(83)
Preferred stock, premium amortization	(47)			47		47
Share-based compensation expense			398			398
Issuance of common stock under employee benefit plans		1	872			873
Ending Balance at Jun. 30, 2018	2,876	237	472,207	119,522	(2,307)	592,535
Beginning Balance at Dec. 31, 2018	2,781	238	473,833	133,781	(2,108)	608,525
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				30,337		30,337
Other comprehensive income					9,274	9,274
Common dividends declared				(11,663)		(11,663)
Preferred dividends declared				(165)		(165)
Preferred stock, premium amortization	(97)			97		97
Share-based compensation expense			1,339			1,339
Issuance of common stock under employee benefit plans		1	2,240			2,241
Ending Balance at Jun. 30, 2019	2,684	239	477,412	152,387	7,166	639,888
Beginning Balance at Mar. 31, 2019	2,733	238	475,811	141,906	3,480	624,168
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				16,355		16,355
Other comprehensive income					3,686	3,686
Common dividends declared				(5,840)		(5,840)
Preferred dividends declared				(83)		(83)
Preferred stock, premium amortization	(49)			49		49
Share-based compensation expense			493			493
Issuance of common stock under employee benefit plans		1	1,108			1,109
Ending Balance at Jun. 30, 2019	$ 2,684	$ 239	$ 477,412	$ 152,387	$ 7,166	$ 639,888

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 30,337,000	$ 14,588,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	7,319,000	3,860,000
Depreciation on premises and equipment	3,186,000	3,083,000
Amortization of intangible assets	3,483,000	3,251,000
Amortization of operating lease right-of-use asset	1,353,000
Share-based compensation expense	1,339,000	831,000
Increase in cash surrender value of life insurance	(1,810,000)	(1,737,000)
Investment securities amortization, net	1,925,000	1,814,000
(Gain) loss on sales of investment securities, net	(14,000)	5,000
Gain on sales of other real estate owned	(54,000)	(473,000)
Impairment of other real estate owned	16,000	126,000
Origination of loans held for sale	(233,845,000)	(251,501,000)
Proceeds from sales of loans held for sale	248,704,000	269,899,000
Gain on loans sold and held for sale	(7,563,000)	(5,372,000)
Loss on disposals of premises and equipment	9,000
Amortization of mortgage servicing rights	1,353,000	1,671,000
(Recapture) impairment of mortgage servicing rights	(534,000)	633,000
(Gain) loss on mortgage servicing rights held for sale	(515,000)	188,000
Net change in operating assets and liabilities:
Accrued interest receivable	1,051,000	1,329,000
Accrued interest payable	600,000	667,000
Accrued income taxes receivable	8,209,000	3,789,000
Operating lease liabilities	(1,483,000)
Other assets	(3,308,000)	(8,994,000)
Other liabilities	(6,210,000)	(640,000)
Net cash provided by operating activities	53,548,000	37,017,000
Investment securities available for sale:
Purchases	(32,539,000)	(59,031,000)
Sales	28,465,000	16,869,000
Maturities and payments	62,680,000	71,483,000
Equity Securities:
Purchases	(31,000)	(29,000)
Sales	105,000	7,733,000
Net decrease (increase) in loans	59,998,000	(86,122,000)
Proceeds from sale of premises and equipment	31,000	183,000
Purchases of premises and equipment	(3,210,000)	(4,087,000)
Proceeds from sales of mortgage servicing rights held for sale	3,288,000	13,101,000
Purchases of nonmarketable equity securities	(10,271,000)	(14,045,000)
Sales of nonmarketable equity securities	9,568,000	6,601,000
Proceeds from sales of other real estate owned	1,274,000	3,226,000
Net cash acquired in acquisition		36,153,000
Net cash provided by (used in) investing activities	119,358,000	(7,965,000)
Cash flows from financing activities:
Net decrease in deposits	(62,963,000)	(82,362,000)
Net decrease in short-term borrowings	(10,391,000)	(41,590,000)
Proceeds from FHLB borrowings	295,000,000	657,000,000
Payments made on FHLB borrowings	(350,393,000)	(491,257,000)
Payments made on other borrowings	(2,857,000)	(1,429,000)
Cash dividends paid on preferred stock	(165,000)	(166,000)
Cash dividends paid on common stock	(11,663,000)	(9,472,000)
Proceeds from issuance of common stock under employee benefit plans	2,241,000	1,353,000
Net cash (used in) provided by financing activities	(141,191,000)	32,077,000
Net increase in cash and cash equivalents	31,715,000	61,129,000
Cash and cash equivalents:
Beginning of period	213,700,000	215,202,000
End of period	245,415,000	276,331,000
Cash payments for:
Interest paid on deposits and borrowed funds	27,790,000	17,111,000
Income tax paid (net of refunds)	612,000	528,000
Supplemental disclosures of noncash investing and financing activities:
Transfer of loans to other real estate owned	$ 1,719,000	765,000
Transfer of mortgage servicing rights at lower of cost or market to mortgage servicing rights held for sale		$ 3,649,000

BUSINESS DESCRIPTION

6 Months Ended

Jun. 30, 2019

BUSINESS DESCRIPTION

BUSINESS DESCRIPTION

Note 1 – Business Description

Midland States Bancorp, Inc. (the “Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Its wholly owned banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, business equipment finance, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, multifamily and healthcare facility Federal Housing Administration (“FHA”) financing is provided through Love Funding Corporation (“Love Funding”), our non-bank subsidiary.

Our principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. We have derived income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investment securities. We have also derived income from noninterest sources, such as: fees received in connection with various lending and deposit services; wealth management services; residential mortgage loan originations, sales and servicing; and, from time to time, gains on sales of assets. Our income sources also include Love Funding’s commercial FHA loan origination and servicing income. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for loan losses and income tax expense.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of the Company are unaudited and should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019. The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. A discussion of these policies can be found in Note 1 – Summary of Significant Accounting Policies included in the Company's 2018 Annual Report on Form 10-K. There has been one change to our significant accounting policies since December 31, 2018, which is described below. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for the interim periods presented herein, have been included. Certain reclassifications of 2018 amounts have been made to conform to the 2019 presentation. Management has evaluated subsequent events for potential recognition or disclosure. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or any other period.

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements.

Accounting Guidance Adopted in 2019

FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize leases on-balance sheet and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases;” and ASU No. 2018-11, “Targeted Improvements.” The new standard established a right-of-use (“ROU”) model, that requires a lessee to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. Under the new guidance, leases are classified as either finance or operating, with classification

affecting the pattern and classification of expense recognition in the statement of income. The Company adopted the new standard on January 1, 2019, and used the effective date as our date of initial application.

A modified retrospective adoption approach is required, applying the new standard to all existing leases in effect at the adoption date and new leases going forward. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to January 1, 2019. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company elected the “package of practical expedients” permitted by ASU 2018-11, which allows us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

The new standard also provides practical expedients for ongoing accounting. The Company elected the short-term lease recognition exemption for our office equipment leases. This means, for those leases that qualify, we did recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition.

At the adoption date, the Company reported increased assets and liabilities of approximately $12.1 million on its consolidated balance sheet as a result of recognizing ROU assets and lease liabilities related to non-cancelable operating lease agreements for office space. The adoption of this guidance did not have a material effect to its consolidated statement of income.

Accounting Guidance Issued But Not Yet Adopted

FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”).” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better understand their credit loss estimates. For public companies that are filers with the SEC, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. As previously disclosed, the Company has established a cross-functional governance structure, which oversees overall strategy for implementation of Topic 326. Additionally, a working group was formed and has developed a project plan focused on understanding the ASU, researching issues, data requirements, technology solutions and future state processes. The project plan is targeting the model validation completion by a third party during the third quarter of 2019, with parallel processing of our existing allowance for loan loss model with CECL prior to implementation during the third and fourth quarters of 2019. The working group has identified 12 distinct loan portfolios for which a model has been developed and internally validated. The Company continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. The Company also continues to believe that the adoption of the standard will result in an overall increase in the allowance for loan losses to cover credit losses over the estimated life of the financial assets. However, the magnitude of the increase in its allowance for loan losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time.

FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – In August 2018, the FASB issued ASU No. 2018-13 to improve the disclosure requirements on fair value measurements. The amendment removes certain disclosures required by Topic 820 related to transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements. The update also adds certain disclosure requirements related to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption

permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements, but it is not expected to have a material impact.

INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2019

INVESTMENT SECURITIES

INVESTMENT SECURITIES

Note 4 – Investment Securities

Investment securities as of June 30, 2019 and December 31, 2018 were as follows:


	June 30, 2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available for sale securities
Government sponsored entity debt securities	$	74,286	$	589	$	—	$	74,875
Agency mortgage-backed securities		294,432		3,126		196		297,362
State and municipal securities		138,181		5,559		11		143,729
Corporate securities		92,874		1,251		434		93,691
Total available for sale securities	$	599,773	$	10,525	$	641	$	609,657
Equity securities							$	3,369


	December 31, 2018
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	25,018	$	—	$	368	$	24,650
Government sponsored entity debt securities		76,554		17		887		75,684
Agency mortgage-backed securities		329,690		371		3,756		326,305
State and municipal securities		156,795		3,282		815		159,262
Corporate securities		72,302		383		1,135		71,550
Total available for sale securities	$	660,359	$	4,053	$	6,961	$	657,451
Equity securities							$	3,334

Unrealized losses and fair values for investment securities available for sale as of June 30, 2019 and December 31, 2018, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:


	June 30, 2019
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available for sale securities
Government sponsored entity debt securities	$	—	$	—	$	—	$	—	$	—	$	—
Agency mortgage-backed securities		25,257		30		40,366		166		65,623		196
State and municipal securities		836		4		3,348		7		4,184		11
Corporate securities		18,053		287		6,390		147		24,443		434
Total available for sale securities	$	44,146	$	321	$	50,104	$	320	$	94,250	$	641


	December 31, 2018
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	5,012	$	1	$	19,638	$	367	$	24,650	$	368
Government sponsored entity debt securities		51,717		195		23,223		692		74,940		887
Agency mortgage-backed securities		139,115		528		126,561		3,228		265,676		3,756
State and municipal securities		15,791		146		27,692		669		43,483		815
Corporate securities		32,616		575		8,535		560		41,151		1,135
Total available for sale securities	$	244,251	$	1,445	$	205,649	$	5,516	$	449,900	$	6,961

For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and unrealized losses are considered to be temporary as the fair value is expected to recover as the securities approach maturity date.

We evaluate securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value.

At June 30, 2019, 51 investment securities available for sale had unrealized losses with aggregate depreciation of 0.68% from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. The Company does not have the intent to sell and it is not more likely than not that it will be required to sell a security in an unrealized loss position prior to recovery in value; therefore, the Company does not consider these securities to be other than temporarily impaired at June 30, 2019.

For the three and six months ended June 30, 2019 and 2018, the Company did not recognize OTTI losses on its investment securities.

The following is a summary of the amortized cost and fair value of the available-for-sale investment securities, by maturity, at June 30, 2019. Expected maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be prepaid without penalties. The maturities of all other available-for-sale investment securities are based on final contractual maturity.


	Amortized		Fair
(dollars in thousands)	cost		value
Available for sale securities
Within one year	$	47,428	$	47,545
After one year through five years		79,332		81,206
After five years through ten years		152,041		155,775
After ten years		26,540		27,769
Mortgage-backed securities		294,432		297,362
Total available for sale securities	$	599,773	$	609,657

Proceeds from the sale of securities available for sale were $28.5 million for both the three and six months ended June 30, 2019. Gross realized gains and gross realized losses from the sale of securities available for sale were $126,000 and $190,000, respectively, for both the three and six months ended June 30, 2019.

Proceeds from the sale of securities available for sale were $15.3 million and $16.9 million for the three and six months ended June 30, 2018, respectively. Gross realized gains from the sale of securities available for sale were $8,000 and $73,000 for the three and six months ended June 30, 2018, respectively. Gross realized losses from the sale of securities available for sale were $25,000 for both the three and six months ended June 30, 2018.

Proceeds from the sale of equity securities were $105,000 for the three and six months ended June 30, 2019.

Gross realized gains from the sale of equity securities were $78,000 for the three and six months ended June 30, 2019. There were no gross realized losses from the sale of equity securities for the three and six months ended June 30, 2019. During the three and six months ended June 30, 2019, the Company recognized net unrealized losses of $30,000 and net unrealized gains of $37,000, respectively, on equity securities, which was recorded as other income in the consolidated statements of income.

Proceeds from the sale of equity securities were $7.7 million for the three and six months ended June 30, 2018. Gross realized losses from the sale of equity securities were $53,000 for the three and six months ended June 30, 2018. There were no gross realized gains from the sale of equity securities for the three and six months ended June 30, 2018. During the three and six months ended June 30, 2018, the Company recognized net unrealized losses of $18,000 and net unrealized gains of $93,000, respectively, on equity securities, which was recorded as other income in the consolidated statements of income.

LOANS

6 Months Ended

Jun. 30, 2019

LOANS

LOANS

Note 5 – Loans

The following table presents total loans outstanding by portfolio, which includes non-purchased credit impaired (“Non-PCI”) loans and purchased credit impaired (“PCI”) loans, as of June 30, 2019 and December 31, 2018:


	June 30, 2019						December 31, 2018
	Non-PCI		PCI				Non-PCI		PCI
(dollars in thousands)	Loans		Loans ⁽¹⁾		Total		Loans		Loans ⁽¹⁾		Total
Commercial	$	848,587	$	2,974	$	851,561	$	806,027	$	4,857	$	810,884
Commercial real estate		1,508,683		15,686		1,524,369		1,619,903		19,252		1,639,155
Construction and land development		244,188		6,226		250,414		223,898		8,331		232,229
Total commercial loans		2,601,458		24,886		2,626,344		2,649,828		32,440		2,682,268
Residential real estate		544,061		8,345		552,406		569,289		8,759		578,048
Consumer		595,728		1,240		596,968		611,408		1,776		613,184
Lease financing		297,809		—		297,809		264,051		—		264,051
Total loans	$	4,039,056	$	34,471	$	4,073,527	$	4,094,576	$	42,975	$	4,137,551

(1)	The unpaid principal balance for PCI loans totaled $45.0 million and $56.9 million as of June 30, 2019 and December 31, 2018, respectively.

Total loans include net deferred loan fees of $3.0 million and $11.6 million at June 30, 2019 and December 31, 2018, respectively, and unearned income of $34.2 million and $29.2 million within the lease financing portfolio at June 30, 2019 and December 31, 2018, respectively.

At June 30, 2019 and December 31, 2018, the Company had commercial and residential loans held for sale totaling $22.1 million and $30.4 million, respectively. During the three and six months ended June 30, 2019, the Company sold commercial and residential real estate loans with proceeds totaling $149.4 million and $248.7 million, respectively, and sold commercial and residential real estate loans with proceeds totaling $115.9 million and $269.9 million for the comparable periods in 2018, respectively.

The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates totaled $24.5 million and $26.5 million at June 30, 2019 and December 31, 2018, respectively. During the three and six months ended June 30, 2019, there were $1.6 million and $3.1 million of new loans and other additions, respectively, while repayments and other reductions totaled $643,000 and $5.1 million, respectively.

Credit Quality Monitoring

The Company maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally within the Company’s four main regions, which include eastern, northern and southern Illinois and the St. Louis metropolitan area. Our equipment leasing business provides financing to business customers across the country.

The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the

relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Company’s Consumer Collections Group for resolution. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.

The Company maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Company also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Company.

Credit Quality Indicators

The Company uses a ten grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, and coverage and payment behavior as shown in the borrower’s financial statements. The risk grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors.

The Company considers all loans with Risk Grades of 1 – 6 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans with Risk Grades of 7 are considered “watch credits” and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans with Risk Grades of 8 – 10 are considered problematic and require special care. Further, loans with Risk Grades of 7 – 10 are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Company, which includes highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Company’s Special Assets Group. Loans not graded in the commercial loan portfolio are monitored by aging status and payment activity.

The following table presents the recorded investment of the commercial loan portfolio (excluding PCI loans) by risk category as of June 30, 2019 and December 31, 2018:


	June 30, 2019								December 31, 2018
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
(dollars in thousands)	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	796,947	$	1,403,625	$	238,050	$	2,438,622	$	748,296	$	1,536,127	$	218,798	$	2,503,221
Special mention		22,391		23,284		2,491		48,166		35,103		15,306		3,448		53,857
Substandard		21,086		53,152		884		75,122		14,139		46,976		—		61,115
Substandard – nonaccrual		8,163		28,622		1,312		38,097		8,489		21,494		1,171		31,154
Doubtful		—		—		—		—		—		—		—		—
Not graded		—		—		1,451		1,451		—		—		481		481
Total (excluding PCI)	$	848,587	$	1,508,683	$	244,188	$	2,601,458	$	806,027	$	1,619,903	$	223,898	$	2,649,828

The Company evaluates the credit quality of its other loan portfolio based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, loans past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be impaired for purposes of credit quality evaluation. The following table presents the recorded investment of our other loan portfolio (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of June 30, 2019 and December 31, 2018:


	June 30, 2019								December 31, 2018
	Residential				Lease				Residential				Lease
(dollars in thousands)	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	535,528	$	595,339	$	296,776	$	1,427,643	$	562,019	$	610,839	$	263,094	$	1,435,952
Impaired		8,533		389		1,033		9,955		7,270		569		957		8,796
Total (excluding PCI)	$	544,061	$	595,728	$	297,809	$	1,437,598	$	569,289	$	611,408	$	264,051	$	1,444,748

Impaired Loans

Impaired loans include loans on nonaccrual status, loans past due 90 days or more and still accruing interest and loans modified under troubled debt restructurings. Impaired loans at June 30, 2019 and December 31, 2018 do not include $34.5 million and $43.0 million, respectively, of PCI loans. The risk of credit loss on acquired loans was recognized as part of the fair value adjustment at the acquisition date.

There was no interest income recognized on nonaccrual loans during the three and six months ended June 30, 2019 and 2018 while the loans were in nonaccrual status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $666,000 and $1.3 million for the three and six months ended June 30, 2019, respectively, and $346,000 and $846,000 for the three and six months ended June 30, 2018, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $29,000 and $61,000 for the three and six months ended June 30, 2019, respectively, and $28,000 and $58,000 for the comparable periods in 2018, respectively.

The following table presents impaired loans (excluding PCI loans) by portfolio and related valuation allowance as of June 30, 2019 and December 31, 2018:


	June 30, 2019						December 31, 2018
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
(dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	7,863	$	8,380	$	5,311	$	7,945	$	8,102	$	4,448
Commercial real estate		13,616		14,235		4,395		7,496		13,844		523
Construction and land development		109		155		12		171		171		54
Residential real estate		5,174		5,915		668		4,055		4,662		554
Consumer		379		427		34		428		444		45
Lease financing		494		494		262		766		766		361
Total impaired loans with a valuation allowance		27,635		29,606		10,682		20,861		27,989		5,985
Impaired loans with no related valuation allowance:
Commercial		915		3,991		—		983		4,392		—
Commercial real estate		16,967		23,739		—		16,372		16,921		—
Construction and land development		1,251		1,253		—		1,136		1,136		—
Residential real estate		3,359		3,639		—		3,215		3,516		—
Consumer		10		12		—		141		145		—
Lease financing		539		538		—		191		191		—
Total impaired loans with no related valuation allowance		23,041		33,172		—		22,038		26,301		—
Total impaired loans:
Commercial		8,778		12,371		5,311		8,928		12,494		4,448
Commercial real estate		30,583		37,974		4,395		23,868		30,765		523
Construction and land development		1,360		1,408		12		1,307		1,307		54
Residential real estate		8,533		9,554		668		7,270		8,178		554
Consumer		389		439		34		569		589		45
Lease financing		1,033		1,032		262		957		957		361
Total impaired loans (excluding PCI)	$	50,676	$	62,778	$	10,682	$	42,899	$	54,290	$	5,985

The difference between a loan’s recorded investment and the unpaid principal balance represents: (1) a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan’s principal balance and management’s assessment that the full collection of the loan balance is not likely and/or (2) payments received on nonaccrual loans that are fully applied to principal on the loan’s recorded investment as compared to being applied to principal and interest on the unpaid customer principal and interest balance. The difference between the recorded investment and the unpaid principal balance on loans was $12.1 million and $11.4 million at June 30, 2019 and December 31, 2018, respectively.

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the three months ended June 30, 2019 and 2018 are included in the table below:


	Three Months Ended June 30,
	2019				2018
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,007	$	7	$	1,229	$	7
Commercial real estate		9,435		23		2,589		21
Construction and land development		111		—		100		1
Residential real estate		5,236		8		4,167		10
Consumer		395		—		166		—
Lease financing		494		—		447		—
Total impaired loans with a valuation allowance		23,678		38		8,698		39
Impaired loans with no related valuation allowance:
Commercial		937		—		864		—
Commercial real estate		21,313		—		15,876		—
Construction and land development		1,252		1		711		—
Residential real estate		3,367		3		2,360		2
Consumer		10		1		20		—
Lease financing		538		—		321		—
Total impaired loans with no related valuation allowance		27,417		5		20,152		2
Total impaired loans:
Commercial		8,944		7		2,093		7
Commercial real estate		30,748		23		18,465		21
Construction and land development		1,363		1		811		1
Residential real estate		8,603		11		6,527		12
Consumer		405		1		186		—
Lease financing		1,032		—		768		—
Total impaired loans (excluding PCI)	$	51,095	$	43	$	28,850	$	41

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the six months ended June 30, 2019 and 2018 are included in the table below:


	Six Months Ended June 30,
	2019				2018
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,448	$	13	$	1,279	$	17
Commercial real estate		9,381		50		2,769		41
Construction and land development		119		—		101		2
Residential real estate		5,264		19		4,173		21
Consumer		413		—		175		—
Lease financing		494		—		447		—
Total impaired loans with a valuation allowance		24,119		82		8,944		81
Impaired loans with no related valuation allowance:
Commercial		955		—		888		—
Commercial real estate		21,512		—		16,138		—
Construction and land development		1,261		1		725		—
Residential real estate		3,379		5		2,381		2
Consumer		11		1		21		—
Lease financing		538		—		321		—
Total impaired loans with no related valuation allowance		27,656		7		20,474		2
Total impaired loans:
Commercial		9,403		13		2,167		17
Commercial real estate		30,893		50		18,907		41
Construction and land development		1,380		1		826		2
Residential real estate		8,643		24		6,554		23
Consumer		424		1		196		—
Lease financing		1,033		—		768		—
Total impaired loans (excluding PCI)	$	51,776	$	89	$	29,418	$	83

The aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of June 30, 2019 and December 31, 2018 were as follows:



	Accruing
	30-59		60-89		Past Due
	Days		Days		90 Days				Total				Total
(dollars in thousands)	Past Due		Past Due		or More		Nonaccrual		Past Due		Current		Loans
June 30, 2019
Commercial	$	3,828	$	2,777	$	—	$	8,163	$	14,768	$	833,819	$	848,587
Commercial real estate		1,489		1,501		—		28,622		31,612		1,477,071		1,508,683
Construction and land development		—		—		—		1,312		1,312		242,876		244,188
Residential real estate		544		643		—		7,831		9,018		535,043		544,061
Consumer		5,456		3,774		4		338		9,572		586,156		595,728
Lease financing		1,112		430		302		731		2,575		295,234		297,809
Total (excluding PCI)	$	12,429	$	9,125	$	306	$	46,997	$	68,857	$	3,970,199	$	4,039,056
December 31, 2018
Commercial	$	4,013	$	2,581	$	4	$	8,489	$	15,087	$	790,940	$	806,027
Commercial real estate		1,667		945		149		21,494		24,255		1,595,648		1,619,903
Construction and land development		989		—		85		1,171		2,245		221,653		223,898
Residential real estate		1,292		728		566		5,894		8,480		560,809		569,289
Consumer		5,211		2,533		51		388		8,183		603,225		611,408
Lease financing		4,322		932		206		751		6,211		257,840		264,051
Total (excluding PCI)	$	17,494	$	7,719	$	1,061	$	38,187	$	64,461	$	4,030,115	$	4,094,576

Troubled Debt Restructurings

Loans modified as TDRs for commercial and commercial real estate loans generally consist of allowing commercial borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans’

contractual terms. TDRs that continue to accrue interest and are greater than $50,000 are individually evaluated for impairment on a quarterly basis, and transferred to nonaccrual status when it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the contractual terms of the loan. TDRs that subsequently default are individually evaluated for impairment at the time of default. The allowance for loan losses on TDRs totaled $412,000 and $557,000 as of June 30, 2019 and December 31, 2018, respectively. The Company had no unfunded commitments in connection with TDRs at June 30, 2019 and December 31, 2018.

The Company’s TDRs are identified on a case-by-case basis in connection with the ongoing loan collection processes. The following table presents TDRs by loan portfolio (excluding PCI loans) as of June 30, 2019 and December 31, 2018:


	June 30, 2019						December 31, 2018
(dollars in thousands)	Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total		Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total
Commercial	$	615	$	386	$	1,001	$	435	$	406	$	841
Commercial real estate		1,961		10,695		12,656		2,225		9,103		11,328
Construction and land development		48		174		222		51		—		51
Residential real estate		702		1,467		2,169		810		853		1,663
Consumer		47		—		47		130		—		130
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	3,373	$	12,722	$	16,095	$	3,651	$	10,362	$	14,013

(1)	These loans are still accruing interest.

(2)	These loans are included in non-accrual loans in the preceding tables.

The following table presents a summary of loans by portfolio that were restructured during the three and six months ended June 30, 2019 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and six months ended June 30, 2019:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended June 30, 2019
Troubled debt restructurings:
Number of loans		1		—		—		2		—		—		3
Pre-modification outstanding balance	$	249	$	—	$	—	$	106	$	—	$	—	$	355
Post-modification outstanding balance		249		—		—		109		—		—		358

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the six months ended June 30, 2019
Troubled debt restructurings:
Number of loans		1		3		1		9		2		—		16
Pre-modification outstanding balance	$	—	$	1,924	$	62	$	330	$	15	$	—	$	2,331
Post-modification outstanding balance		249		1,838		16		324		16		—		2,443

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		1		—		—		—		1
Recorded balance	$	—	$	—	$	43	$	—	$	—	$	—	$	43

The following table presents a summary of loans by portfolio that were restructured during the three and six months ended June 30, 2018 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and six months ended June 30, 2018:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended June 30, 2018:
Troubled debt restructurings:
Number of loans		1		—		—		3		4		—		8
Pre-modification outstanding balance	$	23	$	—	$	—	$	212	$	19	$	—	$	254
Post-modification outstanding balance		22		—		—		207		19		—		248

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the six months ended June 30, 2018:
Troubled debt restructurings:
Number of loans		1		—		—		3		4		—		8
Pre-modification outstanding balance	$	23	$	—	$	—	$	212	$	19	$	—	$	254
Post-modification outstanding balance		22		—		—		207		19		—		248

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Purchased Credit Impaired Loans

The Company has purchased loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Accretable yield of PCI loans, or income expected to be collected, was as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Balance, at beginning of period	$	11,063	$	7,630	$	12,240	$	5,732
New loans purchased – Alpine acquisition		—		—		—		1,245
Accretion		(1,937)		(1,190)		(3,013)		(2,351)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		194		(181)		88		479
Reclassification from non-accretable		1,079		5		1,084		1,159
Balance, at end of period	$	10,399	$	6,264	$	10,399	$	6,264

Accretion recorded as loan interest income totaled $1.9 million and $3.0 million during the three and six months ended June 30, 2019, respectively, and $1.2 million and $2.4 million for the comparable periods in 2018, respectively.

Allowance for Loan Losses

The Company’s loan portfolio is principally comprised of commercial, commercial real estate, construction and land development, residential real estate and consumer loans and lease financing receivables. The principal risks to each category of loans are as follows:

Commercial – The principal risk of commercial loans is that these loans are primarily made based on the identified cash flow of the borrower and secondarily on the collateral underlying the loans. Most often, this collateral consists of accounts receivable, inventory and equipment. Inventory and equipment may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. If the cash flow from business operations is reduced, the borrower’s ability to repay the loan may be impaired. As such, repayment of such loans is often more sensitive than other types of loans to adverse conditions in the general economy.

Commercial real estate – As with commercial loans, repayment of commercial real estate loans is often dependent on the borrower’s ability to make repayment from the cash flow of the commercial venture. While commercial real estate loans are collateralized by the borrower’s underlying real estate, foreclosure on such assets may be more difficult than with other types of collateralized loans because of the possible effect the foreclosure would have on the borrower’s business, and property values may tend to be partially based upon the value of the business situated on the property.

Construction and land development – Construction and land development lending involves additional risks not generally present in other types of lending because funds are advanced upon the estimated future value of the project, which is uncertain prior to its completion and at the time the loan is made, and costs may exceed realizable values in declining real estate markets. Moreover, if the estimate of the value of the completed project proves to be overstated or market values or rental rates decline, the collateral may prove to be inadequate security for the repayment of the loan. Additional funds may also be required to complete the project, and the project may have to be held for an unspecified period of time before a disposition can occur.

Residential real estate – The principal risk to residential real estate lending is associated with residential loans not sold into the secondary market. In such cases, the value of the underlying property may have deteriorated as a result of a change in the residential real estate market, and the borrower may have little incentive to repay the loan or continue living in the property. Additionally, in areas with high vacancy rates, reselling the property without substantial loss may be difficult.

Consumer – The repayment of consumer loans is typically dependent on the borrower remaining employed through the life of the loan, as well as the possibility that the collateral underlying the loan, if applicable, may not be adequately maintained by the borrower.

Lease financing – Our financing leases are primarily for business equipment leased to varying types of businesses, nationwide, for the purchase of business equipment and software. If the cash flow from business operations is reduced, the business’s ability to repay may become impaired.

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and six months ended June 30, 2019 and 2018:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses for the three months ended June 30, 2019:
Balance, beginning of period	$	9,545	$	6,617	$	398	$	2,424	$	2,137	$	1,970	$	23,091
Provision for loan losses		558		2,262		(85)		174		326		841		4,076
Charge-offs		(2)		(269)		—		(223)		(465)		(691)		(1,650)
Recoveries		14		29		3		49		221		92		408
Balance, end of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925

Changes in allowance for loan losses for the six months ended June 30, 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for loan losses		676		4,207		(22)		688		655		1,115		7,319
Charge-offs		(114)		(327)		(44)		(376)		(1,021)		(1,150)		(3,032)
Recoveries		29		36		10		71		431		158		735
Balance, end of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925


Changes in allowance for loan losses for the three months ended June 30, 2018:
Balance, beginning of period	$	5,902	$	5,485	$	328	$	2,504	$	1,309	$	2,176	$	17,704
Provision for loan losses		1,224		(310)		157		279		522		(18)		1,854
Charge-offs		(1,120)		(99)		—		(103)		(349)		(473)		(2,144)
Recoveries		197		301		20		62		147		105		832
Balance, end of period	$	6,203	$	5,377	$	505	$	2,742	$	1,629	$	1,790	$	18,246

Changes in allowance for loan losses for the six months ended June 30, 2018:
Balance, beginning of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Provision for loan losses		1,791		197		(58)		18		826		1,086		3,860
Charge-offs		(1,145)		(259)		—		(139)		(783)		(959)		(3,285)
Recoveries		301		395		45		113		242		144		1,240
Balance, end of period	$	6,203	$	5,377	$	505	$	2,742	$	1,629	$	1,790	$	18,246

The following table represents, by loan portfolio, details regarding the balance in the allowance for loan losses and the recorded investment in loans as of June 30, 2019 and December 31, 2018 by impairment evaluation method:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
June 30, 2019:

Allowance for loan losses:
Loans individually evaluated for impairment	$	5,242	$	4,361	$	—	$	294	$	—	$	235	$	10,132
Loans collectively evaluated for impairment		69		34		12		374		34		27		550
Non-impaired loans collectively evaluated for impairment		4,788		3,481		304		1,349		1,992		1,950		13,864
Loans acquired with deteriorated credit quality ⁽¹⁾		16		763		—		407		193		—		1,379
Total allowance for loan losses	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	8,175	$	30,286	$	1,251	$	4,926	$	—	$	792	$	45,430
Impaired loans collectively evaluated for impairment		603		297		109		3,607		389		241		5,246
Non-impaired loans collectively evaluated for impairment		839,809		1,478,100		242,828		535,528		595,339		296,776		3,988,380
Loans acquired with deteriorated credit quality ⁽¹⁾		2,974		15,686		6,226		8,345		1,240		—		34,471
Total recorded investment (loan balance)	$	851,561	$	1,524,369	$	250,414	$	552,406	$	596,968	$	297,809	$	4,073,527

December 31, 2018:

Allowance for loan losses:
Loans individually evaluated for impairment	$	4,405	$	476	$	48	$	233	$	—	$	330	$	5,492
Loans collectively evaluated for impairment		43		47		6		321		45		31		493
Non-impaired loans collectively evaluated for impairment		4,971		3,356		318		1,051		1,926		1,728		13,350
Loans acquired with deteriorated credit quality ⁽¹⁾		105		844		—		436		183		—		1,568
Total allowance for loan losses	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	8,520	$	23,431	$	1,249	$	3,929	$	5	$	668	$	37,802
Impaired loans collectively evaluated for impairment		408		437		58		3,341		564		289		5,097
Non-impaired loans collectively evaluated for impairment		797,099		1,596,035		222,591		562,019		610,839		263,094		4,051,677
Loans acquired with deteriorated credit quality ⁽¹⁾		4,857		19,252		8,331		8,759		1,776		—		42,975
Total recorded investment (loan balance)	$	810,884	$	1,639,155	$	232,229	$	578,048	$	613,184	$	264,051	$	4,137,551

(1)	Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows.

PREMISES AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2019

PREMISES AND EQUIPMENT, NET

PREMISES AND EQUIPMENT, NET

Note 6 – Premises and Equipment, Net

A summary of premises and equipment as of June 30, 2019 and December 31, 2018 is as follows:


	June 30,		December 31,
(dollars in thousands)	2019		2018
Land	$	20,231	$	20,231
Buildings and improvements		78,782		76,141
Furniture and equipment		30,194		29,858
Total		129,207		126,230
Accumulated depreciation		(34,383)		(31,390)
Premises and equipment, net	$	94,824	$	94,840

Depreciation expense of $1.6 million and $3.2 million was recorded for the three and six months ended June 30, 2019, respectively, and $1.6 million and $3.1 million for the comparable periods in 2018, respectively.

LEASES

6 Months Ended

Jun. 30, 2019

LEASES

LEASES

Note 7 – Leases

The Company determines if a lease is present at the inception of an agreement. Operating leases are capitalized at commencement and are discounted using the Company’s FHLB borrowing rate for a similar term borrowing unless the lease defines an implicit rate within the contract. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

The ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. No significant judgments or assumptions were involved in developing the estimated operating lease liabilities as the Company’s operating lease liabilities largely represent future rental expenses associated with operating leases and the borrowing rates are based on publicly available interest rates.

The Company has operating leases for banking centers and operating facilities. Our leases have remaining lease terms of 2 months to 13 years, some of which may include options to extend the lease terms for up to an additional 5 years. The options to extend are included if they are reasonably certain to be exercised.

As of June 30, 2019, operating lease ROU assets totaled $10.2 million and operating lease liabilities totaled $10.7 million.

Information related to operating leases for the three and six months ended June 30, 2019 was as follows:


	Three Months Ended			Six Months Ended
(dollars in thousands)	June 30, 2019			June 30, 2019
Operating lease cost	$	706		$	1,415
Operating cash flows from leases		742			1,483
Right-of-use assets obtained in exchange for lease obligations		181			12,281
Weighted average remaining lease term		5.9 years			5.9 years
Weighted average discount rate		3.12	%		3.12	%

The projected minimum rental payments under the terms of the leases as of June 30, 2019 were as follows:


(dollars in thousands)	Amount
Year ending December 31:
2019 remaining	$	1,143
2020		2,382
2021		2,229
2022		2,119
2023		1,594
Thereafter		2,322
Total future minimum lease payments		11,789
Less imputed interest		(1,070)
Total operating lease liabilities	$	10,719

MORTGAGE SERVICING RIGHTS

6 Months Ended

Jun. 30, 2019

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

Note 8 – Mortgage Servicing Rights

The Company serviced commercial FHA mortgage loans for others with unpaid principal balances of approximately $4.03 billion and $3.98 billion at June 30, 2019 and December 31, 2018, respectively. Changes in our commercial FHA mortgage servicing rights were as follows for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Mortgage servicing rights:
Balance, beginning of period	$	55,787	$	56,039	$	56,252	$	55,714
Originated servicing		1,350		911		1,563		1,912
Amortization		(675)		(682)		(1,353)		(1,358)
Balance, end of period		56,462		56,268		56,462		56,268
Valuation allowances:
Balance, beginning of period		2,830		3,387		2,805		3,254
Additions		—		500		25		633
Reductions		(559)		—		(559)		—
Balance, end of period		2,271		3,887		2,271		3,887
Mortgage servicing rights, net	$	54,191	$	52,381	$	54,191	$	52,381
Fair value:
At beginning of period	$	52,957	$	52,652	$	53,447	$	52,460
At end of period	$	54,191	$	52,381	$	54,191	$	52,381

The following table is a summary of key assumptions, representing both general economic and other published information and the weighted average characteristics of the commercial portfolio, used in the valuation of servicing rights at June 30, 2019 and December 31, 2018. Assumptions used in the prepayment rate consider many factors as appropriate, including lockouts, balloons, prepayment penalties, interest rate ranges, delinquencies and geographic location. The discount rate is based on an average pre-tax internal rate of return utilized by market participants in pricing the servicing portfolio. Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement.


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
(dollars in thousands)	Fee		Rate		Maturity	Rate		Cost		Rate
June 30, 2019:
Commercial FHA mortgage loans	0.12	%	3.68	%	29.9	8.21	%	$	1,000	10 - 14	%

December 31, 2018:
Commercial FHA mortgage loans	0.13	%	3.67	%	30.1	8.24	%	$	1,000	10 - 14	%

We recognize revenue from servicing commercial FHA and residential mortgages as earned based on the specific contractual terms. This revenue, along with amortization of and changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Mortgage servicing rights do not trade in an active market with readily observable prices. The fair value of mortgage servicing rights and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Company’s servicing portfolio consists of the distinct portfolios of government-insured residential and commercial mortgages and conventional residential mortgages. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, cost to service, contractual servicing fee income, ancillary income, late fees, replacement reserves and other economic factors that are determined based on current market conditions.

At June 30, 2019 and December 31, 2018, the Company serviced residential mortgage loans for others with unpaid principal balances of approximately $58.6 million and $897.6 million, respectively. During the three and six months ended June 30, 2019, the Company sold mortgage servicing rights held for sale of zero and $3.3 million, respectively, and sold mortgage servicing rights held for sale of $2.7 million and $12.9 million for the comparable periods in 2018, respectively. At June 30, 2019, total residential mortgage servicing rights of $159,000 are reflected in the consolidated balance sheet as mortgage servicing rights held for sale.

GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2019

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Note 9 – Goodwill and Intangible Assets

At June 30, 2019 and December 31, 2018, goodwill totaled $164.7 million.

The following table summarizes the carrying amount of goodwill by segment at both June 30, 2019 and December 31, 2018.


(dollars in thousands)	Goodwill
Banking	$	149,035
Commercial FHA origination and servicing		10,892
Wealth management		4,746
Total goodwill	$	164,673

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of June 30, 2019 and December 31, 2018 are summarized as follows:


	June 30, 2019						December 31, 2018
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
(dollars in thousands)	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	52,712	$	(27,691)	$	25,021	$	52,712	$	(24,803)	$	27,909
Customer relationship intangibles		13,771		(4,899)		8,872		13,771		(4,304)		9,467
Total intangible assets	$	66,483	$	(32,590)	$	33,893	$	66,483	$	(29,107)	$	37,376

Amortization of intangible assets was $1.7 million and $3.5 million for the three and six months ended June 30, 2019, respectively, and $1.6 million and $3.3 million for the comparable periods in 2018, respectively.

DERIVATIVE INSTRUMENTS

6 Months Ended

Jun. 30, 2019

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Note 10 – Derivative Instruments

As part of the Company’s overall management of interest rate sensitivity, the Company utilizes derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest rate volatility, including interest rate lock commitments, forward commitments to sell mortgage-backed securities and interest rate swap contracts.

Interest Rate Lock Commitments / Forward Commitments to Sell Mortgage-Backed Securities

The Company issues interest rate lock commitments on originated fixed-rate commercial and residential real estate loans to be sold. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets or other liabilities in the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount and estimated fair values at June 30, 2019 and December 31, 2018:


	Notional Amount				Fair Value Gain
	June 30,		December 31,		June 30,		December 31,
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	183,562	$	264,710	$	3,791	$	4,492
Forward commitments to sell mortgage-backed securities		183,280		276,871		—		—
Total	$	366,842	$	541,581	$	3,791	$	4,492

Notional Amount

Fair Value Loss

June 30,

December 31,

June 30,

December 31,

(dollars in thousands)

2019

2018

2019

2018

Derivative Instruments (included in Other Liabilities):

Forward commitments to sell mortgage-backed securities

—

During the three and six months ended June 30, 2019, the Company recognized net losses of $2.0 million and $701,000, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

During the three and six months ended June 30, 2018, the Company recognized net losses of $2.0 million and $2.1 million, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Interest Rate Swap Contracts

The Company entered into interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity. These swaps are offset by contracts simultaneously purchased by the Company from other financial dealer institutions with mirror-image terms. Because of the mirror-image terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in the fair value subsequent to initial recognition have a minimal effect on earnings. These derivative contracts do not qualify for hedge accounting.

The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $9.2 million and $9.5 million at June 30, 2019 and December 31, 2018, respectively. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $286,000 and $145,000 at June 30, 2019 and December 31, 2018, respectively, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

DEPOSITS

6 Months Ended

Jun. 30, 2019

DEPOSITS

DEPOSITS

Note 11 – Deposits

The following table summarizes the classification of deposits as of June 30, 2019 and December 31, 2018:


	June 30,		December 31,
(dollars in thousands)	2019		2018
Noninterest-bearing demand	$	902,286	$	972,164
Interest-bearing:
Checking		1,009,023		1,002,275
Money market		732,573		862,171
Savings		442,017		442,132
Time		925,308		795,428
Total deposits	$	4,011,207	$	4,074,170

SHORT-TERM BORROWINGS

6 Months Ended

Jun. 30, 2019

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

Note 12 – Short-Term Borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of June 30, 2019 and December 31, 2018:


	Repurchase Agreements
	June 30,			December 31,
(dollars in thousands)	2019			2018
Outstanding at period-end	$	113,844		$	124,235
Average amount outstanding		128,058			138,135
Maximum amount outstanding at any month end		138,907			173,387
Weighted average interest rate:
During period		0.70	%		0.51	%
End of period		0.68	%		0.71	%

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $128.8 million and $132.2 million at June 30, 2019 and December 31, 2018, respectively, were pledged for securities sold under agreements to repurchase.

The Company had lines of credit of $50.9 million and $56.8 million at June 30, 2019 and December 31, 2018, respectively, from the Federal Reserve Discount Window. The lines are collateralized by a collateral agreement with

respect to a pool of commercial real estate loans totaling $60.0 million and $67.6 million at June 30, 2019 and December 31, 2018, respectively. There were no outstanding borrowings at June 30, 2019 and December 31, 2018.

At June 30, 2019, the Company had available federal funds lines of credit totaling $45.0 million. These lines of credit were unused at June 30, 2019.

FHLB ADVANCES AND OTHER BORROWINGS

6 Months Ended

Jun. 30, 2019

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

Note 13 – FHLB Advances and Other Borrowings

The following table summarizes our Federal Home Loan Bank (“FHLB”) advances and other borrowings as of June 30, 2019 and December 31, 2018:


	June 30,		December 31,
(dollars in thousands)	2019		2018
Midland States Bancorp, Inc.
Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 4.75% and 4.63% at June 30, 2019 and December 31, 2018, respectively, – maturing May 25, 2020	$	29,989	$	32,840
Series G redeemable preferred stock - 181 shares at $1,000 per share		181		181
Midland States Bank
FHLB advances – fixed rate, fixed term of $22.3 million and $87.7 million, at rates averaging 2.37% and 2.35% at June 30, 2019 and December 31, 2018, respectively – maturing through February 2023 and putable fixed rate of $530.0 million and $520.0 million at rates averaging 2.24% and 2.09% at June 30, 2019 and December 31, 2018, respectively – maturing through August 2025 with call provisions through August 2021		552,217		607,610
Total FHLB advances and other borrowings	$	582,387	$	640,631

In May 2017, the Company entered into a loan agreement with another bank for a revolving line of credit in the original principal amount of up to $10.0 million and a term loan in the original principal amount of $40.0 million. The term loan matures on May 25, 2020 and has a variable rate of interest equal to one-month LIBOR plus 2.25%. Beginning September 1, 2018, the Company was required to make quarterly principal and interest payments on the term loan of $1.4 million with the remaining principal and any unpaid interest due at maturity. The loan is unsecured with a negative pledge of shares of the Bank’s common stock. The loan agreement contains financial covenants that require the Company to maintain a minimum total capital to risk-weighted assets ratio, a minimum adjusted loan loss reserves to nonperforming loans ratio, a minimum fixed charge coverage ratio and a maximum percentage of nonperforming assets to tangible capital. At June 30, 2019, the Company was in compliance with each of these financial covenants.

The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $2.01 billion and $2.22 billion at June 30, 2019 and December 31, 2018, respectively.

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2019

EARNINGS PER SHARE

EARNINGS PER SHARE

Note 14 – Earnings Per Share

Earnings per share are calculated utilizing the two-class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. The diluted earnings per share computation for the three and six months ended June 30, 2019 and 2018 excluded antidilutive stock options of 96,837 and 31,259, respectively, because the exercise prices of these stock options exceeded the average market prices of the Company’s common shares for those respective periods. Presented below are the calculations for basic and diluted earnings per common share for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
		June 30,			June 30,
(dollars in thousands, except per share data)	2019		2018		2019		2018
Net income	$	16,355	$	12,782	$	30,337	$	14,588
Preferred dividends declared		(83)		(83)		(165)		(166)
Preferred stock, premium amortization		49		47		97		94
Net income available to common shareholders		16,321		12,746		30,269		14,516
Common shareholder dividends		(5,791)		(5,201)		(11,567)		(9,409)
Unvested restricted stock award dividends		(49)		(32)		(96)		(63)
Undistributed earnings to unvested restricted stock awards		(85)		(44)		(150)		(31)
Undistributed earnings to common shareholders	$	10,396	$	7,469	$	18,456	$	5,013
Basic
Distributed earnings to common shareholders	$	5,791	$	5,201	$	11,567	$	9,409
Undistributed earnings to common shareholders		10,396		7,469		18,456		5,013
Total common shareholders earnings, basic	$	16,187	$	12,670	$	30,023	$	14,422
Diluted
Distributed earnings to common shareholders	$	5,791	$	5,201	$	11,567	$	9,409
Undistributed earnings to common shareholders		10,396		7,469		18,456		5,013
Total common shareholders earnings		16,187		12,670		30,023		14,422
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		1		1		1		1
Total common shareholders earnings, diluted	$	16,188	$	12,671	$	30,024	$	14,423
Weighted average common shares outstanding, basic		24,081,777		23,815,436		24,040,032		22,365,927
Options		221,434		452,675		214,580		451,545
Weighted average common shares outstanding, diluted		24,303,211		24,268,111		24,254,612		22,817,472
Basic earnings per common share	$	0.67	$	0.53	$	1.25	$	0.64
Diluted earnings per common share		0.67		0.52		1.24		0.63

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2019

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Note 15 – Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

●

Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets.

●

Level 2: Significant other observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data.

●

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis as of June 30, 2019 and December 31, 2018, are summarized below:


	June 30, 2019
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
Government sponsored entity debt securities	$	74,875	$	—	$	74,875	$	—
Agency mortgage-backed securities		297,362		—		297,362		—
State and municipal securities		143,729		—		143,729		—
Corporate securities		93,691		—		92,756		935
Equity securities		3,369		—		3,369		—
Loans held for sale		22,143		—		22,143		—
Interest rate lock commitments		3,791		—		3,791		—
Interest rate swap contracts		286		—		286		—
Total	$	639,246	$	—	$	638,311	$	935
Liabilities
Interest rate swap contracts	$	286	$	—	$	286	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	54,191	$	—	$	—	$	54,191
Mortgage servicing rights held for sale		159		159		—		—
Impaired loans		13,170		—		10,842		2,328
Other real estate owned		47		—		47		—
Assets held for sale		1,297		—		1,297		—


	December 31, 2018
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. Treasury securities	$	24,650	$	24,650	$	—	$	—
Government sponsored entity debt securities		75,684		—		75,684		—
Agency mortgage-backed securities		326,305		—		326,305		—
State and municipal securities		159,262		—		159,262		—
Corporate securities		71,550		—		69,627		1,923
Equity securities		3,334		—		3,334		—
Loans held for sale		30,401		—		30,401		—
Interest rate lock commitments		4,492		—		4,492		—
Interest rate swap contracts		145		—		145		—
Total	$	695,823	$	24,650	$	669,250	$	1,923
Liabilities
Interest rate swap contracts	$	145	$	—	$	145	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	53,447	$	—	$	—	$	53,447
Mortgage servicing rights held for sale		3,545		3,545		—		—
Impaired loans		11,238		—		9,226		2,012
Other real estate owned		1,439		—		1,439		—
Assets held for sale		1,687		—		1,687		—

The following table presents gains (losses) recognized on assets measured on a non-recurring basis for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Mortgage servicing rights	$	559	$	(500)	$	534	$	(633)
Mortgage servicing rights held for sale		515		(188)		515		(188)
Impaired loans		(1,252)		(2,041)		(2,233)		(2,916)
Other real estate owned		—		(126)		(16)		(126)
Total loss on assets measured on a nonrecurring basis	$	(178)	$	(2,855)	$	(1,200)	$	(3,863)

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Balance, beginning of period	$	1,930	$	4,787	$	1,923	$	4,779
Total realized in earnings ⁽¹⁾		20		63		42		119
Total unrealized in other comprehensive income		5		562		12		562
Net settlements (principal and interest)		(1,020)		(55)		(1,042)		(103)
Balance, end of period	$	935	$	5,357	$	935	$	5,357

(1)	Amounts included in interest income from investment securities taxable in the consolidated statements of income.

The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at June 30, 2019:

Non-recurring

Fair Value

Valuation

Unobservable

fair value measurements

(dollars in thousands)

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

54,191

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.21%)

Discount rate

10.00% - 27.00% (11.03%)

Impaired loans

2,328

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.51%)

age of appraisal and current status

The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at December 31, 2018:

Non-recurring

Fair Value

Valuation

Unobservable

fair value measurements

(dollars in thousands)

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

53,447

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.24%)

Discount rate

10.00% - 27.00% (11.12%)

Impaired loans

2,012

Fair value of collateral

Discount for type of property,

5.00% - 7.26% (5.26%)

age of appraisal and current status

Mortgage Servicing Rights. In accordance with GAAP, the Company must record impairment charges on mortgage servicing rights on a non-recurring basis when the carrying value exceeds the estimated fair value. The fair value of our servicing rights is estimated by using a cash flow valuation model, which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are estimated based on current market conditions. The determination of fair value of servicing rights relies upon Level 3 inputs. The fair value of mortgage servicing rights was $54.2 million and $53.4 million at June 30, 2019 and December 31, 2018, respectively.

Impaired loans. Impaired loans are measured and recorded at fair value on a non-recurring basis. All of our nonaccrual loans and restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure impaired loans based on the estimated fair value of such collateral. The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment.

ASC Topic 825, Financial Instruments, requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements.

The Company has elected the fair value option for newly originated residential and commercial loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.

The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of June 30, 2019 and December 31, 2018:


	June 30, 2019						December 31, 2018
	Aggregate				Contractual		Aggregate				Contractual
(dollars in thousands)	fair value		Difference		principal		fair value		Difference		principal
Residential loans held for sale	$	7,198	$	364	$	6,834	$	8,121	$	484	$	7,637
Commercial loans held for sale		14,945		301		14,644		22,280		595		21,685
Total loans held for sale	$	22,143	$	665	$	21,478	$	30,401	$	1,079	$	29,322

The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Residential loans held for sale	$	38	$	168	$	(19)	$	60
Commercial loans held for sale		34		260		(294)		25
Total loans held for sale	$	72	$	428	$	(313)	$	85

The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of June 30, 2019 and December 31, 2018:


	June 30, 2019
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	244,239	$	244,239	$	244,239	$	—	$	—
Federal funds sold		1,176		1,176		1,176		—		—
Investment securities available for sale		609,657		609,657		—		608,722		935
Equity securities		3,369		3,369		—		3,369		—
Nonmarketable equity securities		43,175		43,175		—		43,175		—
Loans, net		4,047,602		4,056,912		—		4,056,912		—
Loans held for sale		22,143		22,143		—		22,143		—
Accrued interest receivable		15,509		15,509		—		15,509		—
Interest rate lock commitments		3,791		—		—		3,791		—
Interest rate swap contracts		286		—		—		286		—
Liabilities
Deposits	$	4,011,207	$	4,016,503	$	—	$	4,016,503	$	—
Short-term borrowings		113,844		113,844		—		113,844		—
FHLB and other borrowings		582,387		594,404		—		594,404		—
Subordinated debt		94,215		93,761		—		93,761		—
Trust preferred debentures		48,041		55,218		—		55,218		—
Accrued interest payable		5,455		5,455		—		5,455		—
Interest rate swap contracts		286		—		—		286		—


	December 31, 2018
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	210,780	$	210,780	$	210,780	$	—	$	—
Federal funds sold		2,920		2,920		2,920		—		—
Investment securities available for sale		660,785		660,785		24,650		634,212		1,923
Nonmarketable equity securities		42,472		42,472		—		42,472		—
Loans, net		4,116,648		4,091,438		—		—		4,091,438
Loans held for sale		30,401		30,401		—		30,401		—
Accrued interest receivable		16,560		16,560		—		16,560		—
Interest rate lock commitments		4,492		4,492		—		4,492		—
Interest rate swap contracts		145		145		—		145		—

Liabilities
Deposits	$	4,074,170	$	4,069,098	$	—	$	4,069,098	$	—
Short-term borrowings		124,235		124,235		—		124,235		—
FHLB and other borrowings		640,631		641,050		—		641,050		—
Subordinated debt		94,134		91,926		—		91,926		—
Trust preferred debentures		47,794		56,805		—		56,805		—
Accrued interest payable		4,855		4,855		—		4,855		—
Interest rate swap contracts		145		145		—		145		—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

6 Months Ended

Jun. 30, 2019

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Note 16 – Commitments, Contingencies and Credit Risk

In the normal course of business, there are outstanding various contingent liabilities such as claims and legal actions, which are not reflected in the consolidated financial statements. No material losses are anticipated as a result of these actions or claims.

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The commitments are principally tied to variable rates. Loan commitments as of June 30, 2019 and December 31, 2018 were as follows:


	June 30,		December 31,
(dollars in thousands)	2019		2018
Commitments to extend credit	$	761,832	$	663,555
Financial guarantees – standby letters of credit		127,135		142,859

The Company establishes a mortgage repurchase liability to reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on the volume of loans sold in 2019 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. As a result of make-whole requests and loan repurchases, the Company incurred losses totaling $9,000 and $20,000 for the three and six months ended June 30, 2018, respectively. There were no losses as a result of make-whole requests and loan repurchases for the three and six months ended June 30, 2019. The liability for unresolved repurchase demands totaled $289,000 and $492,000 at June 30, 2019 and December 31, 2018, respectively.

SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2019

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 17 – Segment Information

Our business segments are defined as Banking, Commercial FHA Origination and Servicing, Wealth Management, and Other. The reportable business segments are consistent with the internal reporting and evaluation of the principle lines of business of the Company. The banking segment provides a wide range of financial products and services to consumers and businesses, including commercial, commercial real estate, mortgage and other consumer loan products; commercial equipment leasing; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services; and corporate treasury management services. The commercial FHA origination and servicing segment provides for the origination and servicing of government sponsored mortgages for multifamily and healthcare facilities. The wealth management segment consists of trust and fiduciary services, brokerage and retirement planning services. The other segment includes the operating results of the parent company, our captive insurance business unit, and the elimination of intercompany transactions.

Selected business segment financial information as of and for the three and six months ended June 30, 2019 and 2018 were as follows:


			Commercial FHA
			Origination and		Wealth
(dollars in thousands)	Banking		Servicing		Management		Other		Total
Three Months Ended June 30, 2019
Net interest income (expense)	$	48,930	$	(138)	$	—	$	(2,715)	$	46,077
Provision for loan losses		4,076		—		—		—		4,076
Noninterest income		9,025		5,116		5,504		(58)		19,587
Noninterest expense		33,809		3,004		3,772		(391)		40,194
Income before income taxes		20,070		1,974		1,732		(2,382)		21,394
Income taxes (benefit)		5,132		551		197		(841)		5,039
Net income (loss)	$	14,938	$	1,423	$	1,535	$	(1,541)	$	16,355
Total assets	$	5,478,515	$	88,320	$	19,398	$	(40,178)	$	5,546,055

Six Months Ended June 30, 2019
Net interest income (expense)	$	97,448	$	(314)	$	—	$	(5,456)	$	91,678
Provision for loan losses		7,319		—		—		—		7,319
Noninterest income		17,965		8,354		10,457		(114)		36,662
Noninterest expense		69,180		5,815		7,019		(723)		81,291
Income (loss) before income taxes (benefit)		38,914		2,225		3,438		(4,847)		39,730
Income taxes (benefit)		10,107		622		337		(1,673)		9,393
Net income (loss)	$	28,807	$	1,603	$	3,101	$	(3,174)	$	30,337
Total assets	$	5,478,515	$	88,320	$	19,398	$	(40,178)	$	5,546,055


			Commercial FHA
			Origination and		Wealth
(dollars in thousands)	Banking		Servicing		Management		Other		Total
Three Months Ended June 30, 2018
Net interest income (expense)	$	51,050	$	(95)	$	—	$	(2,669)	$	48,286
Provision for loan losses		1,854		—		—		—		1,854
Noninterest income		5,681		447		5,316		4,403		15,847
Noninterest expense		38,216		4,718		3,257		261		46,452
Income (loss) before income taxes (benefit)		16,661		(4,366)		2,059		1,473		15,827
Income taxes (benefit)		5,201		(1,402)		151		(905)		3,045
Net income (loss)	$	11,460	$	(2,964)	$	1,908	$	2,378	$	12,782
Total assets	$	5,780,313	$	94,481	$	17,171	$	(161,365)	$	5,730,600

Six Months Ended June 30, 2018
Net interest income (expense)	$	91,766	$	(58)	$	—	$	(5,237)	$	86,471
Provision for loan losses		3,860		—		—		—		3,860
Noninterest income		14,698		3,968		9,395		4,288		32,349
Noninterest expense		82,582		8,256		5,643		(530)		95,951
Income (loss) before income taxes (benefit)		20,022		(4,346)		3,752		(419)		19,009
Income taxes (benefit)		6,580		(995)		292		(1,456)		4,421
Net income (loss)	$	13,442	$	(3,351)	$	3,460	$	1,037	$	14,588
Total assets	$	5,780,313	$	94,481	$	17,171	$	(161,365)	$	5,730,600

REVENUE FROM CONTRACT WITH CUSTOMERS

6 Months Ended

Jun. 30, 2019

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

Note 19 – Revenue From Contracts with Customers

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. As stated in “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies,” the implementation of the new standard did not have a material impact on the measurement or recognition of revenue. Since the impact of applying the standard was determined to be immaterial, the Company did not record a cumulative effect adjustment to beginning retained earnings on January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and investment securities. In addition, certain noninterest income streams such as commercial FHA revenue, residential mortgage banking revenue and gain on sales of investment securities, net are also not in scope of the new guidance. Topic 606 is applicable to noninterest income streams such as wealth management revenue, service charges on deposit accounts, interchange revenue, gain on sales of other real estate owned, and certain other noninterest income streams. The recognition of revenue associated with these noninterest income streams did not change significantly from current practice upon adoption of Topic 606. The noninterest income streams considered in-scope by Topic 606 are discussed below.

Wealth Management Revenue

Wealth management revenue is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company also earns investment advisory fees through its SEC registered investment advisory subsidiary. The Company’s performance obligation in both of these instances is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and contractually determined fee schedules. Payment is generally received a few days after month end through a direct charge to each customer’s account. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Fees generated from transactions executed by the Company’s third party broker dealer are remitted by them to the Company on a monthly basis for that month’s transactional activity.

Service Charges on Deposit Accounts

Service charges on deposit accounts consist of fees received under depository agreements with customers to provide access to deposited funds, serve as custodian of deposited funds, and when applicable, pay interest on deposits. These service charges primarily include non-sufficient fund fees and other account related service charges. Non-sufficient fund fees are earned when a depositor presents an item for payment in excess of available funds, and the Company, at its discretion, provides the necessary funds to complete the transaction. The Company generates other account related service charge revenue by providing depositors proper safeguard and remittance of funds as well as by delivering optional services for depositors, such as check imaging or treasury management, that are performed upon the depositor’s request. The Company’s performance obligation for the proper safeguard and remittance of funds, monthly account analysis and any other monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.

Interchange Revenue

Interchange revenue includes debit / credit card income and ATM user fees. Card income is primarily comprised of interchange fees earned for standing ready to authorize and providing settlement on card transactions processed through the MasterCard interchange network. The levels and structure of interchange rates are set by MasterCard and can vary based on cardholder purchase volumes. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with completion of the Company’s performance obligation, the transaction processing services provided to the cardholder. Payment is typically received immediately or in the following month. ATM fees are primarily generated when a Company cardholder withdraws funds from a non-Company ATM or a non-Company cardholder withdraws funds from a Company ATM. The Company satisfies its performance obligation for each transaction at the point in time when the ATM withdrawal is processed.

Gain on Sales of Other Real Estate Owned

The Company records a gain or loss from the sale of other real estate owned (“OREO”) when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant financing component is present.

Other Noninterest Income

The other noninterest income revenue streams within the scope of Topic 606 consist of merchant services revenue, safe deposit box rentals, wire transfer fees, paper statement fees, check printing commissions, and other noninterest related fees. Revenue from the Company’s merchant services business consists principally of transaction and account management fees charged to merchants for the electronic processing of transactions. These fees are net of interchange fees paid to the credit card issuing bank, card company assessments, and revenue sharing amounts. Account management fees are considered earned at the time the merchant’s transactions are processed or other services are performed. Fees related to the other components of other noninterest income within the scope of Topic 606 are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at the point in time the customer uses the selected service to execute a transaction.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2019 and 2018.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	4,082	$	4,322	$	7,699	$	7,441
Investment advisory fees		539		495		1,068		960
Investment brokerage fees		232		286		451		550
Other		651		213		1,239		444
Service charges on deposit accounts:
Nonsufficient fund fees		1,801		1,991		3,555		3,441
Other		838		702		1,604		1,219
Interchange revenues		3,010		2,929		5,690		4,974
Other income:
Merchant services revenue		389		460		764		798
Other		788		687		1,606		1,747
Noninterest income - out-of-scope of Topic 606		7,257		3,762		12,986		10,775
Total noninterest income	$	19,587	$	15,847	$	36,662	$	32,349

Contract Balances

A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of June 30, 2019 and December 31, 2018, the Company did not have any significant contract balances.

Contract Acquisition Costs

In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition costs.

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2019

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Note 20 – Subsequent Events

Acquisition of HomeStar Financial Group, Inc. – Completed on July 17, 2019

On July 17, 2019, the Company completed its acquisition of HomeStar Financial Group, Inc. (“HomeStar”), and its wholly owned subsidiary, HomeStar Bank and Financial Services, which operates 5 full-service banking centers in northern Illinois, for total consideration of $11.4 million, consisting of $1.0 million in cash and 405,000 shares of the Company’s common stock. The Company has not yet determined the estimated acquisition date fair values for identifiable assets acquired and liabilities assumed. As of June 30, 2019, HomeStar had approximately $370.4 million in assets, $219.5 million in loans and $321.8 million in deposits. The Company anticipates there will be goodwill and core deposit intangibles recorded with this acquisition.

Redemption of Fixed Rate Non-Voting Perpetual Non-Cumulative Preferred Stock, Series H

On July 29, 2019, the Company redeemed, in whole, the shares of Series H preferred stock. The per share price paid by the Company for such shares for Series H preferred stock was equal to $1,000 per share plus any unpaid dividends.

Stock Repurchase Program

On August 6, 2019, the Board of Directors also approved a stock repurchase program that authorizes the Company to repurchase up to $25.0 million of its common stock. Stock repurchases under the program may be made from time to time on the open market, in privately negotiated transactions, or in any other manner that complies with applicable securities laws, at the discretion of the Company. The program will be in effect until June 30, 2020, with the timing of purchases and the number of shares repurchased under the program dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements and market conditions. The repurchase program may be suspended or discontinued at any time without notice.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2019
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The consolidated financial statements of the Company are unaudited and should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019. The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. A discussion of these policies can be found in Note 1 – Summary of Significant Accounting Policies included in the Company's 2018 Annual Report on Form 10-K. There has been one change to our significant accounting policies since December 31, 2018, which is described below. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for the interim periods presented herein, have been included. Certain reclassifications of 2018 amounts have been made to conform to the 2019 presentation. Management has evaluated subsequent events for potential recognition or disclosure. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or any other period.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements.
Accounting Guidance Adopted in 2019 and Issued But Not Yet Adopted	Accounting Guidance Adopted in 2019 FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize leases on-balance sheet and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases;” and ASU No. 2018-11, “Targeted Improvements.” The new standard established a right-of-use (“ROU”) model, that requires a lessee to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. Under the new guidance, leases are classified as either finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of income. The Company adopted the new standard on January 1, 2019, and used the effective date as our date of initial application. A modified retrospective adoption approach is required, applying the new standard to all existing leases in effect at the adoption date and new leases going forward. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to January 1, 2019. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company elected the “package of practical expedients” permitted by ASU 2018-11, which allows us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for ongoing accounting. The Company elected the short-term lease recognition exemption for our office equipment leases. This means, for those leases that qualify, we did recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. At the adoption date, the Company reported increased assets and liabilities of approximately $12.1 million on its consolidated balance sheet as a result of recognizing ROU assets and lease liabilities related to non-cancelable operating lease agreements for office space. The adoption of this guidance did not have a material effect to its consolidated statement of income. Accounting Guidance Issued But Not Yet Adopted FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”).” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better understand their credit loss estimates. For public companies that are filers with the SEC, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. As previously disclosed, the Company has established a cross-functional governance structure, which oversees overall strategy for implementation of Topic 326. Additionally, a working group was formed and has developed a project plan focused on understanding the ASU, researching issues, data requirements, technology solutions and future state processes. The project plan is targeting the model validation completion by a third party during the third quarter of 2019, with parallel processing of our existing allowance for loan loss model with CECL prior to implementation during the third and fourth quarters of 2019. The working group has identified 12 distinct loan portfolios for which a model has been developed and internally validated. The Company continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. The Company also continues to believe that the adoption of the standard will result in an overall increase in the allowance for loan losses to cover credit losses over the estimated life of the financial assets. However, the magnitude of the increase in its allowance for loan losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time. FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – In August 2018, the FASB issued ASU No. 2018-13 to improve the disclosure requirements on fair value measurements. The amendment removes certain disclosures required by Topic 820 related to transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements. The update also adds certain disclosure requirements related to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements, but it is not expected to have a material impact.

INVESTMENT SECURITIES (Tables)

6 Months Ended

Jun. 30, 2019

INVESTMENT SECURITIES

Schedule of investment securities classified as available for sale


	June 30, 2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available for sale securities
Government sponsored entity debt securities	$	74,286	$	589	$	—	$	74,875
Agency mortgage-backed securities		294,432		3,126		196		297,362
State and municipal securities		138,181		5,559		11		143,729
Corporate securities		92,874		1,251		434		93,691
Total available for sale securities	$	599,773	$	10,525	$	641	$	609,657
Equity securities							$	3,369


	December 31, 2018
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	25,018	$	—	$	368	$	24,650
Government sponsored entity debt securities		76,554		17		887		75,684
Agency mortgage-backed securities		329,690		371		3,756		326,305
State and municipal securities		156,795		3,282		815		159,262
Corporate securities		72,302		383		1,135		71,550
Total available for sale securities	$	660,359	$	4,053	$	6,961	$	657,451
Equity securities							$	3,334

Schedule of unrealized losses and fair values for investment securities


	June 30, 2019
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available for sale securities
Government sponsored entity debt securities	$	—	$	—	$	—	$	—	$	—	$	—
Agency mortgage-backed securities		25,257		30		40,366		166		65,623		196
State and municipal securities		836		4		3,348		7		4,184		11
Corporate securities		18,053		287		6,390		147		24,443		434
Total available for sale securities	$	44,146	$	321	$	50,104	$	320	$	94,250	$	641


	December 31, 2018
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	5,012	$	1	$	19,638	$	367	$	24,650	$	368
Government sponsored entity debt securities		51,717		195		23,223		692		74,940		887
Agency mortgage-backed securities		139,115		528		126,561		3,228		265,676		3,756
State and municipal securities		15,791		146		27,692		669		43,483		815
Corporate securities		32,616		575		8,535		560		41,151		1,135
Total available for sale securities	$	244,251	$	1,445	$	205,649	$	5,516	$	449,900	$	6,961

Contractual maturity of amortized cost and fair value


	Amortized		Fair
(dollars in thousands)	cost		value
Available for sale securities
Within one year	$	47,428	$	47,545
After one year through five years		79,332		81,206
After five years through ten years		152,041		155,775
After ten years		26,540		27,769
Mortgage-backed securities		294,432		297,362
Total available for sale securities	$	599,773	$	609,657

LOANS (Tables)

6 Months Ended

Jun. 30, 2019

LOANS

Summary of loans


	June 30, 2019						December 31, 2018
	Non-PCI		PCI				Non-PCI		PCI
(dollars in thousands)	Loans		Loans ⁽¹⁾		Total		Loans		Loans ⁽¹⁾		Total
Commercial	$	848,587	$	2,974	$	851,561	$	806,027	$	4,857	$	810,884
Commercial real estate		1,508,683		15,686		1,524,369		1,619,903		19,252		1,639,155
Construction and land development		244,188		6,226		250,414		223,898		8,331		232,229
Total commercial loans		2,601,458		24,886		2,626,344		2,649,828		32,440		2,682,268
Residential real estate		544,061		8,345		552,406		569,289		8,759		578,048
Consumer		595,728		1,240		596,968		611,408		1,776		613,184
Lease financing		297,809		—		297,809		264,051		—		264,051
Total loans	$	4,039,056	$	34,471	$	4,073,527	$	4,094,576	$	42,975	$	4,137,551

(1)	The unpaid principal balance for PCI loans totaled $45.0 million and $56.9 million as of June 30, 2019 and December 31, 2018, respectively.

Summary of recorded investment (excluding PCI loans) by risk category

The following table presents the recorded investment of the commercial loan portfolio (excluding PCI loans) by risk category as of June 30, 2019 and December 31, 2018:


	June 30, 2019								December 31, 2018
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
(dollars in thousands)	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	796,947	$	1,403,625	$	238,050	$	2,438,622	$	748,296	$	1,536,127	$	218,798	$	2,503,221
Special mention		22,391		23,284		2,491		48,166		35,103		15,306		3,448		53,857
Substandard		21,086		53,152		884		75,122		14,139		46,976		—		61,115
Substandard – nonaccrual		8,163		28,622		1,312		38,097		8,489		21,494		1,171		31,154
Doubtful		—		—		—		—		—		—		—		—
Not graded		—		—		1,451		1,451		—		—		481		481
Total (excluding PCI)	$	848,587	$	1,508,683	$	244,188	$	2,601,458	$	806,027	$	1,619,903	$	223,898	$	2,649,828


	June 30, 2019								December 31, 2018
	Residential				Lease				Residential				Lease
(dollars in thousands)	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	535,528	$	595,339	$	296,776	$	1,427,643	$	562,019	$	610,839	$	263,094	$	1,435,952
Impaired		8,533		389		1,033		9,955		7,270		569		957		8,796
Total (excluding PCI)	$	544,061	$	595,728	$	297,809	$	1,437,598	$	569,289	$	611,408	$	264,051	$	1,444,748

Summary of impaired loans (excluding PCI loans)


	June 30, 2019						December 31, 2018
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
(dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	7,863	$	8,380	$	5,311	$	7,945	$	8,102	$	4,448
Commercial real estate		13,616		14,235		4,395		7,496		13,844		523
Construction and land development		109		155		12		171		171		54
Residential real estate		5,174		5,915		668		4,055		4,662		554
Consumer		379		427		34		428		444		45
Lease financing		494		494		262		766		766		361
Total impaired loans with a valuation allowance		27,635		29,606		10,682		20,861		27,989		5,985
Impaired loans with no related valuation allowance:
Commercial		915		3,991		—		983		4,392		—
Commercial real estate		16,967		23,739		—		16,372		16,921		—
Construction and land development		1,251		1,253		—		1,136		1,136		—
Residential real estate		3,359		3,639		—		3,215		3,516		—
Consumer		10		12		—		141		145		—
Lease financing		539		538		—		191		191		—
Total impaired loans with no related valuation allowance		23,041		33,172		—		22,038		26,301		—
Total impaired loans:
Commercial		8,778		12,371		5,311		8,928		12,494		4,448
Commercial real estate		30,583		37,974		4,395		23,868		30,765		523
Construction and land development		1,360		1,408		12		1,307		1,307		54
Residential real estate		8,533		9,554		668		7,270		8,178		554
Consumer		389		439		34		569		589		45
Lease financing		1,033		1,032		262		957		957		361
Total impaired loans (excluding PCI)	$	50,676	$	62,778	$	10,682	$	42,899	$	54,290	$	5,985

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the three months ended June 30, 2019 and 2018 are included in the table below:


	Three Months Ended June 30,
	2019				2018
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,007	$	7	$	1,229	$	7
Commercial real estate		9,435		23		2,589		21
Construction and land development		111		—		100		1
Residential real estate		5,236		8		4,167		10
Consumer		395		—		166		—
Lease financing		494		—		447		—
Total impaired loans with a valuation allowance		23,678		38		8,698		39
Impaired loans with no related valuation allowance:
Commercial		937		—		864		—
Commercial real estate		21,313		—		15,876		—
Construction and land development		1,252		1		711		—
Residential real estate		3,367		3		2,360		2
Consumer		10		1		20		—
Lease financing		538		—		321		—
Total impaired loans with no related valuation allowance		27,417		5		20,152		2
Total impaired loans:
Commercial		8,944		7		2,093		7
Commercial real estate		30,748		23		18,465		21
Construction and land development		1,363		1		811		1
Residential real estate		8,603		11		6,527		12
Consumer		405		1		186		—
Lease financing		1,032		—		768		—
Total impaired loans (excluding PCI)	$	51,095	$	43	$	28,850	$	41

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the six months ended June 30, 2019 and 2018 are included in the table below:


	Six Months Ended June 30,
	2019				2018
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,448	$	13	$	1,279	$	17
Commercial real estate		9,381		50		2,769		41
Construction and land development		119		—		101		2
Residential real estate		5,264		19		4,173		21
Consumer		413		—		175		—
Lease financing		494		—		447		—
Total impaired loans with a valuation allowance		24,119		82		8,944		81
Impaired loans with no related valuation allowance:
Commercial		955		—		888		—
Commercial real estate		21,512		—		16,138		—
Construction and land development		1,261		1		725		—
Residential real estate		3,379		5		2,381		2
Consumer		11		1		21		—
Lease financing		538		—		321		—
Total impaired loans with no related valuation allowance		27,656		7		20,474		2
Total impaired loans:
Commercial		9,403		13		2,167		17
Commercial real estate		30,893		50		18,907		41
Construction and land development		1,380		1		826		2
Residential real estate		8,643		24		6,554		23
Consumer		424		1		196		—
Lease financing		1,033		—		768		—
Total impaired loans (excluding PCI)	$	51,776	$	89	$	29,418	$	83

Summary of aging status of recorded investments in loans by portfolio (excluding PCI loans)

The aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of June 30, 2019 and December 31, 2018 were as follows:



	Accruing
	30-59		60-89		Past Due
	Days		Days		90 Days				Total				Total
(dollars in thousands)	Past Due		Past Due		or More		Nonaccrual		Past Due		Current		Loans
June 30, 2019
Commercial	$	3,828	$	2,777	$	—	$	8,163	$	14,768	$	833,819	$	848,587
Commercial real estate		1,489		1,501		—		28,622		31,612		1,477,071		1,508,683
Construction and land development		—		—		—		1,312		1,312		242,876		244,188
Residential real estate		544		643		—		7,831		9,018		535,043		544,061
Consumer		5,456		3,774		4		338		9,572		586,156		595,728
Lease financing		1,112		430		302		731		2,575		295,234		297,809
Total (excluding PCI)	$	12,429	$	9,125	$	306	$	46,997	$	68,857	$	3,970,199	$	4,039,056
December 31, 2018
Commercial	$	4,013	$	2,581	$	4	$	8,489	$	15,087	$	790,940	$	806,027
Commercial real estate		1,667		945		149		21,494		24,255		1,595,648		1,619,903
Construction and land development		989		—		85		1,171		2,245		221,653		223,898
Residential real estate		1,292		728		566		5,894		8,480		560,809		569,289
Consumer		5,211		2,533		51		388		8,183		603,225		611,408
Lease financing		4,322		932		206		751		6,211		257,840		264,051
Total (excluding PCI)	$	17,494	$	7,719	$	1,061	$	38,187	$	64,461	$	4,030,115	$	4,094,576

Summary of TDRs loans


	June 30, 2019						December 31, 2018
(dollars in thousands)	Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total		Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total
Commercial	$	615	$	386	$	1,001	$	435	$	406	$	841
Commercial real estate		1,961		10,695		12,656		2,225		9,103		11,328
Construction and land development		48		174		222		51		—		51
Residential real estate		702		1,467		2,169		810		853		1,663
Consumer		47		—		47		130		—		130
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	3,373	$	12,722	$	16,095	$	3,651	$	10,362	$	14,013

(1)	These loans are still accruing interest.

(2)	These loans are included in non-accrual loans in the preceding tables.


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended June 30, 2019
Troubled debt restructurings:
Number of loans		1		—		—		2		—		—		3
Pre-modification outstanding balance	$	249	$	—	$	—	$	106	$	—	$	—	$	355
Post-modification outstanding balance		249		—		—		109		—		—		358

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the six months ended June 30, 2019
Troubled debt restructurings:
Number of loans		1		3		1		9		2		—		16
Pre-modification outstanding balance	$	—	$	1,924	$	62	$	330	$	15	$	—	$	2,331
Post-modification outstanding balance		249		1,838		16		324		16		—		2,443

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		1		—		—		—		1
Recorded balance	$	—	$	—	$	43	$	—	$	—	$	—	$	43


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended June 30, 2018:
Troubled debt restructurings:
Number of loans		1		—		—		3		4		—		8
Pre-modification outstanding balance	$	23	$	—	$	—	$	212	$	19	$	—	$	254
Post-modification outstanding balance		22		—		—		207		19		—		248

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the six months ended June 30, 2018:
Troubled debt restructurings:
Number of loans		1		—		—		3		4		—		8
Pre-modification outstanding balance	$	23	$	—	$	—	$	212	$	19	$	—	$	254
Post-modification outstanding balance		22		—		—		207		19		—		248

Troubled debt restructurings that subsequently defaulted
Number of loans		—		—		—		—		—		—		—
Recorded balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Summary of changes in accretable yield for PCI loans


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Balance, at beginning of period	$	11,063	$	7,630	$	12,240	$	5,732
New loans purchased – Alpine acquisition		—		—		—		1,245
Accretion		(1,937)		(1,190)		(3,013)		(2,351)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		194		(181)		88		479
Reclassification from non-accretable		1,079		5		1,084		1,159
Balance, at end of period	$	10,399	$	6,264	$	10,399	$	6,264

Summary of changes in allowance for loan losses, by loan portfolio

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and six months ended June 30, 2019 and 2018:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses for the three months ended June 30, 2019:
Balance, beginning of period	$	9,545	$	6,617	$	398	$	2,424	$	2,137	$	1,970	$	23,091
Provision for loan losses		558		2,262		(85)		174		326		841		4,076
Charge-offs		(2)		(269)		—		(223)		(465)		(691)		(1,650)
Recoveries		14		29		3		49		221		92		408
Balance, end of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925

Changes in allowance for loan losses for the six months ended June 30, 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for loan losses		676		4,207		(22)		688		655		1,115		7,319
Charge-offs		(114)		(327)		(44)		(376)		(1,021)		(1,150)		(3,032)
Recoveries		29		36		10		71		431		158		735
Balance, end of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925


Changes in allowance for loan losses for the three months ended June 30, 2018:
Balance, beginning of period	$	5,902	$	5,485	$	328	$	2,504	$	1,309	$	2,176	$	17,704
Provision for loan losses		1,224		(310)		157		279		522		(18)		1,854
Charge-offs		(1,120)		(99)		—		(103)		(349)		(473)		(2,144)
Recoveries		197		301		20		62		147		105		832
Balance, end of period	$	6,203	$	5,377	$	505	$	2,742	$	1,629	$	1,790	$	18,246

Changes in allowance for loan losses for the six months ended June 30, 2018:
Balance, beginning of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Provision for loan losses		1,791		197		(58)		18		826		1,086		3,860
Charge-offs		(1,145)		(259)		—		(139)		(783)		(959)		(3,285)
Recoveries		301		395		45		113		242		144		1,240
Balance, end of period	$	6,203	$	5,377	$	505	$	2,742	$	1,629	$	1,790	$	18,246


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
June 30, 2019:

Allowance for loan losses:
Loans individually evaluated for impairment	$	5,242	$	4,361	$	—	$	294	$	—	$	235	$	10,132
Loans collectively evaluated for impairment		69		34		12		374		34		27		550
Non-impaired loans collectively evaluated for impairment		4,788		3,481		304		1,349		1,992		1,950		13,864
Loans acquired with deteriorated credit quality ⁽¹⁾		16		763		—		407		193		—		1,379
Total allowance for loan losses	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	8,175	$	30,286	$	1,251	$	4,926	$	—	$	792	$	45,430
Impaired loans collectively evaluated for impairment		603		297		109		3,607		389		241		5,246
Non-impaired loans collectively evaluated for impairment		839,809		1,478,100		242,828		535,528		595,339		296,776		3,988,380
Loans acquired with deteriorated credit quality ⁽¹⁾		2,974		15,686		6,226		8,345		1,240		—		34,471
Total recorded investment (loan balance)	$	851,561	$	1,524,369	$	250,414	$	552,406	$	596,968	$	297,809	$	4,073,527

December 31, 2018:

Allowance for loan losses:
Loans individually evaluated for impairment	$	4,405	$	476	$	48	$	233	$	—	$	330	$	5,492
Loans collectively evaluated for impairment		43		47		6		321		45		31		493
Non-impaired loans collectively evaluated for impairment		4,971		3,356		318		1,051		1,926		1,728		13,350
Loans acquired with deteriorated credit quality ⁽¹⁾		105		844		—		436		183		—		1,568
Total allowance for loan losses	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	8,520	$	23,431	$	1,249	$	3,929	$	5	$	668	$	37,802
Impaired loans collectively evaluated for impairment		408		437		58		3,341		564		289		5,097
Non-impaired loans collectively evaluated for impairment		797,099		1,596,035		222,591		562,019		610,839		263,094		4,051,677
Loans acquired with deteriorated credit quality ⁽¹⁾		4,857		19,252		8,331		8,759		1,776		—		42,975
Total recorded investment (loan balance)	$	810,884	$	1,639,155	$	232,229	$	578,048	$	613,184	$	264,051	$	4,137,551

(1)	Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows.

PREMISES AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2019

PREMISES AND EQUIPMENT, NET

Summary of premises and equipment


	June 30,		December 31,
(dollars in thousands)	2019		2018
Land	$	20,231	$	20,231
Buildings and improvements		78,782		76,141
Furniture and equipment		30,194		29,858
Total		129,207		126,230
Accumulated depreciation		(34,383)		(31,390)
Premises and equipment, net	$	94,824	$	94,840

LEASES (Tables)

6 Months Ended

Jun. 30, 2019

LEASES

Summary of information related to operating leases


	Three Months Ended			Six Months Ended
(dollars in thousands)	June 30, 2019			June 30, 2019
Operating lease cost	$	706		$	1,415
Operating cash flows from leases		742			1,483
Right-of-use assets obtained in exchange for lease obligations		181			12,281
Weighted average remaining lease term		5.9 years			5.9 years
Weighted average discount rate		3.12	%		3.12	%

Summary of projected minimum rental payments


(dollars in thousands)	Amount
Year ending December 31:
2019 remaining	$	1,143
2020		2,382
2021		2,229
2022		2,119
2023		1,594
Thereafter		2,322
Total future minimum lease payments		11,789
Less imputed interest		(1,070)
Total operating lease liabilities	$	10,719

MORTGAGE SERVICING RIGHTS (Tables)

6 Months Ended

Jun. 30, 2019

MORTGAGE SERVICING RIGHTS

Schedule of other mortgage notes serviced and changes in our mortgage servicing rights

Changes in our commercial FHA mortgage servicing rights were as follows for the three and six months ended June 30, 2019 and 2018:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Mortgage servicing rights:
Balance, beginning of period	$	55,787	$	56,039	$	56,252	$	55,714
Originated servicing		1,350		911		1,563		1,912
Amortization		(675)		(682)		(1,353)		(1,358)
Balance, end of period		56,462		56,268		56,462		56,268
Valuation allowances:
Balance, beginning of period		2,830		3,387		2,805		3,254
Additions		—		500		25		633
Reductions		(559)		—		(559)		—
Balance, end of period		2,271		3,887		2,271		3,887
Mortgage servicing rights, net	$	54,191	$	52,381	$	54,191	$	52,381
Fair value:
At beginning of period	$	52,957	$	52,652	$	53,447	$	52,460
At end of period	$	54,191	$	52,381	$	54,191	$	52,381

Schedule of summary of key assumptions


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
(dollars in thousands)	Fee		Rate		Maturity	Rate		Cost		Rate
June 30, 2019:
Commercial FHA mortgage loans	0.12	%	3.68	%	29.9	8.21	%	$	1,000	10 - 14	%

December 31, 2018:
Commercial FHA mortgage loans	0.13	%	3.67	%	30.1	8.24	%	$	1,000	10 - 14	%

GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2019

GOODWILL AND INTANGIBLE ASSETS

Schedule of intangible assets


(dollars in thousands)	Goodwill
Banking	$	149,035
Commercial FHA origination and servicing		10,892
Wealth management		4,746
Total goodwill	$	164,673

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of June 30, 2019 and December 31, 2018 are summarized as follows:


	June 30, 2019						December 31, 2018
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
(dollars in thousands)	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	52,712	$	(27,691)	$	25,021	$	52,712	$	(24,803)	$	27,909
Customer relationship intangibles		13,771		(4,899)		8,872		13,771		(4,304)		9,467
Total intangible assets	$	66,483	$	(32,590)	$	33,893	$	66,483	$	(29,107)	$	37,376

DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2019

DERIVATIVE INSTRUMENTS

Schedule of derivative instruments, fair value and notional amounts


	Notional Amount				Fair Value Gain
	June 30,		December 31,		June 30,		December 31,
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	183,562	$	264,710	$	3,791	$	4,492
Forward commitments to sell mortgage-backed securities		183,280		276,871		—		—
Total	$	366,842	$	541,581	$	3,791	$	4,492

Notional Amount

Fair Value Loss

June 30,

December 31,

June 30,

December 31,

(dollars in thousands)

2019

2018

2019

2018

Derivative Instruments (included in Other Liabilities):

Forward commitments to sell mortgage-backed securities

—

DEPOSITS (Tables)

6 Months Ended

Jun. 30, 2019

DEPOSITS

Schedule summarizes the classification of deposits


	June 30,		December 31,
(dollars in thousands)	2019		2018
Noninterest-bearing demand	$	902,286	$	972,164
Interest-bearing:
Checking		1,009,023		1,002,275
Money market		732,573		862,171
Savings		442,017		442,132
Time		925,308		795,428
Total deposits	$	4,011,207	$	4,074,170

SHORT-TERM BORROWINGS (Tables)

6 Months Ended

Jun. 30, 2019

SHORT-TERM BORROWINGS

Schedule of short term borrowings


	Repurchase Agreements
	June 30,			December 31,
(dollars in thousands)	2019			2018
Outstanding at period-end	$	113,844		$	124,235
Average amount outstanding		128,058			138,135
Maximum amount outstanding at any month end		138,907			173,387
Weighted average interest rate:
During period		0.70	%		0.51	%
End of period		0.68	%		0.71	%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

6 Months Ended

Jun. 30, 2019

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) advances


	June 30,		December 31,
(dollars in thousands)	2019		2018
Midland States Bancorp, Inc.
Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 4.75% and 4.63% at June 30, 2019 and December 31, 2018, respectively, – maturing May 25, 2020	$	29,989	$	32,840
Series G redeemable preferred stock - 181 shares at $1,000 per share		181		181
Midland States Bank
FHLB advances – fixed rate, fixed term of $22.3 million and $87.7 million, at rates averaging 2.37% and 2.35% at June 30, 2019 and December 31, 2018, respectively – maturing through February 2023 and putable fixed rate of $530.0 million and $520.0 million at rates averaging 2.24% and 2.09% at June 30, 2019 and December 31, 2018, respectively – maturing through August 2025 with call provisions through August 2021		552,217		607,610
Total FHLB advances and other borrowings	$	582,387	$	640,631

EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2019

EARNINGS PER SHARE

Schedule of basic and diluted earnings per common share


	Three Months Ended				Six Months Ended
		June 30,			June 30,
(dollars in thousands, except per share data)	2019		2018		2019		2018
Net income	$	16,355	$	12,782	$	30,337	$	14,588
Preferred dividends declared		(83)		(83)		(165)		(166)
Preferred stock, premium amortization		49		47		97		94
Net income available to common shareholders		16,321		12,746		30,269		14,516
Common shareholder dividends		(5,791)		(5,201)		(11,567)		(9,409)
Unvested restricted stock award dividends		(49)		(32)		(96)		(63)
Undistributed earnings to unvested restricted stock awards		(85)		(44)		(150)		(31)
Undistributed earnings to common shareholders	$	10,396	$	7,469	$	18,456	$	5,013
Basic
Distributed earnings to common shareholders	$	5,791	$	5,201	$	11,567	$	9,409
Undistributed earnings to common shareholders		10,396		7,469		18,456		5,013
Total common shareholders earnings, basic	$	16,187	$	12,670	$	30,023	$	14,422
Diluted
Distributed earnings to common shareholders	$	5,791	$	5,201	$	11,567	$	9,409
Undistributed earnings to common shareholders		10,396		7,469		18,456		5,013
Total common shareholders earnings		16,187		12,670		30,023		14,422
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		1		1		1		1
Total common shareholders earnings, diluted	$	16,188	$	12,671	$	30,024	$	14,423
Weighted average common shares outstanding, basic		24,081,777		23,815,436		24,040,032		22,365,927
Options		221,434		452,675		214,580		451,545
Weighted average common shares outstanding, diluted		24,303,211		24,268,111		24,254,612		22,817,472
Basic earnings per common share	$	0.67	$	0.53	$	1.25	$	0.64
Diluted earnings per common share		0.67		0.52		1.24		0.63

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2019

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured and recorded at fair value


	June 30, 2019
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
Government sponsored entity debt securities	$	74,875	$	—	$	74,875	$	—
Agency mortgage-backed securities		297,362		—		297,362		—
State and municipal securities		143,729		—		143,729		—
Corporate securities		93,691		—		92,756		935
Equity securities		3,369		—		3,369		—
Loans held for sale		22,143		—		22,143		—
Interest rate lock commitments		3,791		—		3,791		—
Interest rate swap contracts		286		—		286		—
Total	$	639,246	$	—	$	638,311	$	935
Liabilities
Interest rate swap contracts	$	286	$	—	$	286	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	54,191	$	—	$	—	$	54,191
Mortgage servicing rights held for sale		159		159		—		—
Impaired loans		13,170		—		10,842		2,328
Other real estate owned		47		—		47		—
Assets held for sale		1,297		—		1,297		—


	December 31, 2018
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. Treasury securities	$	24,650	$	24,650	$	—	$	—
Government sponsored entity debt securities		75,684		—		75,684		—
Agency mortgage-backed securities		326,305		—		326,305		—
State and municipal securities		159,262		—		159,262		—
Corporate securities		71,550		—		69,627		1,923
Equity securities		3,334		—		3,334		—
Loans held for sale		30,401		—		30,401		—
Interest rate lock commitments		4,492		—		4,492		—
Interest rate swap contracts		145		—		145		—
Total	$	695,823	$	24,650	$	669,250	$	1,923
Liabilities
Interest rate swap contracts	$	145	$	—	$	145	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	53,447	$	—	$	—	$	53,447
Mortgage servicing rights held for sale		3,545		3,545		—		—
Impaired loans		11,238		—		9,226		2,012
Other real estate owned		1,439		—		1,439		—
Assets held for sale		1,687		—		1,687		—

Schedule of losses recognized on assets measured on a non-recurring basis


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Mortgage servicing rights	$	559	$	(500)	$	534	$	(633)
Mortgage servicing rights held for sale		515		(188)		515		(188)
Impaired loans		(1,252)		(2,041)		(2,233)		(2,916)
Other real estate owned		—		(126)		(16)		(126)
Total loss on assets measured on a nonrecurring basis	$	(178)	$	(2,855)	$	(1,200)	$	(3,863)

Schedule presenting activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Balance, beginning of period	$	1,930	$	4,787	$	1,923	$	4,779
Total realized in earnings ⁽¹⁾		20		63		42		119
Total unrealized in other comprehensive income		5		562		12		562
Net settlements (principal and interest)		(1,020)		(55)		(1,042)		(103)
Balance, end of period	$	935	$	5,357	$	935	$	5,357

(1)	Amounts included in interest income from investment securities taxable in the consolidated statements of income.

Schedule presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3)

The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at June 30, 2019:

Non-recurring

Fair Value

Valuation

Unobservable

fair value measurements

(dollars in thousands)

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

54,191

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.21%)

Discount rate

10.00% - 27.00% (11.03%)

Impaired loans

2,328

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.51%)

age of appraisal and current status

The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at December 31, 2018:

Non-recurring

Fair Value

Valuation

Unobservable

fair value measurements

(dollars in thousands)

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

53,447

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.24%)

Discount rate

10.00% - 27.00% (11.12%)

Impaired loans

2,012

Fair value of collateral

Discount for type of property,

5.00% - 7.26% (5.26%)

age of appraisal and current status

Schedule of the fair value option for newly originated residential and commercial loans held for sale


	June 30, 2019						December 31, 2018
	Aggregate				Contractual		Aggregate				Contractual
(dollars in thousands)	fair value		Difference		principal		fair value		Difference		principal
Residential loans held for sale	$	7,198	$	364	$	6,834	$	8,121	$	484	$	7,637
Commercial loans held for sale		14,945		301		14,644		22,280		595		21,685
Total loans held for sale	$	22,143	$	665	$	21,478	$	30,401	$	1,079	$	29,322


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Residential loans held for sale	$	38	$	168	$	(19)	$	60
Commercial loans held for sale		34		260		(294)		25
Total loans held for sale	$	72	$	428	$	(313)	$	85

Schedule presentation of summary of the carrying values and fair value estimates of certain financial instruments


	June 30, 2019
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	244,239	$	244,239	$	244,239	$	—	$	—
Federal funds sold		1,176		1,176		1,176		—		—
Investment securities available for sale		609,657		609,657		—		608,722		935
Equity securities		3,369		3,369		—		3,369		—
Nonmarketable equity securities		43,175		43,175		—		43,175		—
Loans, net		4,047,602		4,056,912		—		4,056,912		—
Loans held for sale		22,143		22,143		—		22,143		—
Accrued interest receivable		15,509		15,509		—		15,509		—
Interest rate lock commitments		3,791		—		—		3,791		—
Interest rate swap contracts		286		—		—		286		—
Liabilities
Deposits	$	4,011,207	$	4,016,503	$	—	$	4,016,503	$	—
Short-term borrowings		113,844		113,844		—		113,844		—
FHLB and other borrowings		582,387		594,404		—		594,404		—
Subordinated debt		94,215		93,761		—		93,761		—
Trust preferred debentures		48,041		55,218		—		55,218		—
Accrued interest payable		5,455		5,455		—		5,455		—
Interest rate swap contracts		286		—		—		286		—


	December 31, 2018
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	210,780	$	210,780	$	210,780	$	—	$	—
Federal funds sold		2,920		2,920		2,920		—		—
Investment securities available for sale		660,785		660,785		24,650		634,212		1,923
Nonmarketable equity securities		42,472		42,472		—		42,472		—
Loans, net		4,116,648		4,091,438		—		—		4,091,438
Loans held for sale		30,401		30,401		—		30,401		—
Accrued interest receivable		16,560		16,560		—		16,560		—
Interest rate lock commitments		4,492		4,492		—		4,492		—
Interest rate swap contracts		145		145		—		145		—

Liabilities
Deposits	$	4,074,170	$	4,069,098	$	—	$	4,069,098	$	—
Short-term borrowings		124,235		124,235		—		124,235		—
FHLB and other borrowings		640,631		641,050		—		641,050		—
Subordinated debt		94,134		91,926		—		91,926		—
Trust preferred debentures		47,794		56,805		—		56,805		—
Accrued interest payable		4,855		4,855		—		4,855		—
Interest rate swap contracts		145		145		—		145		—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2019

SEGMENT INFORMATION

Schedule of segment financial information

Selected business segment financial information as of and for the three and six months ended June 30, 2019 and 2018 were as follows:


			Commercial FHA
			Origination and		Wealth
(dollars in thousands)	Banking		Servicing		Management		Other		Total
Three Months Ended June 30, 2019
Net interest income (expense)	$	48,930	$	(138)	$	—	$	(2,715)	$	46,077
Provision for loan losses		4,076		—		—		—		4,076
Noninterest income		9,025		5,116		5,504		(58)		19,587
Noninterest expense		33,809		3,004		3,772		(391)		40,194
Income before income taxes		20,070		1,974		1,732		(2,382)		21,394
Income taxes (benefit)		5,132		551		197		(841)		5,039
Net income (loss)	$	14,938	$	1,423	$	1,535	$	(1,541)	$	16,355
Total assets	$	5,478,515	$	88,320	$	19,398	$	(40,178)	$	5,546,055

Six Months Ended June 30, 2019
Net interest income (expense)	$	97,448	$	(314)	$	—	$	(5,456)	$	91,678
Provision for loan losses		7,319		—		—		—		7,319
Noninterest income		17,965		8,354		10,457		(114)		36,662
Noninterest expense		69,180		5,815		7,019		(723)		81,291
Income (loss) before income taxes (benefit)		38,914		2,225		3,438		(4,847)		39,730
Income taxes (benefit)		10,107		622		337		(1,673)		9,393
Net income (loss)	$	28,807	$	1,603	$	3,101	$	(3,174)	$	30,337
Total assets	$	5,478,515	$	88,320	$	19,398	$	(40,178)	$	5,546,055


			Commercial FHA
			Origination and		Wealth
(dollars in thousands)	Banking		Servicing		Management		Other		Total
Three Months Ended June 30, 2018
Net interest income (expense)	$	51,050	$	(95)	$	—	$	(2,669)	$	48,286
Provision for loan losses		1,854		—		—		—		1,854
Noninterest income		5,681		447		5,316		4,403		15,847
Noninterest expense		38,216		4,718		3,257		261		46,452
Income (loss) before income taxes (benefit)		16,661		(4,366)		2,059		1,473		15,827
Income taxes (benefit)		5,201		(1,402)		151		(905)		3,045
Net income (loss)	$	11,460	$	(2,964)	$	1,908	$	2,378	$	12,782
Total assets	$	5,780,313	$	94,481	$	17,171	$	(161,365)	$	5,730,600

Six Months Ended June 30, 2018
Net interest income (expense)	$	91,766	$	(58)	$	—	$	(5,237)	$	86,471
Provision for loan losses		3,860		—		—		—		3,860
Noninterest income		14,698		3,968		9,395		4,288		32,349
Noninterest expense		82,582		8,256		5,643		(530)		95,951
Income (loss) before income taxes (benefit)		20,022		(4,346)		3,752		(419)		19,009
Income taxes (benefit)		6,580		(995)		292		(1,456)		4,421
Net income (loss)	$	13,442	$	(3,351)	$	3,460	$	1,037	$	14,588
Total assets	$	5,780,313	$	94,481	$	17,171	$	(161,365)	$	5,730,600

REVENUE FROM CONTRACT WITH CUSTOMERS (Tables)

6 Months Ended

Jun. 30, 2019

REVENUE FROM CONTRACTS WITH CUSTOMERS

Summary of noninterest income, segregated by revenue


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in thousands)	2019		2018		2019		2018
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	4,082	$	4,322	$	7,699	$	7,441
Investment advisory fees		539		495		1,068		960
Investment brokerage fees		232		286		451		550
Other		651		213		1,239		444
Service charges on deposit accounts:
Nonsufficient fund fees		1,801		1,991		3,555		3,441
Other		838		702		1,604		1,219
Interchange revenues		3,010		2,929		5,690		4,974
Other income:
Merchant services revenue		389		460		764		798
Other		788		687		1,606		1,747
Noninterest income - out-of-scope of Topic 606		7,257		3,762		12,986		10,775
Total noninterest income	$	19,587	$	15,847	$	36,662	$	32,349

ACQUISITIONS - Alpine (Details) $ in Thousands	Feb. 28, 2018 USD ($) state shares	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Liabilities assumed:
Goodwill		$ 164,673	$ 164,673
Alpine Bank
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Number of service banking centers acquired \| state	19
Total consideration	$ 173,200
Cash transferred	$ 33,300
Shares issued \| shares	4,463,200
Transaction and integration costs	$ 22,400

INVESTMENT SECURITIES - Classified (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Available for sale securities
Amortized cost	$ 599,773
Gross unrealized gains	10,525
Gross unrealized losses	641
Investment securities available for sale	609,657
Equity securities	3,369	$ 3,334
U.S. Treasury securities
Available for sale securities
Amortized cost		25,018
Gross unrealized losses		368
Investment securities available for sale		24,650
Government sponsored entity debt securities
Available for sale securities
Amortized cost	74,286	76,554
Gross unrealized gains	589	17
Gross unrealized losses		887
Investment securities available for sale	74,875	75,684
Agency mortgage-backed securities
Available for sale securities
Amortized cost	294,432	329,690
Gross unrealized gains	3,126	371
Gross unrealized losses	196	3,756
Investment securities available for sale	297,362	326,305
State and municipal securities
Available for sale securities
Amortized cost	138,181	156,795
Gross unrealized gains	5,559	3,282
Gross unrealized losses	11	815
Investment securities available for sale	143,729	159,262
Corporate Securities
Available for sale securities
Amortized cost	92,874	72,302
Gross unrealized gains	1,251	383
Gross unrealized losses	434	1,135
Investment securities available for sale	$ 93,691	71,550
Equity Security
Available for sale securities
Amortized cost		660,359
Gross unrealized gains		4,053
Gross unrealized losses		6,961
Investment securities available for sale		$ 657,451

INVESTMENT SECURITIES - Continuous unrealized loss position (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Securities available for sale:
Less than 12 Months, Fair value	$ 44,146,000	$ 244,251,000
Less than 12 Months, Unrealized loss	321,000	1,445,000
12 Months or more, Fair value	50,104,000	205,649,000
12 Months or more, Unrealized loss	320,000	5,516,000
Total, Fair value	94,250,000	449,900,000
Total, Unrealized loss	$ 641,000	6,961,000
Unrealized loss
Debt Securities Available For Sale Unrealized Loss Position Number Of Positions	51
Aggregate depreciation	0.68%
U.S. Treasury securities
Securities available for sale:
Less than 12 Months, Fair value		5,012,000
Less than 12 Months, Unrealized loss		1,000
12 Months or more, Fair value		19,638,000
12 Months or more, Unrealized loss		367,000
Total, Fair value		24,650,000
Total, Unrealized loss		368,000
Government sponsored entity debt securities
Securities available for sale:
Less than 12 Months, Fair value		51,717,000
Less than 12 Months, Unrealized loss		195,000
12 Months or more, Fair value		23,223,000
12 Months or more, Unrealized loss		692,000
Total, Fair value		74,940,000
Total, Unrealized loss		887,000
Agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	$ 25,257,000	139,115,000
Less than 12 Months, Unrealized loss	30,000	528,000
12 Months or more, Fair value	40,366,000	126,561,000
12 Months or more, Unrealized loss	166,000	3,228,000
Total, Fair value	65,623,000	265,676,000
Total, Unrealized loss	196,000	3,756,000
State and municipal securities
Securities available for sale:
Less than 12 Months, Fair value	836,000	15,791,000
Less than 12 Months, Unrealized loss	4,000	146,000
12 Months or more, Fair value	3,348,000	27,692,000
12 Months or more, Unrealized loss	7,000	669,000
Total, Fair value	4,184,000	43,483,000
Total, Unrealized loss	11,000	815,000
Corporate Securities
Securities available for sale:
Less than 12 Months, Fair value	18,053,000	32,616,000
Less than 12 Months, Unrealized loss	287,000	575,000
12 Months or more, Fair value	6,390,000	8,535,000
12 Months or more, Unrealized loss	147,000	560,000
Total, Fair value	24,443,000	41,151,000
Total, Unrealized loss	$ 434,000	$ 1,135,000

INVESTMENT SECURITIES - Amortized cost and fair value (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Amortized cost of available-for-sale securities, by contractual maturity
Within one year	$ 47,428,000		$ 47,428,000
After one year through five years	79,332,000		79,332,000
After five years through ten years	152,041,000		152,041,000
After ten years	26,540,000		26,540,000
Total, single maturity date	599,773,000		599,773,000
Fair Value of available-for-sale securities, by contractual maturity
Within one year	47,545,000		47,545,000
After one year through five years	81,206,000		81,206,000
After five years through ten years	155,775,000		155,775,000
After ten years	27,769,000		27,769,000
Total, single maturity date	609,657,000		609,657,000
Proceeds from Sale of Available-for-sale Securities
Proceed from sale of investments	28,500,000	$ 15,300,000	28,465,000	$ 16,869,000
Gross realized gains/losses
Gross realized gains	126,000	8,000	126,000	73,000
Gross realized losses	190,000	25,000	190,000	25,000
Sales of equity securities	105,000	7,700,000	105,000	7,733,000
Equity securities, unrealized gains	37,000	93,000	37,000	93,000
Equity securities, unrealized losses	30,000	18,000	30,000	18,000
Equity securities, realized losses	0	53,000	0	53,000
Equity securities, realized gains	78,000	0	78,000	0
Unrealized losses recognized	30,000	$ 18,000	30,000	$ 18,000
Mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Total, single maturity date	294,432,000		294,432,000
Fair Value of available-for-sale securities, by contractual maturity
Total, single maturity date	$ 297,362,000		$ 297,362,000

LOANS - Summary of loans (Details) - USD ($)	3 Months Ended		6 Months Ended
LOANS - Summary of loans (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Summary of loans
Loans	$ 4,073,527,000		$ 4,073,527,000		$ 4,137,551,000
Loans, additional information
Net deferred loan fees	3,000,000.0		3,000,000.0		11,600,000
Unearned income	34,200,000		34,200,000		29,200,000
Loans held for sale	22,143,000		22,143,000		30,401,000
Proceeds from sales of loans held for sale			248,704,000	$ 269,899,000
Directors, executive officers, principal shareholders and affiliates
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Loans outstanding to related parties	24,500,000		24,500,000		26,500,000
New loans to related parties and other additions	1,600,000		3,100,000
Repayments from related parties and other reductions	643,000		5,100,000
Commercial real estate
Summary of loans
Loans	2,626,344,000		2,626,344,000		2,682,268,000
Commercial real estate \| Commercial
Summary of loans
Loans	851,561,000		851,561,000		810,884,000
Commercial real estate \| Commercial real estate
Summary of loans
Loans	1,524,369,000		1,524,369,000		1,639,155,000
Commercial real estate \| Construction and land development
Summary of loans
Loans	250,414,000		250,414,000		232,229,000
Other loan portfolio \| Residential real estate
Summary of loans
Loans	552,406,000		552,406,000		578,048,000
Other loan portfolio \| Consumer
Summary of loans
Loans	596,968,000		596,968,000		613,184,000
Other loan portfolio \| Lease financing
Summary of loans
Loans	297,809,000		297,809,000		264,051,000
Commercial and Residential Loan
Loans, additional information
Loans held for sale	22,100,000		22,100,000		30,400,000
Proceeds from sales of loans held for sale	149,400,000	$ 115,900,000	248,700,000	$ 269,900,000
Non-PCI loans
Summary of loans
Loans	4,039,056,000		4,039,056,000		4,094,576,000
Non-PCI loans \| Commercial real estate
Summary of loans
Loans	2,601,458,000		2,601,458,000		2,649,828,000
Non-PCI loans \| Commercial real estate \| Commercial
Summary of loans
Loans	848,587,000		848,587,000		806,027,000
Non-PCI loans \| Commercial real estate \| Commercial real estate
Summary of loans
Loans	1,508,683,000		1,508,683,000		1,619,903,000
Non-PCI loans \| Commercial real estate \| Construction and land development
Summary of loans
Loans	244,188,000		244,188,000		223,898,000
Non-PCI loans \| Other loan portfolio
Summary of loans
Loans	1,437,598,000		1,437,598,000		1,444,748,000
Non-PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	544,061,000		544,061,000		569,289,000
Non-PCI loans \| Other loan portfolio \| Consumer
Summary of loans
Loans	595,728,000		595,728,000		611,408,000
Non-PCI loans \| Other loan portfolio \| Lease financing
Summary of loans
Loans	297,809,000		297,809,000		264,051,000
PCI loans
Summary of loans
Loans	34,471,000		34,471,000		42,975,000
Customer outstanding balances	45,000,000.0		45,000,000.0		56,900,000
PCI loans \| Commercial real estate
Summary of loans
Loans	24,886,000		24,886,000		32,440,000
PCI loans \| Commercial real estate \| Commercial
Summary of loans
Loans	2,974,000		2,974,000		4,857,000
PCI loans \| Commercial real estate \| Commercial real estate
Summary of loans
Loans	15,686,000		15,686,000		19,252,000
PCI loans \| Commercial real estate \| Construction and land development
Summary of loans
Loans	6,226,000		6,226,000		8,331,000
PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	8,345,000		8,345,000		8,759,000
PCI loans \| Other loan portfolio \| Consumer
Summary of loans
Loans	$ 1,240,000		$ 1,240,000		$ 1,776,000

LOANS - Impaired Loans (Details) - USD ($)	3 Months Ended		6 Months Ended
LOANS - Impaired Loans (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	666,000	346,000	1,300,000	846,000
Recognized interest income on loans modified under troubled debt restructurings	29,000	$ 28,000	61,000	$ 58,000
PCI loans
Summary of impaired loans
Total impaired loans	34,500,000		34,500,000		$ 43,000,000.0
Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	50,676,000		50,676,000		42,899,000
Commercial real estate \| Commercial \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	8,778,000		8,778,000		8,928,000
Commercial real estate \| Commercial real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	30,583,000		30,583,000		23,868,000
Commercial real estate \| Construction and land development \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	1,360,000		1,360,000		1,307,000
Other loan portfolio \| Residential real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	8,533,000		8,533,000		7,270,000
Other loan portfolio \| Consumer \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	389,000		389,000		569,000
Other loan portfolio \| Lease financing \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	$ 1,033,000		$ 1,033,000		$ 957,000

LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Impaired loans (excluding PCI loans) by portfolio
Difference between the recorded investment and unpaid principal balance	$ 12,100		$ 12,100		$ 11,400
Impaired \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	27,635		27,635		20,861
With a valuation allowance, Unpaid Principal Balance	29,606		29,606		27,989
With a valuation allowance, Average Annual Recorded Investment	23,678	$ 8,698	24,119	$ 8,944
With a related valuation allowance, Interest Income Recognized while on Impaired Status	38	39	82	81
With no related valuation allowance, Recorded Investment	23,041		23,041		22,038
With no related valuation allowance, Unpaid Principal Balance	33,172		33,172		26,301
With no related valuation allowance, Average Annual Recorded Investment	27,417	20,152	27,656	20,474
With no related valuation allowance, Interest Income Recognized while on Impaired Status	5	2	7	2
Total impaired loans	50,676		50,676		42,899
Total, Unpaid Principal Balance	62,778		62,778		54,290
Total, Related Valuation Allowance	10,682		10,682		5,985
Total, Average Annual Recorded Investment	51,095	28,850	51,776	29,418
Total, Interest Income Recognized While on Impaired Status	43	41	89	83
Commercial \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	7,863		7,863		7,945
With a valuation allowance, Unpaid Principal Balance	8,380		8,380		8,102
With a valuation allowance, Average Annual Recorded Investment	8,007	1,229	8,448	1,279
With a related valuation allowance, Interest Income Recognized while on Impaired Status	7	7	13	17
With no related valuation allowance, Recorded Investment	915		915		983
With no related valuation allowance, Unpaid Principal Balance	3,991		3,991		4,392
With no related valuation allowance, Average Annual Recorded Investment	937	864	955	888
Total impaired loans	8,778		8,778		8,928
Total, Unpaid Principal Balance	12,371		12,371		12,494
Total, Related Valuation Allowance	5,311		5,311		4,448
Total, Average Annual Recorded Investment	8,944	2,093	9,403	2,167
Total, Interest Income Recognized While on Impaired Status	7	7	13	17
Commercial real estate \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	13,616		13,616		7,496
With a valuation allowance, Unpaid Principal Balance	14,235		14,235		13,844
With a valuation allowance, Average Annual Recorded Investment	9,435	2,589	9,381	2,769
With a related valuation allowance, Interest Income Recognized while on Impaired Status	23	21	50	41
With no related valuation allowance, Recorded Investment	16,967		16,967		16,372
With no related valuation allowance, Unpaid Principal Balance	23,739		23,739		16,921
With no related valuation allowance, Average Annual Recorded Investment	21,313	15,876	21,512	16,138
Total impaired loans	30,583		30,583		23,868
Total, Unpaid Principal Balance	37,974		37,974		30,765
Total, Related Valuation Allowance	4,395		4,395		523
Total, Average Annual Recorded Investment	30,748	18,465	30,893	18,907
Total, Interest Income Recognized While on Impaired Status	23	21	50	41
Construction and land development \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	109		109		171
With a valuation allowance, Unpaid Principal Balance	155		155		171
With a valuation allowance, Average Annual Recorded Investment	111	100	119	101
With a related valuation allowance, Interest Income Recognized while on Impaired Status		1		2
With no related valuation allowance, Recorded Investment	1,251		1,251		1,136
With no related valuation allowance, Unpaid Principal Balance	1,253		1,253		1,136
With no related valuation allowance, Average Annual Recorded Investment	1,252	711	1,261	725
With no related valuation allowance, Interest Income Recognized while on Impaired Status	1		1
Total impaired loans	1,360		1,360		1,307
Total, Unpaid Principal Balance	1,408		1,408		1,307
Total, Related Valuation Allowance	12		12		54
Total, Average Annual Recorded Investment	1,363	811	1,380	826
Total, Interest Income Recognized While on Impaired Status	1	1	1	2
Residential real estate \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	5,174		5,174		4,055
With a valuation allowance, Unpaid Principal Balance	5,915		5,915		4,662
With a valuation allowance, Average Annual Recorded Investment	5,236	4,167	5,264	4,173
With a related valuation allowance, Interest Income Recognized while on Impaired Status	8	10	19	21
With no related valuation allowance, Recorded Investment	3,359		3,359		3,215
With no related valuation allowance, Unpaid Principal Balance	3,639		3,639		3,516
With no related valuation allowance, Average Annual Recorded Investment	3,367	2,360	3,379	2,381
With no related valuation allowance, Interest Income Recognized while on Impaired Status	3	2	5	2
Total impaired loans	8,533		8,533		7,270
Total, Unpaid Principal Balance	9,554		9,554		8,178
Total, Related Valuation Allowance	668		668		554
Total, Average Annual Recorded Investment	8,603	6,527	8,643	6,554
Total, Interest Income Recognized While on Impaired Status	11	12	24	23
Consumer \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	379		379		428
With a valuation allowance, Unpaid Principal Balance	427		427		444
With a valuation allowance, Average Annual Recorded Investment	395	166	413	175
With no related valuation allowance, Recorded Investment	10		10		141
With no related valuation allowance, Unpaid Principal Balance	12		12		145
With no related valuation allowance, Average Annual Recorded Investment	10	20	11	21
With no related valuation allowance, Interest Income Recognized while on Impaired Status	1		1
Total impaired loans	389		389		569
Total, Unpaid Principal Balance	439		439		589
Total, Related Valuation Allowance	34		34		45
Total, Average Annual Recorded Investment	405	186	424	196
Total, Interest Income Recognized While on Impaired Status	1		1
Lease financing \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	494		494		766
With a valuation allowance, Unpaid Principal Balance	494		494		766
With a valuation allowance, Average Annual Recorded Investment	494	447	494	447
With no related valuation allowance, Recorded Investment	539		539		191
With no related valuation allowance, Unpaid Principal Balance	538		538		191
With no related valuation allowance, Average Annual Recorded Investment	538	321	538	321
Total impaired loans	1,033		1,033		957
Total, Unpaid Principal Balance	1,032		1,032		957
Total, Related Valuation Allowance	262		262		$ 361
Total, Average Annual Recorded Investment	$ 1,032	$ 768	$ 1,033	$ 768

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	$ 4,073,527	$ 4,137,551
Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	46,997	38,187
Total Past Due	68,857	64,461
Current	3,970,199	4,030,115
Loans and Leases Receivable, Gross, Total	4,039,056	4,094,576
Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	12,429	17,494
Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	9,125	7,719
Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	306	1,061
Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,626,344	2,682,268
Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,601,458	2,649,828
Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,437,598	1,444,748
Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	9,955	8,796
Commercial \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	851,561	810,884
Commercial \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	8,163	8,489
Total Past Due	14,768	15,087
Current	833,819	790,940
Loans and Leases Receivable, Gross, Total	848,587	806,027
Commercial \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	3,828	4,013
Commercial \| Commercial real estate \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	2,777	2,581
Commercial \| Commercial real estate \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		4
Commercial real estate \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,524,369	1,639,155
Commercial real estate \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	28,622	21,494
Total Past Due	31,612	24,255
Current	1,477,071	1,595,648
Loans and Leases Receivable, Gross, Total	1,508,683	1,619,903
Commercial real estate \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,489	1,667
Commercial real estate \| Commercial real estate \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	1,501	945
Commercial real estate \| Commercial real estate \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		149
Construction and land development \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	250,414	232,229
Construction and land development \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,312	1,171
Total Past Due	1,312	2,245
Current	242,876	221,653
Loans and Leases Receivable, Gross, Total	244,188	223,898
Construction and land development \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due		989
Construction and land development \| Commercial real estate \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		85
Residential real estate \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	552,406	578,048
Residential real estate \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	7,831	5,894
Total Past Due	9,018	8,480
Current	535,043	560,809
Loans and Leases Receivable, Gross, Total	544,061	569,289
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	8,533	7,270
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	544	1,292
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	643	728
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		566
Consumer \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	596,968	613,184
Consumer \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	338	388
Total Past Due	9,572	8,183
Current	586,156	603,225
Loans and Leases Receivable, Gross, Total	595,728	611,408
Consumer \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	389	569
Consumer \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	5,456	5,211
Consumer \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	3,774	2,533
Consumer \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	4	51
Lease financing \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	297,809	264,051
Lease financing \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	731	751
Total Past Due	2,575	6,211
Current	295,234	257,840
Loans and Leases Receivable, Gross, Total	297,809	264,051
Lease financing \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,033	957
Lease financing \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,112	4,322
Lease financing \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	430	932
Lease financing \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	$ 302	$ 206

LOANS - TDRs by portfolio (Details) - USD ($)	6 Months Ended	12 Months Ended
LOANS - TDRs by portfolio (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Troubled debt restructuring
Allowance for loan losses on TDRs	$ 412,000	$ 557,000
Unfunded commitments	0	0
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	3,373,000	3,651,000
TDR's Nonaccrual	12,722,000	10,362,000
Total	16,095,000	14,013,000
Minimum \| Performing
Troubled debt restructuring
TDRs, individually evaluated for impairment, threshold	50,000
Commercial \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	615,000	435,000
TDR's Nonaccrual	386,000	406,000
Total	1,001,000	841,000
Commercial real estate \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	1,961,000	2,225,000
TDR's Nonaccrual	10,695,000	9,103,000
Total	12,656,000	11,328,000
Construction and land development \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	48,000	51,000
TDR's Nonaccrual	174,000
Total	222,000	51,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	702,000	810,000
TDR's Nonaccrual	1,467,000	853,000
Total	2,169,000	1,663,000
Consumer \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	47,000	130,000
Total	$ 47,000	$ 130,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) loan	Jun. 30, 2018 USD ($) loan	Jun. 30, 2019 USD ($) loan	Jun. 30, 2018 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan	3	8	16	8
Pre-modification outstanding balance	$ 355	$ 254	$ 2,331	$ 254
Post-modification outstanding balance	$ 358	$ 248	$ 2,443	$ 248
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan			1
Recorded balance			$ 43
Commercial \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan	1	1	1	1
Pre-modification outstanding balance	$ 249	$ 23		$ 23
Post-modification outstanding balance	$ 249	$ 22	$ 249	$ 22
Commercial real estate \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan			3
Pre-modification outstanding balance			$ 1,924
Post-modification outstanding balance			$ 1,838
Construction and land development \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan			1
Pre-modification outstanding balance			$ 62
Post-modification outstanding balance			$ 16
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan			1
Recorded balance			$ 43
Residential real estate \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	2	3	9	3
Pre-modification outstanding balance	$ 106	$ 212	$ 330	$ 212
Post-modification outstanding balance	$ 109	$ 207	$ 324	$ 207
Consumer \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan		4	2	4
Pre-modification outstanding balance		$ 19	$ 15	$ 19
Post-modification outstanding balance		$ 19	$ 16	$ 19

LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Summary of loans
Accretion recorded as loan interest income	$ 42,001	$ 46,432	$ 84,359	$ 82,611
PCI loans
Changes in the accretable yield for PCI loans
Balance, beginning of period	11,063	7,630	12,240	5,732
Accretion	(1,937)	(1,190)	(3,013)	(2,351)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)	194	(181)	88	479
Reclassification from (to) non-accretable	1,079	5	1,084	1,159
Balance, end of period	$ 10,399	$ 6,264	$ 10,399	6,264
Alpine Bank \| PCI loans
Changes in the accretable yield for PCI loans
New loans purchased				$ 1,245

LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Changes in allowance for loan losses :
Beginning balance	$ 23,091	$ 17,704	$ 20,903	$ 16,431
Provision for loan losses	4,076	1,854	7,319	3,860
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs	(1,650)	(2,144)	(3,032)	(3,285)
Loan recoveries	408	832	735	1,240
Ending balance	$ 25,925	$ 18,246	$ 25,925	$ 18,246

LOANS - Allowance for loan losses by loan portfolio and recorded investment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Changes in allowance for loan losses :
Beginning balance	$ 23,091	$ 17,704	$ 20,903	$ 16,431
Provision for loan losses	4,076	1,854	7,319	3,860
Charge-offs	(1,650)	(2,144)	(3,032)	(3,285)
Recoveries	408	832	735	1,240
Ending balance	25,925	18,246	25,925	18,246
Allowance for loan losses:
Loans individually evaluated for impairment					$ 10,132	$ 5,492
Loans collectively evaluated for impairment					550	493
Non-impaired loans collectively evaluated for impairment					13,864	13,350
Loans acquired with deteriorated credit quality					1,379	1,568
Total	25,925	17,704	25,925	18,246	25,925	20,903
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					45,430	37,802
Impaired loans collectively evaluated for impairment					5,246	5,097
Non-impaired loans collectively evaluated for impairment					3,988,380	4,051,677
Loans acquired with deteriorated credit quality					34,471	42,975
Loans and Leases Receivable, Gross, Total					4,073,527	4,137,551
PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					34,471	42,975
Commercial real estate
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					2,626,344	2,682,268
Commercial real estate \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					24,886	32,440
Commercial \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance	9,545	5,902	9,524	5,256
Provision for loan losses	558	1,224	676	1,791
Charge-offs	(2)	(1,120)	(114)	(1,145)
Recoveries	14	197	29	301
Ending balance	10,115	6,203	10,115	6,203
Allowance for loan losses:
Loans individually evaluated for impairment					5,242	4,405
Loans collectively evaluated for impairment					69	43
Non-impaired loans collectively evaluated for impairment					4,788	4,971
Loans acquired with deteriorated credit quality					16	105
Total	9,545	5,902	9,524	6,203	10,115	9,524
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					8,175	8,520
Impaired loans collectively evaluated for impairment					603	408
Non-impaired loans collectively evaluated for impairment					839,809	797,099
Loans acquired with deteriorated credit quality					2,974	4,857
Loans and Leases Receivable, Gross, Total					851,561	810,884
Commercial \| Commercial real estate \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					2,974	4,857
Commercial real estate \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance	6,617	5,485	4,723	5,044
Provision for loan losses	2,262	(310)	4,207	197
Charge-offs	(269)	(99)	(327)	(259)
Recoveries	29	301	36	395
Ending balance	8,639	5,377	8,639	5,377
Allowance for loan losses:
Loans individually evaluated for impairment					4,361	476
Loans collectively evaluated for impairment					34	47
Non-impaired loans collectively evaluated for impairment					3,481	3,356
Loans acquired with deteriorated credit quality					763	844
Total	6,617	5,485	4,723	5,377	8,639	4,723
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					30,286	23,431
Impaired loans collectively evaluated for impairment					297	437
Non-impaired loans collectively evaluated for impairment					1,478,100	1,596,035
Loans acquired with deteriorated credit quality					15,686	19,252
Loans and Leases Receivable, Gross, Total					1,524,369	1,639,155
Commercial real estate \| Commercial real estate \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					15,686	19,252
Construction and land development \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance	398	328	372	518
Provision for loan losses	(85)	157	(22)	(58)
Charge-offs			(44)
Recoveries	3	20	10	45
Ending balance	316	505	316	505
Allowance for loan losses:
Loans individually evaluated for impairment						48
Loans collectively evaluated for impairment					12	6
Non-impaired loans collectively evaluated for impairment					304	318
Total	398	328	372	505	316	372
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					1,251	1,249
Impaired loans collectively evaluated for impairment					109	58
Non-impaired loans collectively evaluated for impairment					242,828	222,591
Loans acquired with deteriorated credit quality					6,226	8,331
Loans and Leases Receivable, Gross, Total					250,414	232,229
Construction and land development \| Commercial real estate \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					6,226	8,331
Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	2,424	2,504	2,041	2,750
Provision for loan losses	174	279	688	18
Charge-offs	(223)	(103)	(376)	(139)
Recoveries	49	62	71	113
Ending balance	2,424	2,742	2,424	2,742
Allowance for loan losses:
Loans individually evaluated for impairment					294	233
Loans collectively evaluated for impairment					374	321
Non-impaired loans collectively evaluated for impairment					1,349	1,051
Loans acquired with deteriorated credit quality					407	436
Total	2,424	2,504	2,424	2,742	2,424	2,041
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					4,926	3,929
Impaired loans collectively evaluated for impairment					3,607	3,341
Non-impaired loans collectively evaluated for impairment					535,528	562,019
Loans acquired with deteriorated credit quality					8,345	8,759
Loans and Leases Receivable, Gross, Total					552,406	578,048
Residential real estate \| Other loan portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					8,345	8,759
Consumer \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	2,137	1,309	2,154	1,344
Provision for loan losses	326	522	655	826
Charge-offs	(465)	(349)	(1,021)	(783)
Recoveries	221	147	431	242
Ending balance	2,219	1,629	2,219	1,629
Allowance for loan losses:
Loans collectively evaluated for impairment					34	45
Non-impaired loans collectively evaluated for impairment					1,992	1,926
Loans acquired with deteriorated credit quality					193	183
Total	2,137	1,309	2,219	1,629	2,219	2,154
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment						5
Impaired loans collectively evaluated for impairment					389	564
Non-impaired loans collectively evaluated for impairment					595,339	610,839
Loans acquired with deteriorated credit quality					1,240	1,776
Loans and Leases Receivable, Gross, Total					596,968	613,184
Consumer \| Other loan portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total					1,240	1,776
Lease financing \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	1,970	2,176	2,089	1,519
Provision for loan losses	841	(18)	1,115	1,086
Charge-offs	(691)	(473)	(1,150)	(959)
Recoveries	92	105	158	144
Ending balance	2,212	1,790	2,212	1,790
Allowance for loan losses:
Loans individually evaluated for impairment					235	330
Loans collectively evaluated for impairment					27	31
Non-impaired loans collectively evaluated for impairment					1,950	1,728
Total	$ 1,970	$ 2,176	$ 2,212	$ 1,790	2,212	2,089
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment					792	668
Impaired loans collectively evaluated for impairment					241	289
Non-impaired loans collectively evaluated for impairment					296,776	263,094
Loans and Leases Receivable, Gross, Total					$ 297,809	$ 264,051

PREMISES AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 129,207		$ 129,207		$ 126,230
Accumulated depreciation	(34,383)		(34,383)		(31,390)
Premises and equipment, net	94,824		94,824		94,840
Depreciation	1,600	$ 1,600	3,186	$ 3,083
Land
Property, Plant and Equipment [Line Items]
Premises and equipment gross	20,231		20,231		20,231
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment gross	78,782		78,782		76,141
Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 30,194		$ 30,194		$ 29,858

LEASES (Details) $ in Thousands	3 Months Ended	6 Months Ended
LEASES (Details) $ in Thousands	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
LEASES
Options to extend the leases		true
Renewal term of lease	5 years	5 years
Operating lease right-of-use asset	$ 10,226	$ 10,226
Operating lease liabilities	10,719	10,719
Operating lease cost	706	1,415
Operating cash flows from leases	742	1,483
Right-of-use assets obtained in exchange for lease obligations	$ 181	$ 12,281
Weighted average remaining lease term	5 years 10 months 24 days	5 years 10 months 24 days
Weighted average discount rate	3.12%	3.12%
Projected minimum rental payments
2019 remaining	$ 1,143	$ 1,143
2020	2,382	2,382
2021	2,229	2,229
2022	2,119	2,119
2023	1,594	1,594
Thereafter	2,322	2,322
Total future minimum lease payments	11,789	11,789
Less imputed interest	(1,070)	(1,070)
Total operating lease liabilities	$ 10,719	$ 10,719
Minimum
LEASES
Remaining lease terms	2 months	2 months
Maximum
LEASES
Remaining lease terms	13 years	13 years

MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Mortgage servicing rights:
Balance, beginning of period	$ 55,787,000	$ 56,039,000	$ 56,252,000	$ 55,714,000
Balance, end of period	56,462,000	56,268,000	56,462,000	56,268,000
Valuation allowances:
Balance, beginning of period	2,830,000	3,387,000	2,805,000	3,254,000
Additions		500,000	25,000	633,000
Reductions	(559,000)		(559,000)
Balance, end of period	2,271,000	3,887,000	2,271,000	3,887,000
Mortgage servicing rights, net	54,191,000	52,381,000	54,191,000	52,381,000
Fair Value	54,191,000	52,381,000	54,191,000	52,381,000	$ 52,957,000	$ 53,447,000	$ 52,652,000	$ 52,460,000
Loss on mortgage servicing rights held for sale	515,000	(188,000)	515,000	(188,000)
Mortgage servicing rights held for sale	159,000		159,000			$ 3,545,000
Commercial FHA Mortgage Loans
Mortgage servicing rights:
Originated servicing	1,350,000	911,000	1,563,000	1,912,000
Amortization	(675,000)	(682,000)	(1,353,000)	(1,358,000)
Residential mortgage loans
Valuation allowances:
Sale of mortgage servicing rights held for sale	0	$ 2,700,000	3,300,000	$ 12,900,000
Mortgage servicing rights held for sale	$ 159,000		$ 159,000

MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details) - Commercial FHA Mortgage Loans - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Assumptions Used to Estimate Fair Value
Servicing Fee	0.12%	0.13%
Interest Rate	3.68%	3.67%
Remaining Years to Maturity	29 years 10 months 24 days	30 years 1 month 6 days
Prepayment Rate	8.21%	8.24%
Servicing Cost	$ 1,000	$ 1,000
Maximum
Assumptions Used to Estimate Fair Value
Discount Rate	14.00%	14.00%
Minimum
Assumptions Used to Estimate Fair Value
Discount Rate	10.00%	10.00%

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Finite-lived intangible assets
Gross Carrying Amount	$ 66,483		$ 66,483		$ 66,483
Accumulated Amortization	(32,590)		(32,590)		(29,107)
Total	33,893		33,893		37,376
Amortization of intangible assets	1,673	$ 1,576	3,483	$ 3,251
Core deposits
Finite-lived intangible assets
Gross Carrying Amount	52,712		52,712		52,712
Accumulated Amortization	(27,691)		(27,691)		(24,803)
Total	25,021		25,021		27,909
Customer relationship
Finite-lived intangible assets
Gross Carrying Amount	13,771		13,771		13,771
Accumulated Amortization	(4,899)		(4,899)		(4,304)
Total	$ 8,872		$ 8,872		$ 9,467

DERIVATIVE INSTRUMENTS (Details) - USD ($)	3 Months Ended		6 Months Ended
DERIVATIVE INSTRUMENTS (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	$ 366,842,000		$ 366,842,000		$ 541,581,000
Fair value of asset derivatives	3,791,000		3,791,000		4,492,000
Net gains (losses) recognized on derivative instruments	2,000,000.0	$ 2,000,000.0	701,000	$ 2,100,000
Interest rate lock commitments
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	183,562,000		183,562,000		264,710,000
Fair value of asset derivatives	3,791,000		3,791,000		4,492,000
Forward commitments to sell mortgage-backed securities
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	183,280,000		183,280,000		276,871,000
Notional amount, liability derivatives					54,000
Interest rate swap contracts
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount of interest rate swaps	9,200,000		9,200,000		9,500,000
Interest rate swap contracts \| Other assets
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Fair value of asset derivatives	$ 286,000		$ 286,000		$ 145,000

DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Derivative disclosures
Fair value of asset derivatives	$ 3,791,000	$ 4,492,000
Interest rate swap contracts
Derivative disclosures
Notional amount of interest rate swaps	9,200,000	9,500,000
Interest rate swap contracts \| Other assets
Derivative disclosures
Fair value of asset derivatives	$ 286,000	$ 145,000

DEPOSITS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Classification of deposits
Noninterest-bearing demand	$ 902,286	$ 972,164
Interest-bearing:
Checking	1,009,023	1,002,275
Money market	732,573	862,171
Savings	442,017	442,132
Time	925,308	795,428
Total deposits	$ 4,011,207	$ 4,074,170

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Short-term Debt [Line Items]
Outstanding at period-end	$ 113,844	$ 124,235
Average amount outstanding	128,058	138,135
Maximum amount outstanding at any month end	$ 138,907	$ 173,387
Weighted average interest rate:
During period	0.70%	0.51%
End of period	0.68%	0.71%
Short-Term Borrowings
Investment securities pledged/collateralized for secured borrowings	$ 128,800	$ 132,200
Line of credit	0	0
Federal funds lines of credit	45,000
Commercial real estate
Short-Term Borrowings
Loans and Leases Receivable, Gross, Carrying Amount, Commercial	60,000	67,600
Federal Reserve Discount Window
Short-Term Borrowings
Line of credit	$ 50,900	$ 56,800

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	6 Months Ended	12 Months Ended
	May 31, 2017	Jun. 30, 2019	Dec. 31, 2018
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings		$ 582,387	$ 640,631
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued		2,636	2,636
Preferred stock, par value		$ 2	$ 2
Line of Credit Facility, Maximum Borrowing Capacity		$ 45,000
FHLB advances, collateral for mortgage and home equity line of credit loans		2,010,000	$ 2,220,000
Revolving Credit Facility [Member] \| Maximum
Federal Home Loan Bank Advances, Interest Rate Information
Line of Credit Facility, Maximum Borrowing Capacity	$ 10,000
Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Face Amount	$ 40,000
Principal payment on term loan		$ 1,400
LIBOR \| Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate	2.25%
Variable rate basis	one-month LIBOR
Series G Preferred Stock
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued		181
Preferred stock, par value		$ 1,000
Midland States Bancorp, Inc \| Term loan
FHLB ADVANCES AND OTHER BORROWINGS
Long term debt		$ 29,989	$ 32,840
Midland States Bancorp, Inc \| LIBOR \| Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate		2.25%
Interest rate during the period		4.75%	4.63%
Midland States Bancorp, Inc \| Series G Preferred Stock
FHLB ADVANCES AND OTHER BORROWINGS
Long term debt		$ 181	$ 181
Midland States Bank \| Fixed Rate Term Loan
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings		552,217	607,610
Midland States Bank \| Fixed rate, fixed term maturing through February 2023
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings		$ 22,300	$ 87,700
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate		2.37%	2.35%
Midland States Bank \| Putable fixed rate loan maturing through August 2025
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings		$ 530,000	$ 520,000
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate		2.24%	2.09%

EARNINGS PER SHARE (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net income	$ 16,355	$ 12,782	$ 30,337	$ 14,588
Preferred dividends declared	(83)	(83)	(165)	(166)
Preferred stock, premium amortization	49	47	97	94
Net income available to common shareholders	16,321	12,746	30,269	14,516
Common shareholder dividends	(5,791)	(5,201)	(11,567)	(9,409)
Unvested restricted stock award dividends	(49)	(32)	(96)	(63)
Undistributed earnings to unvested restricted stock awards	(85)	(44)	(150)	(31)
Undistributed earnings to common shareholders	10,396	7,469	18,456	5,013
Basic
Common shareholder dividends	(5,791)	(5,201)	(11,567)	(9,409)
Undistributed earnings to common shareholders	10,396	7,469	18,456	5,013
Net income available to common shareholders	16,187	12,670	30,023	14,422
Diluted
Common shareholder dividends	(5,791)	(5,201)	(11,567)	(9,409)
Undistributed earnings to common shareholders	10,396	7,469	18,456	5,013
Net income available to common shareholders	16,187	12,670	30,023	14,422
Add back:
Undistributed earnings reallocated from unvested restricted stock awards	1	1	1	1
Total common shareholders earnings, diluted	$ 16,188	$ 12,671	$ 30,024	$ 14,423
Weighted average common shares outstanding, basic (In shares)	24,081,777	23,815,436	24,040,032	22,365,927
Weighted average common shares outstanding, diluted (In shares)	24,303,211	24,268,111	24,254,612	22,817,472
Basic earnings per common share (In dollars per share)	$ 0.67	$ 0.53	$ 1.25	$ 0.64
Diluted earnings per common share (In dollars per share)	$ 0.67	$ 0.52	$ 1.24	$ 0.63
Options
Add back:
Options	221,434	452,675	214,580	451,545

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Assets
Investment securities available for sale	$ 609,657		$ 609,657
Equity securities	3,369		3,369		$ 3,334
Loans held for sale	22,143		22,143		30,401
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	159		159		3,545
Gains (losses) recognized on assets measured on non-recurring basis
Mortgage servicing rights	559	$ (500)	534	$ (633)
Mortgage servicing rights held for sale	515	(188)	515	(188)
Impaired loans	(1,252)	(2,041)	(2,233)	(2,916)
Other real estate owned		(126)	(16)	(126)
Total loss on assets measured on a nonrecurring basis	(178)	$ (2,855)	(1,200)	$ (3,863)
U.S. Treasury securities
Assets
Investment securities available for sale					24,650
Government sponsored entity debt securities
Assets
Investment securities available for sale	74,875		74,875		75,684
State and municipal securities
Assets
Investment securities available for sale	143,729		143,729		159,262
Corporate Securities
Assets
Investment securities available for sale	93,691		93,691		71,550
Equity Security
Assets
Investment securities available for sale					657,451
Level 1
Assets
Investment securities available for sale					24,650
Level 2
Assets
Investment securities available for sale	608,722		608,722		634,212
Equity securities	3,369		3,369
Loans held for sale	22,143		22,143		30,401
Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	3,791		3,791		4,492
Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	286		286		145
Liabilities
Derivative liability	286		286		145
Level 3
Assets
Investment securities available for sale	935		935		1,923
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	54,200		54,200		53,400
Recurring member
Assets
Loans held for sale	22,143		22,143		30,401
Total Assets	639,246		639,246		695,823
Recurring member \| U.S. Treasury securities
Assets
Investment securities available for sale					24,650
Recurring member \| Government sponsored entity debt securities
Assets
Investment securities available for sale	74,875		74,875		75,684
Recurring member \| Agency mortgage-backed securities
Assets
Investment securities available for sale	297,362		297,362		326,305
Recurring member \| State and municipal securities
Assets
Investment securities available for sale	143,729		143,729		159,262
Recurring member \| Corporate Securities
Assets
Investment securities available for sale	93,691		93,691		71,550
Recurring member \| Equity Security
Assets
Equity securities	3,369		3,369		3,334
Recurring member \| Interest rate lock commitments
Assets
Derivative Assets	3,791		3,791		4,492
Recurring member \| Interest rate swap contracts
Assets
Derivative Assets	286		286		145
Liabilities
Derivative liability	286		286		145
Recurring member \| Level 1
Assets
Total Assets					24,650
Recurring member \| Level 1 \| U.S. Treasury securities
Assets
Investment securities available for sale					24,650
Recurring member \| Level 2
Assets
Loans held for sale	22,143		22,143		30,401
Total Assets	638,311		638,311		669,250
Recurring member \| Level 2 \| Government sponsored entity debt securities
Assets
Investment securities available for sale	74,875		74,875		75,684
Recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Investment securities available for sale	297,362		297,362		326,305
Recurring member \| Level 2 \| State and municipal securities
Assets
Investment securities available for sale	143,729		143,729		159,262
Recurring member \| Level 2 \| Corporate Securities
Assets
Investment securities available for sale	92,756		92,756		69,627
Recurring member \| Level 2 \| Equity Security
Assets
Equity securities	3,369		3,369		3,334
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	3,791		3,791		4,492
Recurring member \| Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	286		286		145
Liabilities
Derivative liability	286		286		145
Recurring member \| Level 3
Assets
Total Assets	935		935		1,923
Recurring member \| Level 3 \| Corporate Securities
Assets
Investment securities available for sale	935		935		1,923
Non recurring member
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	54,191		54,191		53,447
Mortgage servicing rights held for sale	159		159		3,545
Impaired loans	13,170		13,170		11,238
Other real estate owned	47		47		1,439
Assets held for sale	1,297		1,297		1,687
Non recurring member \| Level 1
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	159		159		3,545
Non recurring member \| Level 2
Assets measured at fair value on a non-recurring basis:
Impaired loans	10,842		10,842		9,226
Other real estate owned	47		47		1,439
Assets held for sale	1,297		1,297		1,687
Non recurring member \| Level 3
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	54,191		54,191		53,447
Impaired loans	$ 2,328		$ 2,328		$ 2,012

FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - Corporate Securities - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 1,930	$ 4,787	$ 1,923	$ 4,779
Total realized in earnings	20	63	42	119
Total unrealized in other comprehensive income	5	562	12	562
Net settlements (principal and interest)	(1,020)	(55)	(1,042)	(103)
Balance, end of period	$ 935	$ 5,357	$ 935	$ 5,357

FAIR VALUE OF FINANCIAL INSTRUMENTS- Quantitative Information (Details) $ in Thousands	Jun. 30, 2019 USD ($) item	Dec. 31, 2018 USD ($) item
Non recurring member
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights \| $	$ 54,191	$ 53,447
Impaired loans \| $	13,170	11,238
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights \| $	54,200	53,400
Level 3 \| Non recurring member
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights \| $	54,191	53,447
Impaired loans \| $	$ 2,328	$ 2,012
Level 3 \| Non recurring member \| Mortgage servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation technique for servicing asset	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| Non recurring member \| Discounted cash flow \| Mortgage servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights \| $	$ 54,191	$ 53,447
Level 3 \| Non recurring member \| Fair value of collateral \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans \| $	$ 2,328	$ 2,012
Minimum \| Level 3 \| Non recurring member \| Measurement Input, Discount Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset \| item	0.1000	0.1000
Minimum \| Level 3 \| Non recurring member \| Measurement Input, Prepayment Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset \| item	0.0800	0.0800
Minimum \| Level 3 \| Non recurring member \| Measurement Input Discount Rate For Type Of Property Age Of Appraisal And Current Status [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for impaired loans \| item	0.0432	0.0500
Maximum \| Level 3 \| Non recurring member \| Measurement Input, Discount Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset \| item	0.2700	0.2700
Maximum \| Level 3 \| Non recurring member \| Measurement Input, Prepayment Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset \| item	0.1800	0.1800
Maximum \| Level 3 \| Non recurring member \| Measurement Input Discount Rate For Type Of Property Age Of Appraisal And Current Status [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for impaired loans \| item	0.0800	0.0726
Weighted average \| Level 3 \| Non recurring member \| Measurement Input, Discount Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset \| item		0.1112

FAIR VALUE OF FINANCIAL INSTRUMENTS- Fair value option and gains and losses from fair value changes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	$ 22,143		$ 22,143		$ 30,401
Difference	665		665		1,079
Contractual principal	21,478		21,478		29,322
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	72	$ 428	(313)	$ 85
Residential loans held for sale
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	7,198		7,198		8,121
Difference	364		364		484
Contractual principal	6,834		6,834		7,637
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	38	168	(19)	60
Commercial real estate
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	14,945		14,945		22,280
Difference	301		301		595
Contractual principal	14,644		14,644		$ 21,685
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	$ 34	$ 260	$ (294)	$ 25

FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Investment securities available for sale	$ 609,657
Equity securities	3,369	$ 3,334
Loans held for sale	22,143	30,401
Accrued interest receivable	15,509	16,560
Liabilities
Trust preferred debentures	48,041	47,794
Accrued interest payable	5,455	4,855
Level 1
Assets
Cash and due from banks	244,239	210,780
Federal funds sold	1,176	2,920
Investment securities available for sale		24,650
Level 2
Assets
Investment securities available for sale	608,722	634,212
Equity securities	3,369
Nonmarketable equity securities	43,175	42,472
Loans, net	4,056,912
Loans held for sale	22,143	30,401
Accrued interest receivable	15,509	16,560
Liabilities
Deposits	4,016,503	4,069,098
Short-term borrowings	113,844	124,235
FHLB and other borrowings	594,404	641,050
Subordinated debt	93,761	91,926
Trust preferred debentures	55,218	56,805
Accrued interest payable	5,455	4,855
Level 3
Assets
Investment securities available for sale	935	1,923
Loans, net		4,091,438
Carrying value
Assets
Cash and due from banks	244,239	210,780
Federal funds sold	1,176	2,920
Investment securities available for sale	609,657	660,785
Equity securities	3,369
Nonmarketable equity securities	43,175	42,472
Loans, net	4,047,602	4,116,648
Loans held for sale	22,143	30,401
Accrued interest receivable	15,509	16,560
Liabilities
Deposits	4,011,207	4,074,170
Short-term borrowings	113,844	124,235
FHLB and other borrowings	582,387	640,631
Subordinated debt	94,215	94,134
Trust preferred debentures	48,041	47,794
Accrued interest payable	5,455	4,855
Fair value
Assets
Cash and due from banks	244,239	210,780
Federal funds sold	1,176	2,920
Investment securities available for sale	609,657	660,785
Equity securities	3,369
Nonmarketable equity securities	43,175	42,472
Loans, net	4,056,912	4,091,438
Loans held for sale	22,143	30,401
Accrued interest receivable	15,509	16,560
Liabilities
Deposits	4,016,503	4,069,098
Short-term borrowings	113,844	124,235
FHLB and other borrowings	594,404	641,050
Subordinated debt	93,761	91,926
Trust preferred debentures	55,218	56,805
Accrued interest payable	5,455	4,855
Interest rate lock commitments \| Level 2
Assets
Derivative Assets	3,791	4,492
Interest rate lock commitments \| Carrying value
Assets
Derivative Assets	3,791	4,492
Interest rate lock commitments \| Fair value
Assets
Derivative Assets		4,492
Interest rate swap contracts \| Level 2
Assets
Derivative Assets	286	145
Liabilities
Derivative Liability	286	145
Interest rate swap contracts \| Carrying value
Assets
Derivative Assets	286	145
Liabilities
Derivative Liability	286	145
Interest rate swap contracts \| Fair value
Assets
Derivative Assets		145
Liabilities
Derivative Liability		145
Corporate Securities
Assets
Investment securities available for sale	$ 93,691	$ 71,550

COMMITMENTS, CONTINGENCIES AND CREDIT RISK - Maturities (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Anticipated material loss			$ 0
Losses as a result of make whole requests and loan repurchases	$ 9,000	$ 20,000
Liability for unresolved repurchase demands			289,000	$ 492,000
Commitments to extend credit
Loan commitments			761,832,000	663,555,000
Financial guarantees - standby letters of credit
Loan commitments			$ 127,135,000	$ 142,859,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 46,077	$ 48,286	$ 91,678	$ 86,471
Provision for loan losses	4,076	1,854	7,319	3,860
Noninterest income	19,587	15,847	36,662	32,349
Noninterest expense	40,194	46,452	81,291	95,951
Income (loss) before income taxes (benefit)	21,394	15,827	39,730	19,009
Income taxes (benefit)	5,039	3,045	9,393	4,421
Net income (loss)	16,355	12,782	30,337	14,588
Total assets	5,546,055	5,730,600	5,546,055	5,730,600	$ 5,637,673
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)	48,930	51,050	97,448	91,766
Provision for loan losses	4,076	1,854	7,319	3,860
Noninterest income	9,025	5,681	17,965	14,698
Noninterest expense	33,809	38,216	69,180	82,582
Income (loss) before income taxes (benefit)	20,070	16,661	38,914	20,022
Income taxes (benefit)	5,132	5,201	10,107	6,580
Net income (loss)	14,938	11,460	28,807	13,442
Total assets	5,478,515	5,780,313	5,478,515	5,780,313
Commercial FHA origination and servicing
Segment Reporting Information [Line Items]
Net interest income (expense)	(138)	(95)	(314)	(58)
Noninterest income	5,116	447	8,354	3,968
Noninterest expense	3,004	4,718	5,815	8,256
Income (loss) before income taxes (benefit)	1,974	(4,366)	2,225	(4,346)
Income taxes (benefit)	551	(1,402)	622	(995)
Net income (loss)	1,423	(2,964)	1,603	(3,351)
Total assets	88,320	94,481	88,320	94,481
Wealth management
Segment Reporting Information [Line Items]
Noninterest income	5,504	5,316	10,457	9,395
Noninterest expense	3,772	3,257	7,019	5,643
Income (loss) before income taxes (benefit)	1,732	2,059	3,438	3,752
Income taxes (benefit)	197	151	337	292
Net income (loss)	1,535	1,908	3,101	3,460
Total assets	19,398	17,171	19,398	17,171
Other
Segment Reporting Information [Line Items]
Net interest income (expense)	(2,715)	(2,669)	(5,456)	(5,237)
Noninterest income	(58)	4,403	(114)	4,288
Noninterest expense	(391)	261	(723)	(530)
Income (loss) before income taxes (benefit)	(2,382)	1,473	(4,847)	(419)
Income taxes (benefit)	(841)	(905)	(1,673)	(1,456)
Net income (loss)	(1,541)	2,378	(3,174)	1,037
Total assets	$ (40,178)	$ (161,365)	$ (40,178)	$ (161,365)

REVENUE FROM CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Noninterest income - out-of-scope of Topic 606	$ 7,257		$ 12,986
Total noninterest income	$ 19,587	$ 15,847	$ 36,662	$ 32,349
Contract Acquisition Costs
Practical expedient, amortization period	1 year		1 year
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - out-of-scope of Topic 606		3,762		10,775
Total noninterest income		15,847		32,349
Trust management/administration fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	$ 4,082		$ 7,699
Trust management/administration fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		4,322		7,441
Investment advisory fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	539		1,068
Investment advisory fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		495		960
Investment brokerage fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	232		451
Investment brokerage fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		286		550
Other
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	651		1,239
Other \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		213		444
Nonsufficient fund fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	1,801		3,555
Nonsufficient fund fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		1,991		3,441
Other
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	838		1,604
Other \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		702		1,219
Interchange revenues
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	3,010		5,690
Interchange revenues \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		2,929		4,974
Merchant services revenue
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	389		764
Merchant services revenue \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		460		798
Other
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	$ 788		$ 1,606
Other \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606		$ 687		$ 1,747

SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands	Jul. 17, 2019 USD ($) shares	Aug. 06, 2019 USD ($)	Jul. 29, 2019 $ / shares	Jun. 30, 2019 USD ($) item	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)
Subsequent Event [Line Items]
Total assets				$ 5,546,055	$ 5,637,673	$ 5,730,600
Loans				4,073,527	4,137,551
Total deposits				$ 4,011,207	$ 4,074,170
HomeStar Financial Group, Inc.
Subsequent Event [Line Items]
Number of banking centers \| item				5
Total assets				$ 370,400
Loans				219,500
Total deposits				$ 321,800
Subsequent Events \| Series H preferred stock
Subsequent Event [Line Items]
Redemption price per share \| $ / shares			$ 1,000
Subsequent Events \| Maximum
Subsequent Event [Line Items]
The amount of stock repurchase program authorized		$ 25,000
Subsequent Events \| HomeStar Financial Group, Inc.
Subsequent Event [Line Items]
Total consideration	$ 11,400
Shares issued \| shares	405,000
Cash to pay outstanding trust preferred securities and subordinated debentures plus accrued interest	$ 1,000

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Common dividend declared, per share	$ 0.2425	$ 0.22	$ 0.4850	$ 0.44

MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Commercial FHA Mortgage Loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	$ 4,030.0	$ 3,980.0
Residential mortgage loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	$ 58.6	$ 897.6

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended	6 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2019
Chairman
Related Party Transaction [Line Items]
Payments to related party	$ 325,000	$ 535,000

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) loan	Jan. 01, 2019 USD ($)
Operating lease right-of-use asset	$ 10,226
Operating lease liabilities	$ 10,719
Number of distinct loan portfolio \| loan	12
ASU 2016-02
Operating lease right-of-use asset		$ 12,100
Operating lease liabilities		$ 12,100

LOANS - Risk category (Details) $ in Thousands	6 Months Ended
LOANS - Risk category (Details) $ in Thousands	Jun. 30, 2019 USD ($) region	Dec. 31, 2018 USD ($)
Risk category
Number of main regions \| region	4
Loans and Leases Receivable, Gross, Total	$ 4,073,527	$ 4,137,551
Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	2,626,344	2,682,268
Non-PCI loans
Risk category
Loans and Leases Receivable, Gross, Total	4,039,056	4,094,576
Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	2,601,458	2,649,828
Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	2,438,622	2,503,221
Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	48,166	53,857
Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	75,122	61,115
Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	38,097	31,154
Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	1,451	481
Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,437,598	1,444,748
Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	1,427,643	1,435,952
Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	9,955	8,796
Commercial \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	851,561	810,884
Commercial \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	848,587	806,027
Commercial \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	796,947	748,296
Commercial \| Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	22,391	35,103
Commercial \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	21,086	14,139
Commercial \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	8,163	8,489
Commercial real estate \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	1,524,369	1,639,155
Commercial real estate \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	1,508,683	1,619,903
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	1,403,625	1,536,127
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	23,284	15,306
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	53,152	46,976
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	28,622	21,494
Construction and land development \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	250,414	232,229
Construction and land development \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	244,188	223,898
Construction and land development \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	238,050	218,798
Construction and land development \| Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	2,491	3,448
Construction and land development \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	884
Construction and land development \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	1,312	1,171
Construction and land development \| Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	1,451	481
Residential real estate \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	552,406	578,048
Residential real estate \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	544,061	569,289
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	535,528	562,019
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	8,533	7,270
Consumer \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	596,968	613,184
Consumer \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	595,728	611,408
Consumer \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	595,339	610,839
Consumer \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	389	569
Lease financing \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	297,809	264,051
Lease financing \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	297,809	264,051
Lease financing \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	296,776	263,094
Lease financing \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	$ 1,033	$ 957

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Goodwill [Line Items]
Goodwill	$ 164,673	$ 164,673
Banking
Goodwill [Line Items]
Goodwill	149,035
Commercial FHA origination and servicing
Goodwill [Line Items]
Goodwill	10,892
Wealth management
Goodwill [Line Items]
Goodwill	$ 4,746

EARNINGS PER SHARE (Details) - shares	3 Months Ended		6 Months Ended
EARNINGS PER SHARE (Details) - shares	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	96,837	31,259	96,837	31,259