Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Mar. 01, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Midland States Bancorp, Inc.
Entity Central Index Key	0001466026
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 563,546,452
Entity Common Stock, Shares Outstanding		23,738,671
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 214,519	$ 189,543
Federal funds sold	683	1,173
Cash and cash equivalents	215,202	190,716
Investment securities available for sale, at fair value	450,525	246,339
Investment securities held to maturity, at amortized cost (fair value of $0 and $81,952 at December 31, 2017 and 2016, respectively)		78,672
Loans	3,226,678	2,319,976
Allowance for loan losses	(16,431)	(14,862)
Total loans, net	3,210,247	2,305,114
Loans held for sale, at fair value	50,089	70,565
Premises and equipment, net	76,162	66,692
Other real estate owned	5,708	3,560
Nonmarketable equity securities	34,796	19,485
Accrued interest receivable	11,715	8,202
Mortgage servicing rights, at lower of cost or market	56,352	68,008
Mortgage servicing rights held for sale	10,176
Intangible assets	16,932	7,187
Goodwill	98,624	48,836
Cash surrender value of life insurance policies	113,366	74,226
Accrued income taxes receivable	8,358	5,862
Deferred tax assets, net	12,024
Other assets	42,425	40,259
Total assets	4,412,701	3,233,723
Deposits:
Noninterest-bearing	724,443	562,333
Interest-bearing	2,406,646	1,842,033
Total deposits	3,131,089	2,404,366
Short-term borrowings	156,126	131,557
FHLB advances and other borrowings	496,436	237,518
Subordinated debt	93,972	54,508
Trust preferred debentures	45,379	37,405
Accrued interest payable	2,531	1,045
Deferred tax liabilities, net		8,598
Other liabilities	37,623	36,956
Total liabilities	3,963,156	2,911,953
Shareholders' Equity:
Preferred stock, Series H, $2 par value, $1,000 per share liquidation value; 2,636 shares authorized, issued and outstanding at December 31, 2017	2,970
Common stock, $0.01 par value; 40,000,000 shares authorized; 19,122,049 and 15,483,499 shares issued and outstanding at December 31, 2017 and 2016, respectively	191	155
Capital surplus	330,148	209,712
Retained earnings	114,478	112,513
Accumulated other comprehensive income (loss)	1,758	(610)
Total shareholders' equity	449,545	321,770
Total liabilities and shareholders' equity	$ 4,412,701	$ 3,233,723

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Investment securities held to maturity	$ 0	$ 81,952,000
Liquidation value	$ 1,000
Preferred stock, par value	$ 2
Preferred stock, shares authorized	2,636
Preferred stock, shares issued	2,636
Preferred stock, shares outstanding	2,636
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	19,122,049	15,483,499
Common stock, shares outstanding	19,122,049	15,483,499

CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loans:
Taxable	$ 135,898	$ 102,211	$ 97,826
Tax exempt	1,255	1,155	1,175
Loans held for sale	2,297	3,320	2,988
Investment securities:
Taxable	6,763	9,294	11,086
Tax exempt	3,741	3,634	3,916
Nonmarketable equity securities	1,194	687	416
Federal funds sold and cash investments	1,965	948	389
Total interest income	153,113	121,249	117,796
Interest expense:
Deposits	12,132	8,936	7,511
Short-term borrowings	379	303	237
FHLB advances and other borrowings	4,594	1,057	741
Subordinated debt	4,054	3,858	2,731
Trust preferred debentures	2,292	1,841	1,669
Total interest expense	23,451	15,995	12,889
Net interest income	129,662	105,254	104,907
Provision for loan losses	9,556	5,591	11,127
Net interest income after provision for loan losses	120,106	99,663	93,780
Noninterest income:
Commercial FHA revenue	17,752	22,064	20,175
Residential mortgage banking revenue	9,119	13,389	17,634
Wealth management revenue	13,340	8,091	7,292
Service charges on deposit accounts	5,975	3,904	3,969
Interchange revenue	5,353	3,750	3,562
FDIC loss-sharing expense		(1,661)	(566)
Gain on sales of investment securities, net	222	14,702	193
Other-than-temporary impairment on investment securities		(824)	(461)
Gain on sales of other real estate owned	145	113	600
Other income	7,456	8,529	7,084
Total noninterest income	59,362	72,057	59,482
Noninterest expense:
Salaries and employee benefits	78,712	66,293	63,313
Occupancy and equipment	14,659	13,080	13,151
Data processing	15,171	10,658	10,197
FDIC insurance	1,806	1,707	2,051
Professional	13,896	8,049	8,687
Marketing	3,290	2,733	2,891
Communications	2,473	2,150	2,354
Loan expense	1,954	1,957	2,960
Other real estate owned	800	935	945
Amortization of intangible assets	3,325	2,147	2,460
Loss on mortgage servicing rights held for sale	4,059
Other expense	12,852	11,580	8,838
Total noninterest expense	152,997	121,289	117,847
Income before income taxes	26,471	50,431	35,415
Income taxes	10,415	18,889	11,091
Net income	16,056	31,542	24,324
Preferred stock dividends and premium amortization	83
Net income available to common shareholders	$ 15,973	$ 31,542	$ 24,324
Per common share data:
Basic earnings per common share	$ 0.89	$ 2.22	$ 2.03
Diluted earnings per common share	$ 0.87	$ 2.17	$ 2.00
Weighted average common shares outstanding	17,781,631	14,130,552	11,902,455
Weighted average diluted common shares outstanding	18,283,214	14,428,839	12,112,403

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 16,056	$ 31,542	$ 24,324
Investment securities available for sale:
Unrealized gains (losses) that occurred during the period	443	3,556	(7,278)
Reclassification adjustment for securities transferred from held to maturity to available for sale	3,366
Reclassification adjustment for realized net gains on sales of investment securities included in net income	(222)	(14,702)	(193)
Income tax effect	(1,104)	4,469	3,007
Change in investment securities available for sale, net of tax	2,483	(6,677)	(4,464)
Investment securities held to maturity:
Amortization of unrealized gain on investment securities transferred from available-for-sale	(188)	(66)	(356)
Income tax effect	73	29	143
Change in investment securities held to maturity, net of tax	(115)	(37)	(213)
Cash flow hedges:
Change in fair value of interest rate swap		126	115
Income tax effect		(51)	(46)
Change in cash flow hedges, net of tax		75	69
Other comprehensive income (loss), net of tax	2,368	(6,639)	(4,608)
Total comprehensive income	$ 18,424	$ 24,903	$ 19,716

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	CedarPoint Common stock	CedarPoint Capital surplus	CedarPoint	Centrue Preferred stock	Centrue Common stock	Centrue Capital surplus	Centrue	Preferred stock	Common stock	Capital surplus	Retained earnings	Accumulated other comprehensive (loss) income	Total
Beginning Balance at Dec. 31, 2014									$ 117	$ 134,423	$ 74,279	$ 10,637	$ 219,456
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income											24,324		24,324
Compensation expense for stock option grants										413			413
Amortization of restricted stock awards										517			517
Common dividends declared											(7,692)		(7,692)
Issuance of common stock under employee benefits plans									1	469			470
Other comprehensive income (loss)												(4,608)	(4,608)
Ending Balance (Scenario, Previously Reported [Member]) at Dec. 31, 2015									118	135,822	90,911	6,029	232,880
Ending Balance at Dec. 31, 2015									118	135,909	90,824	6,029	232,880
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle \| Adjustments for New Accounting Principle, Early Adoption [Member] \| Accounting Standards Update 2016-09 [Member]										87	(87)
Net income											31,542		31,542
Compensation expense for stock option grants										492			492
Amortization of restricted stock awards										555			555
Common dividends declared											(9,853)		(9,853)
Initial public offering of 3,590,065 shares of common stock, net of issuance costs									36	71,439			71,475
Issuance of common stock under employee benefits plans									1	1,317			1,318
Other comprehensive income (loss)												(6,639)	(6,639)
Ending Balance at Dec. 31, 2016									155	209,712	112,513	(610)	321,770
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income											16,056		16,056
Compensation expense for stock option grants										548			548
Amortization of restricted stock awards										836			836
Preferred dividends declared											(184)		(184)
Amortization of preferred stock premium								$ (101)			101		101
Common dividends declared											(14,008)		(14,008)
Acquisition	$ 1	$ 3,350	$ 3,351	$ 3,071	$ 32	$ 112,480	$ 115,583
Issuance of common stock under employee benefits plans									3	3,222			3,225
Other comprehensive income (loss)												2,368	2,368
Ending Balance at Dec. 31, 2017								$ 2,970	$ 191	$ 330,148	$ 114,478	$ 1,758	$ 449,545

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Common dividend declared, per share	$ 0.80	$ 0.72	$ 0.65
IPO
Common stock shares		3,590,065

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 16,056	$ 31,542	$ 24,324
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	9,556	5,591	11,127
Depreciation on premises and equipment	5,014	5,080	5,139
Amortization of intangible assets	3,325	2,147	2,460
FDIC loss-sharing expense		1,661	566
Amortization of restricted stock awards	836	555	517
Compensation expense for stock option grants	548	492	413
Increase in cash surrender value of life insurance	(2,791)	(1,497)	(1,474)
Provision for deferred income taxes	12,032	14,541	6,474
Investment securities amortization, net	1,960	1,133	1,202
Other-than-temporary impairment on investment securities		824	461
Gain on sales of investment securities, net	(222)	(14,702)	(193)
Gain on sales of other real estate owned	(145)	(113)	(600)
Write-down of other real estate owned	244	247	114
Origination of loans held for sale	(778,626)	(1,176,716)	(943,844)
Proceeds from sales of loans held for sale	815,471	1,184,739	1,002,770
Gain on loans sold and held for sale	(24,295)	(35,127)	(34,017)
Amortization of mortgage servicing rights	5,107	6,141	5,015
Impairment of mortgage servicing rights	2,324	3,135	448
Loss on mortgage servicing rights held for sale	4,059
Net change in operating assets and liabilities:
Accrued interest receivable	(1,137)	(505)	945
Accrued interest payable	1,211	66	(88)
Accrued income taxes receivable	(2,496)	2,892	(4,775)
Other assets	5,260	(6,302)	(2,722)
Other liabilities	(2,835)	(313)	(945)
Net cash provided by operating activities	70,456	25,511	73,317
Investment securities available for sale:
Purchases	(259,098)	(198,680)	(83,668)
Sales	22,595	115,999	62,751
Maturities and payments	247,929	74,948	29,989
Investment securities held to maturity:
Purchases	(3,155)	(2,617)	(809)
Maturities	16,889	11,019	14,225
Net increase in loans	(238,398)	(335,943)	(209,109)
Proceeds from sale of premises and equipment	4,279	11	55
Purchases of premises and equipment	(6,182)	(2,179)	(6,115)
Purchase of bank-owned life insurance		(20,000)	(20,000)
Purchases of nonmarketable equity securities	(18,376)	(4,103)	(5,311)
Sales of nonmarketable equity securities	11,233	90	1,918
Proceeds from sales of other real estate owned	6,189	6,199	6,617
Net cash paid in acquisitions	(18,519)	(5,191)	(20,053)
Net cash used in investing activities	(234,614)	(360,447)	(229,510)
Cash flows from financing activities:
Net (decrease) increase in deposits	(13,144)	36,718	217,015
Net increase (decrease) in short-term borrowings	10,135	24,019	(22,176)
Proceeds from FHLB borrowings	447,357	1,015,000	47,500
Payments made on FHLB borrowings	(320,857)	(817,500)	(67,500)
Proceeds from other borrowings, net of issuance costs	39,964
Payments made on other borrowings	(3,198)		(14,177)
Proceeds from issuance of subordinated debt, net of issuance costs	39,354		55,325
Payments made on subordinated debt		(8,000)
Cash dividends paid on preferred stock	(184)
Cash dividends paid on common stock	(14,008)	(9,853)	(7,692)
Proceeds from issuance of common stock in initial public offering, net of issuance costs		71,475
Proceeds from issuance of common stock under employee benefit plans	3,225	1,318	470
Net cash provided by financing activities	188,644	313,177	208,765
Net increase (decrease) in cash and cash equivalents	24,486	(21,759)	52,572
Cash and cash equivalents:
Beginning of period	190,716	212,475	159,903
End of period	215,202	190,716	212,475
Cash payments for:
Interest paid on deposits and borrowed funds	21,965	15,929	12,977
Income tax paid	653	1,073	8,541
Supplemental disclosures of noncash investing and financing activities:
Transfer of investment securities held to maturity to investment securities available for sale	64,520
Transfer of loans to other real estate owned	3,718	$ 4,839	$ 3,533
Transfer of premises and equipment to assets held for sale	3,988
Transfer of mortgage servicing rights at lower of cost or market to mortgage servicing rights held for sale	$ 14,234

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 1 – Summary of Significant Accounting Policies Nature of Operations 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 Colorado, and provides a broad array of traditional community banking and other complementary financial services, including commercial lending, residential mortgage origination, wealth management, merchant services and prime consumer lending. We also originate and service government sponsored mortgages for multifamily and healthcare facilities through our subsidiary, Love Funding Corporation (“Love Funding”), based in Washington, D.C. Our commercial equipment leasing and finance business, which operates on a nationwide basis, was formerly conducted through our subsidiary, Heartland Business Credit Corporation (“Business Credit”), based in Denver, Colorado, and beginning in January 2018 was brought directly into the Bank as Midland Equipment Finance. On June 9, 2017, we completed the acquisition of Centrue Financial Corporation (“Centrue”) and its banking subsidiary, Centrue Bank, as more fully described in Note 2 to the consolidated financial statements. Through the Centrue acquisition, we greatly expanded our commercial and retail banking presence in northern and central Illinois. 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 Federal Housing Administration (“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. Initial Public Offering On May 24, 2016, we completed our initial public offering and received gross proceeds of $67.0 million for the 3,044,252 shares of common stock sold by us in the offering. On June 6, 2016, we received additional gross proceeds of $12.0 million for the 545,813 shares of common stock sold when the underwriters fully exercised their option to purchase additional shares of common stock. After deducting underwriting discounts and offering expenses, we received total net proceeds of $71.5 million from the initial public offering. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. 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 annual periods presented herein, have been included. Certain reclassifications of 2016 amounts have been made to conform to the 2017 presentation but do not have an effect on net income. 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 consolidated financial statements. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days. Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities and non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as trading, available for sale or held to maturity at the time of purchase. Securities purchased with the intention of recognizing short-term profits or which are actively bought and sold are classified as trading account securities and reported at fair value. Unrealized gains and losses on trading securities are included in earnings. Held‑to‑maturity securities are those debt instruments which the Company has the positive intent and ability to hold until maturity. Held‑to‑maturity securities are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. All other securities are classified as available for sale. Available‑for‑sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available‑for‑sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available‑for‑sale or held‑to‑maturity security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other‑than‑temporary impairment (“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; projected cash flows on covered non‑agency mortgage‑backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized over the estimated life or to the earliest call date and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”), and other nonmarketable equity securities. The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank is also a member of its regional FRB. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Loans Non‑Purchased Credit Impaired loans. Non‑Purchased Credit Impaired (“PCI”) loans, for which the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as loans in the consolidated balance sheets. Non‑PCI loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of any unearned discount or unamortized premium. Interest income is recorded on the accrual basis in accordance with the terms of the respective loan. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well‑secured and management believes full collectability of principal and interest is probable. Nonrefundable loan fees and related direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Lease Financing. The Company provides indirect financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the lease property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans. We account for loans under ASC 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually; obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods. Loans Held for Sale Loans held for sale consist of residential and commercial mortgage loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in commercial FHA revenue and residential mortgage banking revenue on the consolidated statements of income. Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 22 in the consolidated financial statements for additional information on the mortgage repurchase reserve. Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income. Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 30th as of the date to perform the annual impairment test. Refer to Note 8 in the consolidated financial statements for additional information on the annual impairment test results. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value. Mortgage Servicing Rights The Company sells residential and commercial mortgage loans in the secondary market and typically retains the right to service the loans sold. Upon sale, a mortgage servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. Mortgage servicing rights, when purchased, are initially recorded at fair value. As the Company has not elected to subsequently measure either of its classes of servicing assets, residential or commercial, under the fair value measurement method, the Company follows the amortization method. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The Company periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on the fair value of net servicing cash flows at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans. 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 determined based on current market conditions. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other‑than‑temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write‑down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write‑down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. We recognize revenue from servicing residential and commercial mortgages as earned based on the specific contractual terms. This revenue, along with 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 Held for Sale Mortgage servicing rights held for sale consist of residential mortgage servicing rights that management has committed to a plan to sell and has the ability to sell them to a buyer in their present condition. Mortgage servicing rights held for sale are carried at the lower of their carrying value or fair value less estimated costs to sell. Decreases in the valuation of mortgage servicing rights held for sale are included in loss on mortgage servicing rights held for sale in the consolidated statements of income. Cash Surrender Value of Life Insurance Policies We have purchased life insurance policies on the lives of certain officers and key employees and are the owner and beneficiary of the policies. These policies provide an efficient form of funding for long‑term retirement and other employee benefits costs. These policies are recorded as cash surrender value of life insurance policies in the consolidated balance sheets at each policy’s respective cash surrender value, with changes in value recorded in noninterest income in the consolidated statements of income. Derivative Financial Instruments All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. On the date the derivative contract is entered into, the derivative is designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability “cash flow” hedge. Changes in the fair value of a derivative that is highly effective as—and that is designated and qualifies as—a cash flow hedge are recorded in accumulated other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable‑rate asset or liability are recorded in earnings). We formally document all relationships between hedging instruments and hedged items, as well as the risk‑management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, hedge accounting is prospectively discontinued, as discussed below. Hedge accounting is prospectively discontinued when (a) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (b) the derivative expires or is sold, terminated, or exercised; (c) the derivative is no longer designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the consolidated balance sheet at its fair value, and gains and losses that were in accumulated other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the consolidated balance sheet, with subsequent changes in its fair value recognized in current‑period earnings. The Company also enters into interest rate lock commitments, which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Interest rate lock commitments for mortgage loans that will be held for resale are carried at fair value on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. Forward loan sales commitments that meet the definition of a derivative are recorded at fair value in the consolidated balance sheet with changes in fair value reflected in commercial FHA and residential mortgage banking income. Credit‑Related Financial Instruments In the ordinary course of business, the Company has entered into credit‑related financial instruments consisting of commitments to extend credit, commercial letters of credit and standby letters of credit. The notional amount of these commitments is not reflected in the consolidated financial statements until they are funded. A liability for losses related to unfunded commitments is maintained by the Company at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the liability is based on an evaluation of the unfunded credit facilities, including an assessment of historical commitment utilization experience, credit risk grading and historical loss rates. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of the Company’s allowance for loan losses, as discussed above. Net adjustments to the liability for unfunded commitments are included in other noninterest expense in the consolidated statements of income. The liability for unfunded commitments totaled $670,000 and $302,000 at December 31, 2017 and 2016, respectively. Income Taxes We file consolidated federal and state income tax returns, with each organization computing its taxes on a separate return basis. The provision for income taxes is based on income as reported in the consolidated financial statements. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. The deferred tax assets and liabilities are computed based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely than‑not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. Interest and penalties associated with unrecognized tax benefits are to be classified as additional income taxes in the consolidated statements of income. The Company evaluated its tax positions and concluded that it had taken no uncertain tax positions that require adjustment in the consolidated financial statements. Stock Compensation Plans Compensation cost for share‑based payment awards is based on the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a Black‑Scholes option pricing model. The fair value of restricted stock is determined based on the Company’s current market price on the date of grant. Compensation cost is recognized in the consolidated financial statements on a straight‑line basis over the requisite service period, which is generally defined as the vesting period. Additionally, the Company accounts for forfeitures as they occur. Comprehensive Income Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non‑owner changes in equity. Non‑owner equity changes include unrealized gains and losses on available for sale securities and changes in the fair value of cash flow hedges. These are components of comprehensive income and do not have an impact on the Company’s net income. 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 and common stock warrants using the treasury stock method and convertible preferred stock and convertible debentures using the if‑converted method. Impact of Recently Issued Accounting Standards FASB Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”; FASB ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” – In May 2014, the Financial Accounting Standards Board (the “FASB”) amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. These amendments became effective for the Company on January 1, 2018. The Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. The impact of applying this standard to the Company’s consolidated financial statements was determined to be immaterial since the Company’s revenue recognition pattern for revenue streams within the scope of ASU 2014-09 did not change significantly from current practice. Entities have the option of using either a full retrospective or modified retrospective transition method to adopt ASU 2014-09. We elected to implement this standard using the modified retrospective approach, with the cumulative effect recorded as an adjustment to opening retained earnings at January 1, 2018. 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. The Company continues to evaluate the impact of the disclosure requirements associated with ASU 2014-09 and is finalizing any necessary changes to related disclosures. FASB ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.” – In January 2016, the FASB issued this standard which is intended to improve the recognition and measurement of financial instruments. This standard, among other things: (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-1 became effective for the Company on January 1, 2018. The Company has completed its evaluation of adopting the new guidance on its consolidated financial statements and there is no material impact. The Company is still finalizing changes to the related disclosures. FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. This update is effective for us on January 1, 2019, with early adoption permitted. We have not yet decided whether we will early adopt the new standard. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. The Company has developed a project plan for evaluating the provisions of the new lease standard, but has not yet determined the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the pending adoption of ASU 2016-02 and its impact on the Company’s consolidated financial statements. 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.” 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. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has formed a cross functional committee that has overseen the enhancement of existing technology required to source and model data for the purposes of meeting this standard. The committee is also in the process of selecting a vendor to assist in generating loan level cash flows and disclosures. While the Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, the Company cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the potential impact on the Company’s consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends FASB ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company elected to early adopt the new guidance in the first quarter of 2017. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. FASB ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities” – In March 2017, the FASB issued ASU No. 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the amortization period for premiums on certain callable debt securities to the earliest call date, rather than contractual maturity date as currently required under GAAP. For public business entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted for any organization in any interim period or fiscal year. The Company elected to early adopt the new guidance in the first quarter of 2017. Adoption of the ASU did not have a material impact on the Company’s consolidated financial statements. FASB ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” – In February 2018, ASU 2018-02 was issued following the enactment of the Tax Cuts and Jobs Act, which changed the Company’s federal income tax rate from 35% to 21%. This standard allows an entity to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The standard is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company expects to early adopt this standard in the first quarter of 2018. The resultant reclassification to retained earnings will not be material.

ACQUISITIONS

12 Months Ended

Dec. 31, 2017

ACQUISITIONS

ACQUISITIONS

Note 2 – Acquisitions

Centrue Financial Corporation

On June 9, 2017, the Company completed its acquisition of Centrue and its banking subsidiary, Centrue Bank, which operated 20 full-service banking centers located principally in northern Illinois. In the aggregate, the Company acquired Centrue for approximately $176.6 million, which consisted of approximately $61.0 million in cash and the issuance of 3,219,238 shares of the Company’s common stock, 181 shares of Series G preferred stock and 2,635.5462 shares of Series H preferred stock. This acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. Through December 31, 2017, transaction and integration costs of $16.0 million associated with the acquisition have been expensed as incurred.

Under the acquisition method of accounting, the consideration paid is allocated to net tangible and intangible assets based on current estimated fair values on the date of acquisition. During the fourth quarter of 2017, the Company updated the preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which required a measurement period adjustment of $1.3 million to increase goodwill. Based on management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the consideration paid for the acquisition is allocated as follows (in thousands):


	Centrue
Assets acquired:
Cash and cash equivalents	$	42,461
Investment securities available for sale		149,013
Loans		679,946
Loans held for sale		531
Premises and equipment		17,147
Other real estate owned		4,759
Nonmarketable equity securities		8,168
Accrued interest receivable		2,376
Mortgage servicing rights		1,933
Intangible assets		11,070
Cash surrender value of life insurance policies		36,349
Deferred tax assets, net		34,284
Other assets		2,256
Total assets acquired		990,293
Liabilities assumed:
Deposits		739,867
Short-term borrowings		14,434
FHLB advances and other borrowings		95,332
Trust preferred debentures		7,565
Accrued interest payable		275
Other liabilities		3,600
Total liabilities assumed		861,073
Net assets acquired		129,220
Goodwill		47,359
Total consideration paid	$	176,579

Prior to the end of the one year measurement period for finalizing the consideration paid allocation, if information becomes available which would indicate adjustments are required to the allocation, such adjustments will be included in the allocation in the reporting period in which the adjustment amounts are determined.

Goodwill of $47.4 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Centrue into the Company. The goodwill is assigned as part of the Company’s Banking reporting unit. The portion of the consideration paid allocated to goodwill will not be deductible for tax purposes.

The identifiable assets acquired included the establishment of $11.1 million in core deposit intangibles, which are being amortized on an accelerated basis over an estimated useful life of eight years.

Acquired loan data for Centrue can be found in the table below (in thousands):


					Best Estimate at
					Acquisition Date of
	Fair Value		Gross Contractual		Contractual Cash
	of Acquired Loans		Amounts Receivable		Flows Not Expected
	at Acquisition Date		at Acquisition Date		to be Collected
Acquired receivables subject to ASC 310-30	$	11,428	$	20,476	$	7,180
Acquired receivables not subject to ASC 310-30		668,518		821,338		4,518

The following table provides the unaudited pro forma information for the results of operations for years ended December 31, 2017 and 2016, as if the acquisition had occurred on January 1, 2016 (in thousands, except per share data). The pro forma results combine the historical results of Centrue with the Company’s consolidated statements of income, adjusted for the impact of the application of the acquisition method of accounting including loan discount accretion, intangible assets amortization, and deposit and trust preferred securities premium accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations had the acquisition actually occurred on January 1, 2016. No assumptions have been applied to the pro forma results of operations regarding revenue enhancements, expense efficiencies or asset dispositions. Only the acquisition related expenses that have been incurred as of December 31, 2017 are included in net income in the table below. Acquisition related expenses that were recognized and are included in the pro forma net income for the year ended December 31, 2017 totaled $16.0 million on a pre-tax basis.


	2017		2016
Revenue(1)	$	206,885	$	220,185
Net income		17,290		37,001
Diluted earnings per common share	$	0.87	$	2.09

(1)

Net interest income plus noninterest income

CedarPoint Investment Advisors, Inc.

On March 28, 2017, the Company acquired all of the outstanding capital stock of CedarPoint Investment Advisors, Inc., an SEC registered investment advisory firm, pursuant to an Agreement and Plan of Merger, dated as of March 15, 2017. CedarPoint had approximately $180.0 million of assets under administration. The Company acquired CedarPoint for $3.7 million, which consisted of the issuance of 102,000 shares of the Company’s common stock and an accrual in other liabilities of $345,000 for the fair value of 18,000 shares that will be held in a special purpose escrow account (the “escrow shares”) as additional consideration until at least March 31, 2019. Payout of the escrow shares is contingent on CedarPoint reaching certain target revenue levels. Intangible assets recognized as a result of the transaction consisted of approximately $2.4 million in goodwill and $2.0 million in customer relationship intangibles. The customer relationship intangibles are being amortized on a straight-line basis over 12 years.

Acquisition of Wealth Management Assets

On November 10, 2016, the Bank completed its acquisition of approximately $400.0 million in wealth management assets from Sterling National Bank of Yonkers, New York (“Sterling”) for approximately $5.2 million in cash. Intangible assets recognized as a result of the transaction consisted of approximately $2.3 million in goodwill and $2.3 million in customer relationship intangibles. The customer relationship intangibles are being amortized on a straight-line basis over 20 years.

CASH AND DUE FROM BANKS	12 Months Ended
CASH AND DUE FROM BANKS	Dec. 31, 2017
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS	Note 3 – Cash and Due From Banks The Bank is required to maintain cash reserves based on the level of certain of its deposits. This reserve requirement may be met by funds on deposit with the FRB and cash on hand. The required balance at December 31, 2017 and 2016 was $25.0 million and $22.6 million, respectively. The Bank maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Bank has not experienced any losses in such accounts. The Bank believes it is not exposed to any significant credit risk from cash and cash equivalents.

INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2017

INVESTMENT SECURITIES

INVESTMENT SECURITIES

Note 4 – Investment Securities

Investment securities as of December 31, 2017 and 2016 are as follows (in thousands):


	2017
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	28,005	$	—	$	287	$	27,718
Government sponsored entity debt securities		25,445		41		275		25,211
Agency mortgage-backed securities		233,606		882		2,101		232,387
State and municipal securities		99,449		3,632		514		102,567
Corporate securities		58,904		1,087		179		59,812
Equity securities		2,715		140		25		2,830
Total available for sale securities	$	448,124	$	5,782	$	3,381	$	450,525


	2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	75,973	$	—	$	72	$	75,901
Government sponsored entity debt securities		7,653		57		22		7,688
Agency mortgage-backed securities		90,629		373		932		90,070
Non-agency mortgage-backed securities		1		—		—		1
State and municipal securities		25,826		15		567		25,274
Corporate securities		47,443		403		441		47,405
Total available for sale securities	$	247,525	$	848	$	2,034	$	246,339
Held to maturity securities
State and municipal securities	$	78,672	$	3,517	$	237	$	81,952

During 2017, the Company transferred its held to maturity (“HTM”) investment securities portfolio to investment securities available for sale (“AFS”), which had an amortized cost and fair value of $64.5 million and $67.9 million, respectively, resulting in $3.4 million of unrealized gains on investment securities available for sale at time of transfer. As a result of the recent acquisitions discussed in Note 2 to the consolidated financial statements, the Company underwent a capital planning assessment which included transferring all HTM securities to AFS securities.

Unrealized losses and fair values for investment securities as of December 31, 2017 and 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands):


	2017
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	19,758	$	251	$	7,960	$	36	$	27,718	$	287
Government sponsored entity debt securities		24,168		275		—		—		24,168		275
Agency mortgage-backed securities		124,192		1,500		19,530		601		143,722		2,101
State and municipal securities		29,338		331		5,889		183		35,227		514
Corporate securities		5,917		85		3,463		94		9,380		179
Equity securities		2,603		25		—		—		2,603		25
Total available for sale securities	$	205,976	$	2,467	$	36,842	$	914	$	242,818	$	3,381


	2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	75,901	$	72	$	—	$	—	$	75,901	$	72
Government sponsored entity debt securities		4,107		22		—		—		4,107		22
Agency mortgage-backed securities		57,882		930		402		2		58,284		932
State and municipal securities		20,215		567		—		—		20,215		567
Corporate securities		11,111		334		8,312		107		19,423		441
Total available for sale	$	169,216	$	1,925	$	8,714	$	109	$	177,930	$	2,034
Held to maturity securities
State and municipal securities	$	13,991	$	140	$	2,699	$	97	$	16,690	$	237

For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and continued financial market stress, and unrealized losses are considered to be temporary.

We evaluate securities for 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 December 31, 2017 and 2016, 173 and 107 investment securities available for sale, respectively, had unrealized losses with aggregate depreciation of 1.37% and 1.13%, respectively, from their amortized cost basis. At December 31, 2016, 47 investment securities held to maturity had unrealized losses with aggregate depreciation of 1.40% 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; therefore, the Company does not consider these securities to be other than temporarily impaired at December 31, 2017.

During 2017, the Company did not recognize OTTI losses on its investment securities. OTTI losses recognized in 2016 and 2015 were related to covered non-agency mortgage-backed securities which, as noted below, were sold in October 2016.

During 2016, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $824,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income.

During 2015, the Company determined that three covered non‑agency mortgage‑backed securities had OTTI of $461,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income.

The amortized cost and fair value of available-for-sale investment securities at December 31, 2017 are shown by expected maturity in the following table (in thousands). Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized		Fair
	cost		value
Debt securities:
Within one year	$	17,648	$	17,600
After one year through five years		64,534		64,653
After five years through ten years		122,716		126,068
After ten years		240,511		239,374
Equity securities		2,715		2,830
Total available for sale securities	$	448,124	$	450,525

Proceeds from the sale of securities available for sale were $22.6 million, $116.0 million and $62.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. Gross realized gains from the sale of securities available for sale were $242,000, $15.5 million and $368,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Gross realized losses were $20,000, $837,000 and $175,000 for the years ended December 31, 2017, 2016 and 2015, respectively. On October 4, 2016, the Company sold its previously covered non-agency mortgage-backed securities which had a carrying value of $72.1 million. These securities were covered under the loss-sharing agreement we entered into with the FDIC in connection with our 2009 acquisition. This agreement was terminated on October 3, 2016. As a result of the sale, the Company realized a gain totaling $14.3 million.

LOANS

12 Months Ended

Dec. 31, 2017

LOANS

LOANS

Note 5 – Loans

The following table presents total loans outstanding by portfolio, which includes non-purchased credit impaired loans and purchased credit impaired loans, as of December 31, 2017 and 2016 (in thousands):


	2017						2016
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans (1)		Total		Loans		Loans (1)		Total
Loans:
Commercial	$	553,257	$	2,673	$	555,930	$	454,310	$	3,517	$	457,827
Commercial real estate		1,427,076		12,935		1,440,011		963,895		5,720		969,615
Construction and land development		199,853		734		200,587		165,175		12,150		177,325
Total commercial loans		2,180,186		16,342		2,196,528		1,583,380		21,387		1,604,767
Residential real estate		447,602		5,950		453,552		247,156		6,557		253,713
Consumer		371,286		169		371,455		269,705		312		270,017
Lease financing		205,143		—		205,143		191,479		—		191,479
Total loans	$	3,204,217	$	22,461	$	3,226,678	$	2,291,720	$	28,256	$	2,319,976

(1)

The unpaid principal balance for PCI loans totaled $32.8 million and $34.6 million as of December 31, 2017 and 2016, respectively.

Total loans include net deferred loan fees of $10.1 million and $3.1 million at December 31, 2017 and 2016, respectively, and unearned discounts of $20.7 million within the lease financing portfolio at both December 31, 2017 and 2016.

At December 31, 2017 and 2016, the Company had commercial and residential loans held for sale, that were originated with the intent to sell, totaling $50.1 million and $70.6 million, respectively. During the years ended December 31, 2017 and 2016, the Company sold commercial and residential real estate loans with proceeds totaling $815.5 million and $1.18 billion, respectively.

The Company monitors and assesses the credit risk of its loan portfolio using the classes set forth below. These classes also represent the segments by which the Company monitors the performance of its loan portfolio and estimates its allowance for loan losses.

Commercial—Loans to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, and other sources of repayment.

Commercial real estate—Loans secured by real estate occupied by the borrower for ongoing operations, including loans to borrowers engaged in agricultural production, and non-owner occupied real estate leased to one or more tenants, including commercial office, industrial, special purpose, retail and multi-family residential real estate loans.

Construction and land development—Secured loans for the construction of business and residential properties. Real estate construction loans often convert to a real estate commercial loan at the completion of the construction period. Secured development loans are made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Interest reserves may be established on real estate construction loans.

Residential real estate—Loans secured by residential properties that generally do not qualify for secondary market sale; however, the risk to return and/or overall relationship are considered acceptable to the Company. This category also includes loans whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan.

Consumer—Loans to consumers primarily for the purpose of home improvements, acquiring automobiles, recreational vehicles and boats. Consumer loans consist of relatively small amounts that are spread across many individual borrowers.

Lease financing—Indirect financing leases to small businesses for purchases of business equipment. All indirect financing leases require monthly payments, and the weighted average maturity of our leases is less than four years.

Commercial, commercial real estate, and construction and land development loans are collectively referred to as the Company’s commercial loan portfolio, while residential real estate and consumer loans and lease financing receivables are collectively referred to as the Company’s other loan portfolio.

We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon normal terms, including collateralization and interest rates prevailing at the time, and did not involve more than the normal risk of repayment by the borrower. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates totaled $22.4 million and $26.5 million at December 31, 2017 and 2016, respectively. During 2017 and 2016, there were $4.0 million and $16.1 million, respectively, of new loans and other additions, while repayments and other reductions totaled $8.1 million and $28.8 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, based in Denver, 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.

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.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the other loan portfolio, and therefore, are subject to more intensive monitoring. 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 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. A summary of the Company’s loan grades (or, characteristics of the loans with each grade) is as follows:

Risk Grades 1‑6 (Acceptable Credit Quality)—All loans in Risk Grades 1 ‑ 6 are considered to be acceptable credit risks by the Company and are grouped for purposes of financial reporting. The six grades essentially represent a ranking of loans that are all viewed to be of acceptable credit quality, taking into consideration the various factors mentioned above, but with varying degrees of financial strength, debt coverage, management and factors that could impact credit quality. Business credits within Risk Grades 1 ‑ 6 range from Risk Grade 1: Excellent (factors include: excellent business credit; excellent debt capacity and coverage; outstanding management; strong guarantors; superior liquidity and net worth; favorable loan‑to‑value ratios; debt secured by cash or equivalents, or backed by the full faith and credit of the U.S. Government) to Risk Grade 6: Marginal (factors include: acceptable business credit, but with added risk due to specific industry or internal situations; uncertainty associated with performance or repayment ability).

Risk Grade 7 (Special Mention)—A business credit that is not acceptable within the Company’s loan origination criteria; cash flow may not be adequate or is continually inconsistent to service current debt; financial condition has deteriorated as company trends/management have become inconsistent; the company is slow in furnishing quality financial information; working capital needs of the company are reliant on short‑term borrowings; personal guarantees are weak and/or with little or no liquidity; the net worth of the company has deteriorated after recent or continued losses; the loan has potential weaknesses that require the Company’s close attention; payment delinquencies becoming more serious; if left uncorrected, these potential weaknesses may, at some future date, result in deterioration of repayment prospects.

Risk Grade 8 (Substandard)—A business credit that is inadequately protected by the current financial net worth and paying capacity of the obligor or of the collateral pledged, if any; management has deteriorated or has become non‑existent; quality financial information is unattainable; a high level of maintenance is required by the Company; cash flow can no longer support debt requirements; loan payments are continually and/or severely delinquent; negative net worth; personal guaranty has become insignificant; a credit that has a well‑defined weakness or weaknesses that jeopardize the liquidation of the debt. The Company still expects a full recovery of all contractual principal and interest payments; however, a possibility exists that the Company will sustain some loss if deficiencies are not corrected.

Risk Grade 9 (Substandard‑Nonaccrual)—A business credit accounted for on a nonaccrual basis that has all the weaknesses inherent in a loan classified as Risk Grade 8 with the added characteristic that the weaknesses are so pronounced that, on the basis of current financial information, conditions, and values, collection in full is highly questionable; a partial loss is possible and interest is no longer being accrued. This loan meets the definition of an impaired loan. The risk of loss requires analysis to determine whether a valuation allowance needs to be established.

Risk Grade 10 (Doubtful)—A business credit that has all the weaknesses inherent in a loan classified as Risk Grade 8 and interest is no longer being accrued, but additional deficiencies make it highly probable that liquidation will not satisfy the majority of the obligation; the primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayment; the possibility of loss is likely, but current pending factors could strengthen the credit. This loan meets the definition of an impaired loan. A loan charge‑off is recorded when management deems an amount uncollectible; however, the Company will establish a valuation allowance for probable losses, if required.

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 are small loans that are monitored by aging status and payment activity.

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2017 and 2016 (in thousands):


	2017								2016
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	510,928	$	1,384,630	$	191,872	$	2,087,430	$	426,560	$	925,244	$	159,702	$	1,511,506
Special mention		12,290		11,497		—		23,787		10,930		8,735		—		19,665
Substandard		27,718		14,695		—		42,413		12,649		21,178		450		34,277
Substandard – nonaccrual		1,266		12,482		785		14,533		3,559		7,145		21		10,725
Doubtful		—		—		—		—		—		—		—		—
Not graded		1,055		3,772		7,196		12,023		612		1,593		5,002		7,207
Total (excluding PCI)	$	553,257	$	1,427,076	$	199,853	$	2,180,186	$	454,310	$	963,895	$	165,175	$	1,583,380

The Company evaluates the credit quality of its other loans based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, any loan 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 loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of December 31, 2017 and 2016 (in thousands):


	2017								2016
	Residential				Lease				Residential				Lease
	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	441,418	$	370,999	$	203,797	$	1,016,214	$	242,127	$	269,492	$	190,148	$	701,767
Impaired		6,184		287		1,346		7,817		5,029		213		1,331		6,573
Total (excluding PCI)	$	447,602	$	371,286	$	205,143	$	1,024,031	$	247,156	$	269,705	$	191,479	$	708,340

Impaired Loans

Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest and loans modified under troubled debt restructurings. Impaired loans at December 31, 2017 and 2016 do not include $22.5 million and $28.3 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.

A summary of impaired loans (excluding PCI loans) as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Nonaccrual loans:
Commercial	$	1,266	$	3,559
Commercial real estate		12,482		7,145
Construction and land development		785		21
Residential real estate		5,204		4,629
Consumer		234		187
Lease financing		1,346		1,330
Total nonaccrual loans		21,317		16,871
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		2,538		2,378
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		51		—
Consumer		53		26
Lease financing		—		1
Total accruing loans contractually past due 90 days or more as to interest or principal payments		2,642		2,405
Loans modified under troubled debt restructurings and still accruing:
Commercial		299		611
Commercial real estate		1,515		11,253
Construction and land development		58		63
Residential real estate		929		400
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings and still accruing		2,801		12,327
Total impaired loans (excluding PCI)	$	26,760	$	31,603

There was no interest income recognized on nonaccrual loans during 2017, 2016 and 2015 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 $860,000, $718,000 and $992,000 in 2017, 2016 and 2015, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $85,000, $339,000 and $267,000 in 2017, 2016 and 2015, respectively.

The following table presents impaired loans (excluding PCI loans) by portfolio and related valuation allowance, as of December 31, 2017 and 2016 (in thousands):


	2017						2016
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	3,237	$	3,297	$	526	$	3,877	$	3,888	$	882
Commercial real estate		2,297		3,508		329		2,142		2,331		309
Construction and land development		103		102		10		84		84		8
Residential real estate		4,028		4,705		566		3,735		4,404		604
Consumer		266		279		29		213		190		23
Lease financing		1,064		1,064		345		1,331		1,331		356
Total impaired loans with a valuation allowance		10,995		12,955		1,805		11,382		12,228		2,182
Impaired loans with no related valuation allowance:
Commercial		866		5,782		—		2,671		7,567		—
Commercial real estate		11,700		17,359		—		16,256		17,058		—
Construction and land development		740		780		—		—		—		—
Residential real estate		2,156		2,380		—		1,294		1,462		—
Consumer		21		21		—		—		26		—
Lease financing		282		282		—		—		—		—
Total impaired loans with no related valuation allowance		15,765		26,604		—		20,221		26,113		—
Total impaired loans:
Commercial		4,103		9,079		526		6,548		11,455		882
Commercial real estate		13,997		20,867		329		18,398		19,389		309
Construction and land development		843		882		10		84		84		8
Residential real estate		6,184		7,085		566		5,029		5,866		604
Consumer		287		300		29		213		216		23
Lease financing		1,346		1,346		345		1,331		1,331		356
Total impaired loans (excluding PCI)	$	26,760	$	39,559	$	1,805	$	31,603	$	38,341	$	2,182

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 was $12.8 million and $6.7 million at December 31, 2017 and 2016, respectively.

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the years ended December 31, 2017 and 2016 are included in the table below (in thousands):


	2017				2016				2015
			Interest Income				Interest Income				Interest Income
	Average		Recognized		Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	2,969	$	15	$	3,974	$	15	$	7,088	$	—
Commercial real estate		5,408		70		2,379		306		9,225		267
Construction and land development		83		4		87		7		—		—
Residential real estate		3,854		38		3,782		30		3,231		16
Consumer		299		—		221		—		52		—
Lease financing		1,064		—		1,331		—		398		—
Total impaired loans with a valuation allowance		13,677		127		11,774		358		19,994		283
Impaired loans with no related valuation allowance:
Commercial		2,369		—		5,604		1		781		—
Commercial real estate		16,822		—		16,847		17		4,599		—
Construction and land development		815		—		—		—		—		—
Residential real estate		2,055		3		1,179		2		954		2
Consumer		13		—		26		—		—		—
Lease financing		282		—		—		—		—		—
Total impaired loans with no related valuation allowance		22,356		3		23,656		20		6,334		2
Total impaired loans:
Commercial		5,338		15		9,578		16		7,869		—
Commercial real estate		22,230		70		19,226		323		13,824		267
Construction and land development		898		4		87		7		—		—
Residential real estate		5,909		41		4,961		32		4,185		18
Consumer		312		—		247		—		52		—
Lease financing		1,346		—		1,331		—		398		—
Total impaired loans (excluding PCI)	$	36,033	$	130	$	35,430	$	378	$	26,328	$	285

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2017 (in thousands):


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	3,282	$	177	$	2,538	$	1,266	$	7,263	$	545,994	$	553,257
Commercial real estate		3,116		630		—		12,482		16,228		1,410,848		1,427,076
Construction and land development		1,953		—		—		785		2,738		197,115		199,853
Residential real estate		897		632		51		5,204		6,784		440,818		447,602
Consumer		2,824		1,502		53		234		4,613		366,673		371,286
Lease financing		392		—		—		1,346		1,738		203,405		205,143
Total (excluding PCI)	$	12,464	$	2,941	$	2,642	$	21,317	$	39,364	$	3,164,853	$	3,204,217

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2016 (in thousands):


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	3,326	$	138	$	2,378	$	3,559	$	9,401	$	444,909	$	454,310
Commercial real estate		648		787		—		7,145		8,580		955,315		963,895
Construction and land development		—		—		—		21		21		165,154		165,175
Residential real estate		3,472		13		—		4,629		8,114		239,042		247,156
Consumer		1,701		588		26		187		2,502		267,203		269,705
Lease financing		94		—		1		1,330		1,425		190,054		191,479
Total (excluding PCI)	$	9,241	$	1,526	$	2,405	$	16,871	$	30,043	$	2,261,677	$	2,291,720

Troubled Debt Restructurings

A loan is categorized as a troubled debt restructuring (“TDR”) if a concession is granted to provide for a reduction of either interest or principal due to deterioration in the financial condition of the borrower. TDRs can take the form of a reduction of the stated interest rate, splitting a loan into separate loans with market terms on one loan and concessionary terms on the other loans, receipts of assets from a debtor in partial or full satisfaction of a loan, the extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk, the reduction of the face amount or maturity of the debt as stated in the instrument or other agreement, the reduction of accrued interest, the release of a personal guarantee in a bankruptcy situation or any other concessionary type of renegotiated debt. Loans are not classified as TDRs when the modification is short-term or results in only an insignificant delay or shortfall in the payments to be received.

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 $240,000 and $203,000 as of December 31, 2017 and 2016, respectively. The Company had no unfunded commitments in connection with TDRs at December 31, 2017 and 2016.

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 December 31, 2017 and 2016 (in thousands):


	2017						2016
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	299	$	—	$	299	$	611	$	—	$	611
Commercial real estate		1,515		9,915		11,430		11,253		5,098		16,351
Construction and land development		58		—		58		63		—		63
Residential real estate		929		282		1,211		400		527		927
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	2,801	$	10,197	$	12,998	$	12,327	$	5,625	$	17,952

(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 year ended December 31, 2017 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2017 (dollars in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		1		1		—		4		—		—		6
Pre-modification outstanding balance	$	362	$	323	$	—	$	528	$	—	$	—	$	1,213
Post-modification outstanding balance		299		323		—		508		—		—		1,130

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

The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2016 (dollars in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		3		2		—		3		—		—		8
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	206	$	—	$	—	$	11,098
Post-modification outstanding balance		647		10,139		—		206		—		—		10,992

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	28	$	—	$	—	$	—	$	—	$	28

The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2015 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2015 (dollars in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		—		1		—		—		—		—		1
Pre-modification outstanding balance	$	—	$	58	$	—	$	—	$	—	$	—	$	58
Post-modification outstanding balance		—		58		—		—		—		—		58

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	54	$	—	$	—	$	—	$	—	$	54

Purchased Credit Impaired Loans

Purchased loans acquired in a business combination, including loans purchased in our FDIC-assisted transactions, are recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan losses. PCI loans are purchased loans that have evidence of credit deterioration since origination, and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. Evidence of credit quality deterioration as of the purchase date may include factors such as past due and nonaccrual status. The difference between contractually required principal and interest at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in impairment, which is recorded as provision for loan losses in the consolidated statements of income. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges or a reclassification of the difference from non-accretable to accretable with a positive impact on interest income. Further, any excess cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows. Accretion recorded as loan interest income totaled $5.5 million, $8.6 million and $5.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Accretable yield of PCI loans, or income expected to be collected is as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands):



	2017		2016		2015
Balance, beginning of period	$	9,035	$	10,526	$	16,198
New loans purchased – Centrue acquisition		1,929		—		—
Accretion		(5,546)		(8,579)		(5,676)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		120		915		—
Reclassification from non-accretable		194		6,173		4
Balance, end of period	$	5,732	$	9,035	$	10,526

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 may not be adequately maintained by the borrower.

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

Changes in the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):


	2017						2016						2015
	Non-PCI		PCI				Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total		Loans		Loans		Total
Balance, beginning of period	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300
Provision for loan losses		9,295		261		9,556		6,425		(834)		5,591		11,061		66		11,127
Loan charge-offs		(9,822)		—		(9,822)		(7,668)		(68)		(7,736)		(9,565)		(92)		(9,657)
Loan recoveries		1,685		150		1,835		894		125		1,019		2,094		124		2,218
Net loan (charge-offs) recoveries		(8,137)		150		(7,987)		(6,774)		57		(6,717)		(7,471)		32		(7,439)
Balance, end of period	$	14,902	$	1,529	$	16,431	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988

In 2017, the Company recorded $9.8 million of non-PCI loan charge-offs, which included a $4.6 million charge-off on a nonperforming commercial real estate loan to one borrower and a $1.2 million charge-off on nonperforming commercial loans related to a single credit relationship as a result of the deterioration in the borrower’s collateral position on the respective loans. In 2016, the Company recorded $7.7 million of non-PCI loan charge-offs, which included a $1.6 million charge-off on a nonperforming commercial loan to one borrower, a $1.4 million charge-off on a nonperforming commercial loan to one borrower and a $530,000 charge-off on nonperforming commercial loans related to a single credit relationship as a result of the deterioration in the borrower’s collateral position on the respective loans. In 2015, the Company recorded $9.6 million of PCI loan charge-offs, which included a $7.5 million charge-off on a group of nonperforming loans to on borrower due to deterioration in the borrower’s collateral position on these loans.

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the year ended December 31, 2017 and provides details regarding the balance in the allowance for loan losses and the recorded investment in loans as of December 31, 2017 by impairment evaluation method (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2017:
Beginning balance	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Provision for loan losses		(118)		7,879		110		1		954		730		9,556
Charge-offs		(737)		(6,552)		—		(698)		(794)		(1,041)		(9,822)
Recoveries		191		492		63		518		254		317		1,835
Ending balance	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Allowance for loan losses at December 31, 2017 attributable to:
Loans individually evaluated for impairment	$	221	$	281	$	5	$	302	$	—	$	261	$	1,070
Loans collectively evaluated for impairment		305		48		5		264		29		84		735
Non-impaired loans collectively evaluated for impairment		4,230		4,379		504		1,644		1,166		1,174		13,097
Loans acquired with deteriorated credit quality (1)		500		336		4		540		149		—		1,529
Total allowance for loan losses	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Recorded investment (loan balance) at December 31, 2017:
Impaired loans individually evaluated for impairment	$	1,285	$	13,554	$	797	$	3,700	$	4	$	568	$	19,908
Impaired loans collectively evaluated for impairment		2,818		443		46		2,484		283		778		6,852
Non-impaired loans collectively evaluated for impairment		549,154		1,413,079		199,010		441,418		370,999		203,797		3,177,457
Loans acquired with deteriorated credit quality (1)		2,673		12,935		734		5,950		169		—		22,461
Total recorded investment (loan balance)	$	555,930	$	1,440,011	$	200,587	$	453,552	$	371,455	$	205,143	$	3,226,678

(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.

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the year ended December 31, 2016 and provides details regarding the balance in the allowance for loan losses and the recorded investment in loans as of December 31, 2016 by impairment evaluation method (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2016:
Beginning balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Provision for loan losses		2,992		(1,041)		(183)		1,601		382		1,840		5,591
Charge-offs		(4,252)		(1,177)		(1)		(966)		(301)		(1,039)		(7,736)
Recoveries		263		264		94		174		100		124		1,019
Ending balance	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Allowance for loan losses at December 31, 2016 attributable to:
Loans individually evaluated for impairment	$	878	$	296	$	6	$	379	$	—	$	285	$	1,844
Loans collectively evaluated for impairment		4		13		2		225		23		71		338
Non-impaired loans collectively evaluated for impairment		4,539		2,684		337		1,968		877		1,157		11,562
Loans acquired with deteriorated credit quality (1)		499		232		—		357		30		—		1,118
Total allowance for loan losses	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Recorded investment (loan balance) at December 31, 2016:
Impaired loans individually evaluated for impairment	$	6,504	$	18,275	$	63	$	2,920	$	—	$	670	$	28,432
Impaired loans collectively evaluated for impairment		44		123		21		2,109		213		661		3,171
Non-impaired loans collectively evaluated for impairment		447,762		945,497		165,091		242,127		269,492		190,148		2,260,117
Loans acquired with deteriorated credit quality (1)		3,517		5,720		12,150		6,557		312		—		28,256
Total recorded investment (loan balance)	$	457,827	$	969,615	$	177,325	$	253,713	$	270,017	$	191,479	$	2,319,976

(1)

PREMISES AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2017

PREMISES AND EQUIPMENT

PREMISES AND EQUIPMENT, NET

Note 6 – Premises and Equipment, Net

A summary of premises and equipment as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Land	$	16,109	$	14,314
Buildings and improvements		63,837		56,766
Furniture and equipment		25,843		21,419
Total		105,789		92,499
Accumulated depreciation		(29,627)		(25,807)
Premises and equipment, net	$	76,162	$	66,692

Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $5.0 million, $5.1 million, and $5.1 million, respectively.

In November 2016, the Company announced a branch network optimization plan that led to the closure of seven banking offices in the first quarter of 2017. As a result of this plan, the Company recorded $1.9 million of asset impairment on existing banking facilities for the year ended December 31, 2016, which was recognized in other expense in the consolidated statements of income.

In 2017, the Company announced the closure of six additional banking offices. Consequently, the Company recorded $2.0 million of asset impairment in 2017 on the banking facilities to be closed, which was recognized in other expense in the consolidated statements of income. At December 31, 2017 and 2016, the Company had $3.4 million and $1.6 million of branch related assets classified in other assets as held for sale.

MORTGAGE SERVICING RIGHTS

12 Months Ended

Dec. 31, 2017

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

Note 7 – Mortgage Servicing Rights

At December 31, 2017 and 2016, the Company serviced mortgage loans for others totaling $5.97 billion and $5.64 billion, respectively. A summary of mortgage loans serviced for others as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Commercial FHA mortgage loans	$	3,976,795	$	3,811,066
Residential mortgage loans		1,989,785		1,833,443
Total loans serviced for others	$	5,966,580	$	5,644,509

Changes in our mortgage servicing rights were as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands):




	2017		2016		2015
Mortgage servicing rights:
Balance, beginning of period	$	71,710	$	67,218	$	62,900
Servicing rights acquired – residential mortgage loans		1,933		—		—
Servicing rights transferred to held for sale - residential mortgage loans		(16,229)		—		—
Servicing rights capitalized – commercial FHA mortgage loans		6,287		6,805		4,318
Servicing rights capitalized – residential mortgage loans		1,789		3,828		5,015
Amortization – commercial FHA mortgage loans		(2,579)		(2,388)		(2,272)
Amortization – residential mortgage loans		(2,528)		(3,753)		(2,743)
Balance, end of period		60,383		71,710		67,218
Valuation allowances:
Balance, beginning of period		3,702		567		119
Additions		2,436		6,962		1,630
Reductions		(112)		(3,827)		(1,182)
Servicing rights transferred to held for sale - residential mortgage loans		(1,995)		—		—
Balance, end of period		4,031		3,702		567
Mortgage servicing rights, net	$	56,352	$	68,008	$	66,651
Fair value:
At beginning of period	$	68,008	$	66,700	$	62,781
At end of period	$	56,352	$	68,008	$	66,700

During 2017, the Company transferred $14.2 million of residential mortgage servicing rights, net of valuation allowance, to mortgage servicing rights held for sale. The Company had committed to a plan to sell certain residential mortgage servicing rights as of December 31, 2017 and the sale was completed on January 2, 2018. During the year ended December 31, 2017, the Company recognized a $4.1 million loss on mortgage servicing rights held for sale to reflect them at the lower of their carrying value or fair value less estimated costs to sell. As a result of recognizing this loss, mortgage servicing rights held for sale had a net carrying value of $10.2 million at December 31, 2017.

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 and residential portfolios, used in the valuation of servicing rights at December 31, 2017 and 2016. 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 portfolios. 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
	Fee		Rate		Maturity	Rate		Cost		Rate
December 31, 2017:
Commercial FHA mortgage loans	0.12	%	3.67	%	30.3	8.27	%	$	1,000	10 - 14	%
Residential mortgage loans	0.26	%	3.93	%	23.2	11.52	%	$	71	8 - 13	%

December 31, 2016:
Commercial FHA mortgage loans	0.13	%	3.72	%	30.2	8.31	%	$	1,000	10 - 13	%
Residential mortgage loans	0.26	%	3.89	%	24.2	9.72	%	$	60	9 - 11	%

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, costs to service, contractual servicing fee income, ancillary income, late fees, replacement reserves and other economic factors that are determined based on current market conditions.

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Note 8 – Goodwill and Intangible Assets

At December 31, 2017 and 2016, goodwill totaled $98.6 million and $48.8 million, respectively, reflecting an increase of approximately $47.4 million as a result of the Centrue acquisition on June 9, 2017 and $2.4 million as a result of the CedarPoint acquisition on March 28, 2017, as further discussed in Note 2 to the consolidated financial statements. Goodwill represents the amount by which the cost of an acquisition exceeded fair value of net assets acquired in connection with the purchase of another financial institution. Goodwill is tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company performed its most recent annual goodwill impairment test as of September 30, 2017 and concluded that no impairment existed as of that date.

The following table summarizes the carrying amount of goodwill by segment at December 31, 2017 and 2016 (in thousands).


	2017		2016
Banking	$	82,986	$	35,627
Commercial FHA Origination and Servicing		10,892		10,892
Other		4,746		2,317
Total goodwill	$	98,624	$	48,836

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of December 31, 2017 and 2016 are summarized as follows (in thousands):


	2017						2016
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	31,612	$	(18,943)	$	12,669	$	20,542	$	(16,181)	$	4,361
Customer relationship intangibles		7,471		(3,208)		4,263		5,471		(2,645)		2,826
Total intangible assets	$	39,083	$	(22,151)	$	16,932	$	26,013	$	(18,826)	$	7,187

In conjunction with the acquisition of Centrue on June 9, 2017, we recorded $11.1 million of core deposit intangibles, which are being amortized on an accelerated basis over an estimated useful life of eight years, as further discussed in Note 2 to the consolidated financial statements.

In conjunction with the acquisition of CedarPoint on March 28, 2017, we recorded $2.0 million of customer relationship intangibles, which are being amortized on a straight-line basis over 12 years, as further discussed in Note 2 to the consolidated financial statements.

Amortization of intangible assets was $3.3 million, $2.1 million and $2.5 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Estimated amortization expense for future years is as follows (in thousands):


	Amount
Year ending December 31,
2018	$	3,694
2019		3,053
2020		2,429
2021		1,971
2022		1,566
Thereafter		4,219
Total	$	16,932

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2017

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Note 9 – 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 agreements.

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

Derivative instruments issued by the Company consist of interest rate lock commitments to originate fixed-rate loans to be sold. Commitments to originate fixed-rate loans consist of commercial and residential real estate loans. 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 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 December 31, 2017 and 2016 (in thousands):


	Notional Amount				Fair Value Gain
	2017		2016		2017		2016
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	345,152	$	264,359	$	6,331	$	6,253
Forward commitments to sell mortgage-backed securities		372,824		301,788		31		125
Total	$	717,976	$	566,147	$	6,362	$	6,378

Net losses recognized on derivative instruments were $16,000 for the year ended December 31, 2017. Net gains recognized on derivative instruments were $351,000 and $6.0 million for the years ended December 31, 2016 and 2015, respectively. Net gains or losses on derivative instruments were recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Interest Rate Swap Contracts

The Company entered into derivative instruments related to 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 $10.0 million at December 31, 2017. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $17,000 at December 31, 2017, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

DEPOSITS

12 Months Ended

Dec. 31, 2017

DEPOSITS

DEPOSITS

Note 10 – Deposits

The following table summarizes the classification of deposits as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Noninterest-bearing demand	$	724,443	$	562,333
Interest-bearing:
Checking		785,934		656,248
Money market		646,426		399,851
Savings		281,212		166,910
Time		693,074		619,024
Total deposits	$	3,131,089	$	2,404,366

Included in time deposits are time certificates of $250,000 or more and brokered certificates of deposits of $69.9 million and $190.3 million as of December 31, 2017, respectively, and $52.9 million and $218.7 million as of December 31, 2016, respectively.

Investment securities with a carrying amount of $116.0 million and $75.3 million were pledged for public deposits at December 31, 2017 and 2016, respectively. Standby letters of credit issued by the FHLB on our behalf of $120.0 million and $68.0 million were pledged for public deposits at December 31, 2017 and 2016, respectively.

As of December 31, 2017, the scheduled maturities of time deposits are as follows (in thousands):


	Amount
Year ending December 31,
2018	$	414,739
2019		234,347
2020		25,792
2021		9,753
2022		8,442
Thereafter		1
Total	$	693,074

SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2017

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

Note 11 – Short-Term Borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2017 and 2016 (in thousands):


	Repurchase Agreements
	2017			2016
Outstanding at period-end	$	156,126		$	131,557
Average amount outstanding		163,461			130,228
Maximum amount outstanding at any month end		196,278			168,369
Weighted average interest rate:
During period		0.23	%		0.23	%
End of period		0.28	%		0.21	%

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 $157.2 million and $140.0 million at December 31, 2017 and 2016, respectively, were pledged for securities sold under agreements to repurchase.

The Company had lines of credit of $32.5 million and $35.1 million at December 31, 2017 and 2016, 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 $36.5 million and $43.3 million at December 31, 2017 and 2016, respectively. There were no outstanding borrowings at December 31, 2017 and 2016.

At December 31, 2017, the Company had federal funds lines of credit totaling $55.0 million. These lines of credit were unused at December 31, 2017.

FHLB ADVANCES AND OTHER BORROWINGS

12 Months Ended

Dec. 31, 2017

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

Note 12 – FHLB Advances and Other Borrowings

The following table summarizes our FHLB advances and other borrowings as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Midland States Bancorp, Inc.
Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 3.63% at December 31, 2017 – maturing through May 25, 2020	$	37,113	$	—
Series G redeemable preferred stock - 181 shares at $1,000 per share		181		—
Midland States Bank
FHLB advances – fixed rate, fixed term of $145.0 million and $112.5 million, at rates averaging 1.35% and 1.00% at December 31, 2017 and 2016, respectively – maturing through June 2021, and putable fixed rate of $305.0 million and $125.0 million at rates averaging 1.29% and 0.79% at December 31, 2017 and 2016, respectively, – maturing through December 2024 with call provisions through December 2020		450,137		237,500
FHLB advances – variable rate, fixed term, at rates averaging 1.20% at December 31, 2017 – maturing through March 2018		9,000		—
Other		5		18
Total FHLB advances and other borrowings	$	496,436	$	237,518

On May 25, 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 revolving line of credit matures on May 24, 2018 and pays a variable rate of interest equal to one-month LIBOR plus 200 basis points. There were no advances made on the line of credit as of December 31, 2017. The term loan matures on May 25, 2020 and pays a variable rate of interest equal to one-month LIBOR plus 225 basis points. Beginning September 1, 2017, the Company was required to begin making 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 Company’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 December 31, 2017, the Company was in compliance with or has obtained waivers for each of these financial covenants.

In conjunction with the acquisition of Centrue on June 9, 2017, as further discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series B preferred stock was converted into the right to receive a share of a newly created series of Series G preferred stock of the Company, and was recorded at fair value of $181,000 at the time of acquisition.

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 $1.86 billion and $1.18 billion at December 31, 2017 and 2016, respectively.

Payments over the next five years for FHLB advances and other borrowings are as follows (in thousands):


	Amount
2018	$	144,931
2019		15,739
2020		25,747
2021		55,019
2022		150,000
Thereafter		105,000
Total	$	496,436

SUBORDINATED DEBT

12 Months Ended

Dec. 31, 2017

SUBORDINATED DEBT

SUBORDINATED DEBT

Note 13 – Subordinated Debt

The following table summarizes the Company’s subordinated debt as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025	$	39,800	$	39,729
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,805		14,779
Subordinated debt issued October 2017 - fixed interest rate of 6.25% for the first five years through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 maturing October 15, 2027		39,367		—
Total subordinated debt	$	93,972	$	54,508

On October 13, 2017, the Company issued, through a private placement, $40.0 million aggregate principal amount of subordinated debentures with a maturity date of October 15, 2027. The subordinated debentures bear a fixed rate of interest of 6.25% for the first five years, payable semiannually in arrears beginning April 15, 2018, and a floating rate of interest equal to the three-month LIBOR plus 422.9 basis points thereafter, payable quarterly in arrears beginning January 15, 2023. The subordinated debentures will be redeemable by the Company, in whole or in part, on or after October 15, 2022, and are not subject to redemption at the option of the holders. The value of the subordinated debentures was reduced by approximately $0.6 million related to debt issuance costs, which are being amortized on a straight line basis through the maturity of the subordinated debentures. The subordinated debenture issues may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

In June 2015, the Company issued $55.3 million of subordinated debt in a private placement. The transaction was structured in two tranches: (1) $40.3 million, maturing on June 18, 2025 with a redemption option on or after June 18, 2020, with a fixed rate of interest of 6.00% for the first five years, payable semiannually in arrears beginning December 18, 2015, and a floating rate of interest equivalent to the three-month LIBOR plus 435 basis points thereafter, payable quarterly beginning on September 18, 2020; and (2) $15.0 million, maturing on June 18, 2025, with a fixed rate of interest of 6.50%, payable semiannually in arrears beginning December 18, 2015. The value of the subordinated debentures was reduced by $0.9 million with the recording of debt issuance costs associated with the issuance of the subordinated debentures, which are being amortized on a straight line basis through maturity of the subordinated notes. The subordinated debentures may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

TRUST PREFERRED DEBENTURES

12 Months Ended

Dec. 31, 2017

TRUST PREFERRED DEBENTURES

TRUST PREFERRED DEBENTURES

Note 14 – Trust Preferred Debentures

The following table summarizes the Company’s trust preferred debentures as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 4.11% and 3.63% at December 31, 2017 and 2016, respectively – $10,000 maturing April 23, 2034	$	9,960	$	9,957
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 4.23% and 3.74%, at December 31, 2017 and 2016, respectively – $3,000 maturing January 23, 2034		2,058		1,996
Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 3.34% and 2.71% at December 31, 2017 and 2016, respectively – $20,000 maturing December 31, 2036		13,292		13,141
Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.98% and 2.42% at December 31, 2017 and 2016, respectively – $20,000 maturing September 6, 2037		12,464		12,311
Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 4.25% at December 31, 2017 - $10,000 maturing June 17, 2034		7,605		—
Total trust preferred debentures	$	45,379	$	37,405

In conjunction with the acquisition of Centrue on June 9, 2017, as further discussed in Note 2 to the consolidated financial statements, the Company assumed $10.0 million of subordinated debentures that were recorded at a fair value of $7.6 million at the time of acquisition. In April 2004, the Centrue Statutory Trust II (“Centrue Trust II”) issued 10,000 shares of preferred securities with a liquidation amount of $1,000 per preferred security. Centrue issued $10.0 million of subordinated debentures to Centrue Trust II in exchange for ownership of all the common securities of the trust. The Company is not considered the primary beneficiary of Centrue Trust II, therefore, the trust is not consolidated in the Company’s consolidated financial statements, but rather the subordinated debentures are shown as a liability, and the Company’s investment in the common stock of Centrue Trust II of $310,000 is included in other assets.

In conjunction with the acquisition of Love Savings Holding Company (“LSHC”) on December 31, 2014, the Company assumed $40.0 million of subordinated debentures that were recorded at a fair value of $26.1 million at the time of acquisition. On November 30, 2006, the Love Savings/Heartland Capital Trust III (“LSHC Trust III”) issued 20,000 shares of capital securities with a liquidation amount of $1,000 per security. LSHC issued $20.0 million of subordinated debentures to LSHC Trust III in exchange for ownership of all the common securities of the trust. On June 6, 2007, the Love Savings/Heartland Capital Trust IV (“LSHC Trust IV”) issued 20,000 shares of capital securities with a liquidation amount of $1,000 per security. LSHC issued $20.0 million of subordinated debentures to LSHC Trust IV in exchange for ownership of all the common securities of the trust. The Company is not considered the primary beneficiary of LSHC Trust III or LSHC Trust IV, therefore the trusts are not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Company’s investment in the common stock of the trusts was $1.2 million and is included in other assets.

In conjunction with the acquisition of Grant Park Bancshares, Inc. on June 5, 2013, the Company assumed $3.0 million of subordinated debentures that were recorded at a fair value of $1.8 million at the time of acquisition. On December 19, 2003, the Grant Park Statutory Trust I (“Grant Park Trust”) issued 3,000 shares of preferred securities with a liquidation amount of $1,000 per security. Grant Park issued $3.0 million of subordinated debentures to the Grant Park Trust in exchange for ownership of all the common securities of the trust. The Company is not considered the primary beneficiary of the Grant Park Trust, therefore the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Company’s investment in the common stock of the trust was $93,000 and is included in other assets.

On March 26, 2004, Midland States Preferred Securities Trust (“Midland Trust”), a statutory trust under the Delaware Statutory Trust Act, was formed by the Company. The Midland Trust issued a pool of $10.0 million of floating rate Cumulative Trust Preferred Debentures with a liquidation amount of $1,000 per security. The Company issued $10.0 million of subordinated debentures to the Midland Trust in exchange for ownership of all the common securities of the Midland Trust. The Company is not considered the primary beneficiary of this trust; therefore, the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Company’s investment in the common stock of the trust was $310,000 and is included in other assets.

For all of the debentures mentioned above, interest is payable quarterly. The debentures and the common securities issued by each of the trusts are redeemable in whole or in part on dates each quarter at the redemption price plus interest accrued to the redemption date, as specified in the trust indenture document. The debentures are also redeemable in whole or in part from time to time upon the occurrence of “special events” defined within the indenture document. Subject to certain exceptions and limitations, the Company may, from time to time, defer subordinated debenture interest payments, which would result in a deferral of distribution payments on the related debentures, and with certain exceptions, prevent the Company from declaring or paying cash distributions on common stock or debt securities that rank pari passu or junior to the subordinated debenture.

INCOME TAXES

12 Months Ended

Dec. 31, 2017

INCOME TAXES

INCOME TAXES

Note 15 – Income Taxes

The components of income taxes for the years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):


	2017		2016		2015
Federal:
Current	$	(696)	$	1,718	$	3,500
Deferred		11,632		11,381		5,604
State:
Current		(921)		2,630		1,117
Deferred		400		3,160		870
Total income tax expense	$	10,415	$	18,889	$	11,091

The Company’s income tax expense differed from the statutory federal rate of 35% for the years ended December 31, 2017, 2016 and 2015 as follows (in thousands):


	2017		2016		2015
Expected income taxes	$	9,244	$	17,648	$	12,424
Less income tax effect of:
Tax exempt interest		(1,682)		(1,670)		(1,934)
Interest expense disallowance		47		33		29
State tax, net of federal benefit		(110)		3,132		1,292
Increase in cash surrender value of life insurance policies		(969)		(1,007)		(516)
Indemnification income		—		—		(311)
Equity-based compensation benefit		(1,297)		(366)		—
Non-deductible transaction costs		389		—		—
Valuation allowance		(229)		631		—
Effect of federal rate change enacted in 2017		4,540		—		—
Other		482		488		107
Actual income tax expense	$	10,415	$	18,889	$	11,091

Deferred tax assets (liabilities), net in the accompanying consolidated balance sheets as of December 31, 2017 and 2016 include the following amounts of deferred tax assets and liabilities (in thousands):


	2017		2016
Assets:
Allowance for loan losses	$	4,405	$	5,766
Deferred compensation		1,896		2,136
Loans		3,896		1,972
Write-down of other real estate owned		776		70
Tax credits		1,501		3,106
Nonaccrual interest		708		1,007
Unrealized loss on securities		—		387
Intangible assets		—		292
Stock compensation		907		689
Deferred loan fees, net of costs		133		—
Net operating losses		20,097		—
Other, net		763		777
Deferred tax assets		35,082		16,202
Valuation allowance		(409)		(631)
Deferred tax assets, net of valuation allowance		34,673		15,571
Liabilities:
Premises and equipment		1,657		1,268
Unrealized gain on securities		412		—
Mortgage servicing rights		11,424		15,092
Fair value adjustment on trust preferred debentures		4,700		6,023
Federal Home Loan Bank stock dividends		310		227
Deferred loan fees, net of costs		—		136
Intangible assets		2,729		—
Accounting method changes		399		1,156
Prepaid expenses		796		—
Other, net		222		267
Deferred tax liabilities		22,649		24,169
Deferred tax assets (liabilities), net	$	12,024	$	(8,598)

At December 31, 2017 and 2016, the accumulation of prior year’s earnings representing tax bad debt deductions was approximately $3.1 million for both years. If these tax bad debt reserves were charged for losses other than bad debt losses, the Company would be required to recognize taxable income in the amount of the charge. It is not expected that such tax‑restricted retained earnings will be used in a manner that would create federal income tax liabilities.

The Company had $70.1 million of federal net operating loss carryforwards expiring 2021 through 2034, $64.3 million of Illinois post-apportioned net operating loss carryforwards expiring 2022 through 2026, and $70.1 million of Missouri pre-apportioned net operating loss carryforwards expiring 2021 through 2034, at December 31, 2017. The utilization of the federal and Missouri net operating losses are subject to the limitations of IRC Section 382.

The Company has a federal alternative minimum tax credit carryforward of $3.7 million that can be carried forward indefinitely which became a refundable credit with the enactment of the Tax Cuts and Jobs Act on December 22, 2017. As of December 31, 2017 this credit is not reflected in deferred tax assets and is presented in income taxes receivable.

The Company has state tax credit carryforwards of $1.9 million with a five year carryforward period, and expiring between 2018 and 2022. Any amounts that are expected to expire before being fully utilized have been accounted for through a valuation allowance as discussed below.

As a result of the enactment of the Tax Cuts and Jobs Act (“H.R.1”) on December 22, 2017, the Company was required to write down deferred tax assets by $4.5 million. Following the guidance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), the write down of the deferred tax assets was determined using reasonable estimates for certain effects of tax reform and has recorded the amount of the write down as a provisional amount. The Company continues to analyze H.R.1, including the impact on equity investments in partnerships, as well as the acquisition accounting of Centrue Financial Corporation, and expects any refinements to the provisional amounts to be made after the tax returns are complete but no later than December 22, 2018, which is the end of the one year measurement period under SAB 118.

We had no unrecognized tax benefits as of December 31, 2017 and 2016, and did not recognize any increase of unrecognized benefits during 2017 relative to any tax positions taken during the year.

Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to record such accruals in other income or expense; no such accruals existed as of December 31, 2017 and 2016.

Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. All available evidence, both positive and negative, should be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. The Company has concluded, based on all available evidence, a valuation allowance is needed for the Company’s deferred tax asset related to state tax credit carryforwards. A valuation allowance of $409,000 was established for the state tax credit carryforwards. For the Company’s remaining deferred tax assets, based on our taxpaying history and estimates of taxable income over the years in which the items giving rise to the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences.

The Company is subject to U.S. federal income tax as well as income tax of various states. Years that remain open for potential review by the Internal Revenue Service are 2014 through 2016 and for state taxing authorities are 2013 through 2016.

RETIREMENT PLANS	12 Months Ended
RETIREMENT PLANS	Dec. 31, 2017
RETIREMENT PLANS
RETIREMENT PLANS	Note 16 – Retirement Plans We sponsor the Midland States Bank 401(k) Profit Sharing Plan which provides retirement benefits to substantially all of our employees. There were no employer discretionary profit sharing contributions made to the 401(k) plan in 2017, 2016 and 2015. The 401(k) component of the plan allows participants to defer a portion of their compensation ranging from 1% to 100%. Such deferrals accumulate on a tax deferred basis until the employee withdraws the funds. The Company matches 50% of employee contributions up to 6% of their compensation. Total expense recorded for the Company match was $1.2 million, $1.2 million and $1.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. Certain directors and executive officers participate in a deferred compensation arrangement. We match 25% of the amount deferred by directors who defer all of their director fees into a Company stock unit account. At December 31, 2017 and 2016, the accrued liability for these arrangements totaled $3.8 million and $3.1 million, respectively, and was reflected in other liabilities in the consolidated balance sheets. Expense associated with these arrangements was $659,000, $605,000 and $596,000 for the years ended December 31, 2017, 2016 and 2015, respectively. During the years ended December 31, 2017, 2016 and 2015, there were distributions made of $100,000, $126,000 and $56,000, respectively. In November 2015, the Company entered into a supplemental retirement agreement with its Chief Executive Officer (“CEO”). The CEO is eligible to receive supplemental retirement payments in each of 2019, 2020 and 2021 equal to 50%, 40% and 30%, respectively, of his final salary on December 31, 2018 (retirement date). A liability for these benefit payments is being accrued on a present value basis up to his retirement date using applicable risk-free interest rates. The Company expensed $210,000 and $219,000 for the years ended December 31, 2017 and 2016, respectively, for this arrangement. Midland participates in the Pentegra Defined Benefit Plan for Financial Institutions, a noncontributory defined benefit pension plan for certain former employees of Heartland who have met prescribed eligibility requirements. The multiple‑employer plan operates as a single plan under Internal Revenue code 413(c) and, as a result, all of the amounts contributed by the participating institutions are maintained in the aggregate. The plan is funded based on an annual valuation performed by the plan administrator. Benefits under the plan were frozen in 2004. The funded status of the plan (market value of assets divided by funding target) was 122.0% as of July 1, 2017, the latest actuarial valuation date. Future costs for administration, shortfalls in funds to maintain the frozen level of benefit coverage and differences of actuarial assumptions related to the frozen benefits will be expensed as incurred. The minimum required contribution for these costs in 2017 and 2016 was $121,000 and $134,000, respectively.

STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2017

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

Note 17 – Stock Based Compensation

On October 18, 2010, the board of directors approved the Midland States Bancorp, Inc. 2010 Long‑Term Incentive Plan (“2010 Incentive Plan”). The 2010 Incentive Plan was amended and restated effective February 2, 2016, which made available 2,000,000 shares (the initial 1,000,000 of which may be granted as incentive stock options) to be issued to selected employees and directors of, and service providers to, the Company or its subsidiaries. The granting of awards under this plan can be in the form of incentive stock options, non‑qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other awards. The awards are granted by the compensation committee, which is comprised of members of the board of directors. The 2010 Incentive Plan replaced all prior equity incentive plans including the Third Amendment and Restatement of Midland States Bancorp, Inc. 1999 Stock Option Plan and the Omnibus Stock Ownership and Long Term Incentive Plan.

The fair value of each grant is estimated at the grant date using the Black‑Scholes option‑pricing model with the following weighted average assumptions:


	2017		2016		2015
Dividend yield	2.50	%	3.00	%	3.14	%
Expected volatility	16.63		16.98		16.94
Risk free interest rate	2.12		1.64		1.93
Expected life	6.25	years	6.25	years	6.25	years

The summary of our stock option activity during the years ended December 31, 2017 and 2016 is as follows:


	2017					2016
				Weighted					Weighted
		Weighted		average			Weighted		average
		average		remaining			average		remaining
		exercise		contractual			exercise		contractual
	Shares	price		life		Shares	price		life
Options outstanding, beginning of year	1,319,259	$	18.73			1,233,606	$	17.52
Options granted	31,259		32.89			182,118		26.15
Options exercised	(179,760)		16.02			(66,024)		16.01
Options forfeited	(22,221)		26.08			(30,441)		20.15
Options outstanding, end of year	1,148,537	$	19.39	5.8	years	1,319,259	$	18.73	6.3	years
Options exercisable	673,706	$	17.55	4.6	years	729,483	$	16.37	4.6	years
Options vested and expected to vest	1,088,853	$	19.27	5.7	years	1,245,713	$	18.56	6.2	years

The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2017 was $15.0 million and $10.1 million, respectively. As of December 31, 2017, there was $747,000 of total unrecognized compensation cost related to nonvested share‑based compensation arrangements granted under our stock option plans. This cost is expected to be recognized over a period of 2.3 years. The weighted average fair value of options granted during the years ended December 31, 2017, 2016 and 2015 was $4.33, $2.94 and $2.55, respectively.

The total intrinsic value and cash received from options exercised under all share‑based payment arrangements was $2.3 million and $2.9 million, respectively, for the year ended December 31, 2017, $971,000 and $890,000, respectively, for the year ended December 31, 2016, and $299,000 and $558,000, respectively, for the year ended December 31, 2015.

The following table summarizes information about the Company’s nonvested stock option activity for 2017:


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2016	589,776	$	2.73
Granted	31,259		4.33
Vested	(128,530)		2.73
Forfeited	(17,674)		3.05
Nonvested at December 31, 2017	474,831	$	2.83

In 2017 and 2016, the Company granted 70,951 and 63,728 shares of restricted stock awards, respectively. These awards have a vesting period of four years. Compensation expense is recognized over the vesting period of the award based on the fair value of the stock at the date of issue. Also, in 2017 and 2016, the Company granted 12,965 and 7,048 restricted stock unit awards, respectively, that may be settled in cash or stock, at the election of the recipient. These awards have a vesting period of one year and two years, respectively. They are classified as liability awards and measured at each financial reporting date until settlement.

A summary of the activity for restricted stock awards and restricted stock unit awards for the year follows:


		Weighted
		average
	Number	grant date
	outstanding	fair value
Nonvested at December 31, 2016	108,647	$	25.16
Granted during the year	83,916		31.03
Vested during the year	(37,666)		23.29
Forfeited during the year	(5,529)		27.76
Nonvested at December 31, 2017	149,368	$	28.83

As of December 31, 2017, there was $4.0 million of total unrecognized compensation cost related to the nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted average period of 3.0 years.

The weighted average grant date fair value for restricted stock awards was $31.03, $27.38 and $22.95 during the years ended December 31, 2017, 2016 and 2015, respectively.

Compensation cost that has been charged against income for these plans was $1.8 million, $1.1 million and $940,000 for 2017, 2016 and 2015, respectively.

PREFERRED STOCK	12 Months Ended
PREFERRED STOCK	Dec. 31, 2017
PREFERRED STOCK
PREFERRED STOCK	Note 18 – Preferred Stock Series G Preferred Stock In conjunction with the acquisition of Centrue on June 9, 2017, as discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series B preferred stock was converted into the right to receive a share of a newly created series of Series G preferred stock of the Company, which are shown in FHLB advances and other borrowings in Note 12 to the consolidated financial statements. Preferential cumulative cash dividends are payable quarterly at an annual rate of $60.00 per share. Dividends accrue on each share of Series G preferred stock from the date of issuance and from day to day, thereafter, whether or not earned or declared. Fixed Rate Non-Voting Perpetual Non-Cumulative Preferred Stock, Series H In conjunction with the acquisition of Centrue on June 9, 2017, as discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series D preferred stock was converted into the right to receive a share of a newly created series of Series H preferred stock of the Company, and was recorded at fair value of $3.1 million at the time of acquisition. Dividends are payable at a fixed rate of 12.5% per annum, payable quarterly and are non-cumulative. No dividends may be paid on shares of common stock, shares of preferred stock that rank junior to Series H preferred stock (other than dividends payable solely in shares of common stock), or shares of preferred stock that rank on parity with Series H preferred stock, if a dividend is not paid in full on the Series H preferred stock, for a period of three calendar quarters from the date of the missing dividend payment date. The Company has the option to redeem, in whole or in part, the shares of Series H preferred stock at any time after July 29, 2019. The per share price payable by the Company for such shares of Series H preferred stock will be equal to $1,000 per share, plus any accrued but unpaid dividends.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2017

EARNINGS PER SHARE

EARNINGS PER SHARE

Note 19 – 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 using the treasury stock method (outstanding stock options and unvested restricted stock) and common stock warrants. Presented below are the calculations for basic and diluted earnings per common share for the years ended December 31, 2017, 2016 and 2015 (in thousands, except for share and per share data):




	2017		2016		2015
Net income	$	16,056	$	31,542	$	24,324
Preferred stock dividends		(184)		—		—
Amortization of preferred stock premium		101		—		—
Net income available to common shareholders		15,973		31,542		24,324
Common shareholder dividends		(13,922)		(9,797)		(7,642)
Unvested restricted stock award dividends		(86)		(56)		(50)
Undistributed earnings to unvested restricted stock awards		(11)		(110)		(108)
Undistributed earnings to common shareholders	$	1,954	$	21,579	$	16,524
Basic
Distributed earnings to common shareholders	$	13,922	$	9,797	$	7,642
Undistributed earnings to common shareholders		1,954		21,579		16,524
Total common shareholders earnings, basic	$	15,876	$	31,376	$	24,166
Diluted
Distributed earnings to common shareholders	$	13,922	$	9,797	$	7,642
Undistributed earnings to common shareholders		1,954		21,579		16,524
Total common shareholders earnings		15,876		31,376		24,166
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		—		2		2
Total common shareholders earnings, diluted	$	15,876	$	31,378	$	24,168
Weighted average common shares outstanding, basic		17,781,631		14,130,552		11,902,455
Options and warrants		501,583		298,287		209,948
Weighted average common shares outstanding, diluted		18,283,214		14,428,839		12,112,403
Basic earnings per common share	$	0.89	$	2.22	$	2.03
Diluted earnings per common share		0.87		2.17		2.00

CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2017

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

Note 20 – Capital Requirements

Our primary source of cash is dividends received from the Bank. The Bank is restricted by Illinois law and regulations of the Illinois Department of Financial and Professional Regulation and the FDIC as to the maximum amount of dividends the Bank can pay to us. As a practical matter, the Bank restricts dividends to a lesser amount because of the need to maintain an adequate capital structure.

We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. The regulators require the Company to meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance‑sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Total capital, Tier 1 capital and Common equity tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations).

Beginning on January 1, 2016, a capital conservation buffer became effective for banking organizations, which is designed to establish a capital range above minimum requirements to insulate banks from periods of stress and impose constraints on dividends, share repurchases and discretionary bonus payments when capital levels fall below prescribed levels. The minimum capital conservation buffer in 2016 was 0.625%, is 1.25% in 2017, and will increase by 0.625% on January 1 of each subsequent year until fully phased in at 2.5% on January 1, 2019.

As of December 31, 2017, the Company and the Bank met all capital adequacy requirements to which they were subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized.

At December 31, 2017 and 2016, the Company’s and the Bank’s actual and required capital ratios were as follows (dollars in thousands):


	2017
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	478,914	13.26	%	$	288,895	8.00	%		N/A	N/A
Midland States Bank		445,285	12.32			289,252	8.00		$	361,565	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		367,841	10.19			216,671	6.00			N/A	N/A
Midland States Bank		428,184	11.84			216,939	6.00			289,252	8.00
Common equity tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		304,974	8.45			162,503	4.50			N/A	N/A
Midland States Bank		428,184	11.84			162,704	4.50			235,017	6.50
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		367,841	8.63			170,566	4.00			N/A	N/A
Midland States Bank		428,184	10.04			170,608	4.00			213,260	5.00


	2016
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	374,955	13.85	%	$	216,612	8.00	%		N/A	N/A
Midland States Bank		329,759	12.17			216,773	8.00		$	270,966	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		305,283	11.27			162,459	6.00			N/A	N/A
Midland States Bank		314,595	11.61			162,580	6.00			216,773	8.00
Common equity tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		253,273	9.35			121,844	4.50			N/A	N/A
Midland States Bank		314,595	11.61			121,935	4.50			176,128	6.50
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		305,283	9.76			125,076	4.00			N/A	N/A
Midland States Bank		314,595	10.05			125,271	4.00			156,589	5.00

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1G
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958577-112826

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958572-112826

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958574-112826

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=84167132&loc=d3e65071-112826

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958569-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958570-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958575-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958568-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958573-112826

+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Note 21 – Fair Value of Financial Instruments

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value including a three‑level valuation hierarchy, and expands disclosures about fair value measurements. 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: 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, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Inputs to a valuation methodology that are unobservable, supported by little or no market activity, and significant to the fair value measurement. These valuation methodologies generally include pricing models, discounted cash flow models, or a determination of fair value that requires significant management judgment or estimation. This category also includes observable inputs from a pricing service not corroborated by observable market data, such as pricing corporate securities.

Fair value is used on a recurring basis to account for securities available for sale and derivative instruments, and for financial assets for which the Company has elected the fair value option. For assets and liabilities measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for impaired loans and other real estate owned and also to record impairment on certain assets, such as goodwill, mortgage servicing rights, intangible assets and other long-lived assets.

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 December 31, 2017 and 2016, are summarized below (in thousands):


	2017
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	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	$	27,718	$	27,718	$	—	$	—
Government sponsored entity debt securities		25,211		—		25,211		—
Agency mortgage-backed securities		232,387		—		232,387		—
State and municipal securities		102,567		—		102,567		—
Corporate securities		59,812		—		55,033		4,779
Equity securities		2,830		—		2,830		—
Loans held for sale		50,089		—		50,089		—
Interest rate lock commitments		6,331		—		6,331		—
Forward commitments to sell mortgage-backed securities		31		—		31		—
Interest rate swap contracts		17		—		17		—
Total	$	506,993	$	27,718	$	474,496	$	4,779
Liabilities
Interest rate swap contracts	$	17	$	—	$	17	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	56,352	$	—	$	—	$	56,352
Mortgage servicing rights held for sale		10,176		10,176		—		—
Impaired loans		9,385		—		7,631		1,754
Other real estate owned		801		—		801		—
Assets held for sale		3,358		—		3,358		—


	2016
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	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	$	75,901	$	75,901	$	—	$	—
Government sponsored entity debt securities		7,688		—		7,688		—
Agency mortgage-backed securities		90,070		—		90,070		—
Non-agency mortgage-backed securities		1		—		—		1
State and municipal securities		25,274		—		25,274		—
Corporate securities		47,405		—		39,925		7,480
Loans held for sale		70,565		—		70,565		—
Interest rate lock commitments		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		—		125		—
Total	$	323,282	$	75,901	$	239,900	$	7,481
Liabilities
None

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	68,008	$	—	$	—	$	68,008
Impaired loans		10,202		—		6,635		3,567
Other real estate owned		165		—		165		—
Assets held for sale		1,550		—		1,550		—

The following table presents losses recognized on assets measured on a non‑recurring basis for the years ended December 31, 2017, 2016 and 2015 (in thousands):




	2017		2016		2015
Mortgage servicing rights	$	2,324	$	3,135	$	448
Mortgage servicing rights held for sale		4,059		—		—
Impaired loans		7,096		2,459		1,589
Other real estate owned		253		247		114
Assets held for sale		1,516		1,646		—
Total loss on assets measured on a nonrecurring basis	$	15,248	$	7,487	$	2,151

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2017 (in thousands):


			Non-Agency
	Corporate		Mortgage-Backed
	Securities		Securities
Balance, beginning of period	$	7,480	$	1
Total realized in earnings (1)		289		—
Total unrealized in other comprehensive income		264		—
Net settlements (principal and interest)		(3,254)		(1)
Balance, end of period	$	4,779	$	—

(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 December 31, 2017 (in thousands):

Non-recurring

Valuation

Unobservable

fair value measurements

Fair Value

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

56,352

Discounted cash flow

Prepayment speed

6.36% - 42.90% (8.83%)

Discount rate

8.00% - 14.50% (11.18%)

Impaired loans

1,754

Discounted cash flow

Discount rate

4.84% - 18.24% (8.64%)

Mortgage Servicing Rights. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the effect recorded in net gain on sales of loans in the consolidated statements of operations. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or, alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.

The Company utilizes the amortization method to subsequently measure the carrying value of its servicing rights. In accordance with GAAP, the Company must record impairment charges 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 at December 31, 2017 and 2016 were $56.4 million and $68.0 million, 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.

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2016 (in thousands).


				Non-Agency
	Corporate			Mortgage-Backed
	Securities			Securities
Balance, beginning of period	$	—	$	—
Transferred from Level 2		6,749		2
Transferred to Level 2		(2,000)		—
Purchases of investment securities recognized as Level 3		3,000		—
Total realized in earnings (1)		343		—
Total unrealized in other comprehensive income		(305)		—
Net settlements (principal and interest)		(307)		(1)
Balance, end of period	$	7,480	$	1

(1)

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

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 December 31, 2017 and 2016 (in thousands):


	2017						2016
	Aggregate				Contractual		Aggregate				Contractual
	fair value		Difference		principal		fair value		Difference		principal
Residential loans held for sale	$	12,241	$	374	$	11,867	$	25,678	$	315	$	25,363
Commercial loans held for sale		37,846		343		37,503		44,887		993		43,894
Total loans held for sale	$	50,087	$	717	$	49,370	$	70,565	$	1,308	$	69,257

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2017 and 2016 (in thousands):


	2017		2016
Residential loans held for sale	$	(74)	$	(491)
Commercial loans held for sale		(650)		705
Total loans held for sale	$	(724)	$	214

The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of December 31, 2017 and 2016 (in thousands):


	2017
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	214,519	$	214,519	$	214,519	$	—	$	—
Federal funds sold		683		683		683		—		—
Investment securities available for sale		450,525		450,525		27,718		418,028		4,779
Nonmarketable equity securities		34,796		34,796		—		34,796		—
Loans, net		3,210,247		3,200,016		—		—		3,200,016
Loans held for sale		50,089		50,089		—		50,089		—
Accrued interest receivable		11,715		11,715		—		11,715		—
Interest rate lock commitments		6,331		6,331		—		6,331		—
Forward commitments to sell mortgage-backed securities		31		31		—		31		—
Interest rate swap contracts		17		17		—		17		—
Liabilities
Deposits	$	3,131,089	$	3,127,626	$	—	$	3,127,626	$	—
Short-term borrowings		156,126		156,126		—		156,126		—
FHLB and other borrowings		496,436		494,634		—		494,634		—
Subordinated debt		93,972		90,860		—		90,860		—
Trust preferred debentures		45,379		46,069		—		46,069		—
Accrued interest payable		2,531		2,531		—		2,531		—
Interest rate swap contracts		17		17		—		17		—


	2016
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	189,543	$	189,543	$	189,543	$	—	$	—
Federal funds sold		1,173		1,173		1,173		—		—
Investment securities available for sale		246,339		246,339		75,901		162,957		7,481
Investment securities held to maturity		78,672		81,952		—		81,952		—
Nonmarketable equity securities		19,485		19,485		—		19,485		—
Loans, net		2,305,114		2,305,206		—		—		2,305,206
Loans held for sale		70,565		70,565		—		70,565		—
Accrued interest receivable		8,202		8,202		—		8,202		—
Interest rate lock commitments		6,253		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		125		—		125		—
Liabilities
Deposits	$	2,404,366	$	2,404,231	$	—	$	2,404,231	$	—
Short-term borrowings		131,557		131,557		—		131,557		—
FHLB and other borrowings		237,518		236,736		—		236,736		—
Subordinated debt		54,508		49,692		—		49,692		—
Trust preferred debentures		37,405		33,054		—		33,054		—
Accrued interest payable		1,045		1,045		—		1,045		—

The following is a description of the valuation methodologies used to measure our assets recorded at fair value (under ASC Topic 820) and for estimating fair value for financial instruments not recorded at fair value (under ASC Topic 825):

Cash and due from banks and federal funds sold. The carrying amounts are assumed to be the fair value because of the liquidity of these instruments.

Investment securities available for sale. Investment securities available for sale are measured and carried at fair value on a recurring basis. Unrealized gains and losses on investment securities available for sale are reported as a component of accumulated other comprehensive income (loss) in the consolidated balance sheets.

For investment securities available for sale where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). In determining the fair value of investment securities available for sale categorized as Level 2, we obtain a report from a nationally recognized broker‑dealer detailing the fair value of each investment security we hold as of each reporting date. The broker‑dealer uses observable market information to value our fixed income securities, with the primary source being a nationally recognized pricing service. The fair value of the municipal securities is based on a proprietary model maintained by the broker‑dealer. We review all of the broker‑dealer supplied quotes on the securities we own as of the reporting date for reasonableness based on our understanding of the marketplace and we consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy.

For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During the year ended December 31, 2016, $6.7 million of corporate securities and $2,000 of non-agency mortgage backed securities were transferred from Level 2 to Level 3 because observable market inputs were not available and the securities were not actively traded; therefore, the fair value was determined utilizing third-party valuation services through consensus pricing. There were no investment securities available for sale transferred from Level 2 to Level 3 during the year ended December 31, 2017.

Investment securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. The significant unobservable input used in the fair value measurement of Level 3 corporate securities is net market price (range of -2.5% to 2.5%; weighted average of 1.5%). Significant changes in any of the inputs in isolation would result in a significant change to the fair value measurement. Net market price generally increases when market interest rates decline and declines when market interest rates increase.

During the year ended December 31, 2016, $2.0 million of corporate securities were transferred from Level 3 to Level 2 because a more liquid market for these securities had developed and prices supported by observable market inputs had become available.

Investment securities held to maturity. Investment securities held to maturity are those debt instruments which the Company has the positive intent and ability to hold until maturity. Securities held to maturity are recorded at cost, adjusted for the amortization of premiums or accretion of discounts.

For investment securities held to maturity where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). In determining the fair value of investment securities held to maturity categorized as Level 2, we obtain a report from a nationally recognized broker‑dealer detailing the fair value of each investment security we hold as of each reporting date. The fair value of the municipal securities is based on a proprietary model maintained by the broker‑dealer. We review all of the broker‑dealer supplied quotes on the securities we own as of the reporting date for reasonableness based on our understanding of the marketplace, and we consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy.

Nonmarketable equity securities. Nonmarketable equity securities are primarily FHLB and Federal Reserve Bank stock. The Company is a member of the FHLB and the Federal Reserve System. The carrying value is our basis because it is not practical to determine the fair value due to restrictions placed on transferability.

Loans. Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type and further segmented into fixed and adjustable rate interest terms and by credit risk categories. The fair value estimates do not take into consideration the value of the loan portfolio in the event the loans have to be sold outside the parameters of normal operating activities. The fair value of performing fixed rate loans is estimated by discounting scheduled cash flows through the estimated maturity using estimated market prepayment speeds and estimated market discount rates that reflect the credit and interest rate risk inherent in the loans. The estimated market discount rates used for performing fixed rate loans are the Company’s current offering rates for comparable instruments with similar terms. The fair value of performing adjustable rate loans is estimated by discounting scheduled cash flows through the next repricing date. As these loans reprice frequently at market rates and the credit risk is not considered to be greater than normal, the market value is typically close to the carrying amount of these loans. The method of estimating fair value does not incorporate the exit‑price concept of fair value prescribed by ASC Topic 820.

Loans held for sale. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market.

Other real estate owned. The fair value of foreclosed real estate is generally based on estimated market prices from independently prepared current appraisals or negotiated sales prices with potential buyers; such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis. When a current appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value as a result of known changes in the market or the collateral and there is no observable market price, such valuation inputs result in a fair value measurement that is categorized as a Level 3 measurement. To the extent a negotiated sales price or reduced listing price represents a significant discount to an observable market price, such valuation input would result in a fair value measurement that is also considered a Level 3 measurement.

Assets held for sale. Assets held for sale represent the fair value of the banking facilities that are expected to be sold as a result of the branch network optimization plan that was announced in November 2016, as further discussed in Note 6 to the consolidated financial statements. The fair value of the assets held for sale was based on estimated market prices from independently prepared current appraisals. Such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis.

Accrued interest receivable. The carrying amounts approximate their fair values.

Deposits. Deposits are carried at historical cost. The fair value of deposits with no stated maturity, such as noninterest‑bearing demand deposits, money market, savings and checking accounts, is equal to the amount payable on demand as of the balance sheet date. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Short-term borrowings. Short-term borrowings consist of repurchase agreements. These borrowings typically have terms of less than 30 days, and therefore, their carrying amounts are a reasonable estimate of fair value.

FHLB advances and other borrowings and subordinated debt. Borrowings are carried at amortized cost. The fair value of fixed rate borrowings is calculated by discounting scheduled cash flows through the estimated maturity or call dates using estimated market discount rates that reflect rates offered at that time for borrowings with similar remaining maturities and other characteristics.

Trust preferred debentures. Debentures are carried at amortized cost. The fair value of variable rate debentures is calculated by discounting scheduled cash flows through the estimated maturity or call dates using estimated market discount rates that reflect spreads offered at that time for borrowings with similar remaining maturities and other characteristics.

Accrued interest payable. The carrying amounts approximate their fair values.

Derivative financial instruments. The Company enters into interest rate lock commitments which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. These commitments are carried at fair value in other assets on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. These commitments are carried at fair value in other assets or other liabilities on the consolidated balance sheets with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

- 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

12 Months Ended

Dec. 31, 2017

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Note 22 – 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 obligated under noncancelable operating leases for office space and other commitments. Certain leases contain escalation clauses providing for increased rental payments based primarily on increases in real estate taxes or in the average consumer price index. Net rent expense under operating leases included in occupancy and equipment expense was approximately $2.7 million, $2.4 million and $2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The projected minimum rental payments under the terms of the leases as of December 31, 2017 are as follows (in thousands):


	Amount
Year ending December 31:
2018	$	2,743
2019		2,460
2020		2,152
2021		2,039
2022		1,793
Thereafter		3,651
Total estimated lease payments	$	14,838

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 December 31, 2017 and 2016 are as follows (in thousands):


	2017		2016
Commitments to extend credit	$	568,356	$	483,345
Financial guarantees – standby letters of credit		142,189		89,233

The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis, primarily to government-sponsored enterprises (“GSEs”). The Company’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Company may be obligated to repurchase the loan or reimburse the GSEs for losses incurred. The make-whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. The Company establishes a mortgage repurchase liability related to these events that reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on a combination of factors. Such factors incorporate the volume of loans sold in 2017 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 $17,000, $83,000 and $63,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The liability for unresolved repurchase demands totaled $371,000 and $329,000 at December 31, 2017 and 2016, respectively.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2017

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 23 – Segment Information

Our business segments are defined as Banking, Commercial FHA Origination and Servicing, 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 other segment includes the operating results of the parent company, our wealth management business unit, our captive insurance business unit, and the elimination of intercompany transactions. Wealth management activities consist of trust and fiduciary services, brokerage, investment advisory services and retirement planning services.

Selected business segment financial information as of and for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
December 31, 2017
Net interest income (expense)	$	135,974	$	312	$	(6,624)	$	129,662
Provision for loan losses		9,556		—		—		9,556
Noninterest income		32,223		18,570		8,569		59,362
Noninterest expense		127,981		13,729		11,287		152,997
Income (loss) before income taxes (benefit)		30,660		5,153		(9,342)		26,471
Income taxes (benefit)		17,102		(1,033)		(5,654)		10,415
Net income (loss)	$	13,558	$	6,186	$	(3,688)	$	16,056
Total assets	$	4,403,517	$	99,685	$	(90,501)	$	4,412,701

December 31, 2016
Net interest income (expense)	$	109,950	$	1,003	$	(5,699)	$	105,254
Provision for loan losses		5,591		—		—		5,591
Noninterest income		47,646		22,979		1,432		72,057
Noninterest expense		100,053		15,104		6,132		121,289
Income (loss) before income taxes (benefit)		51,952		8,878		(10,399)		50,431
Income taxes (benefit)		17,129		3,332		(1,572)		18,889
Net income (loss)	$	34,823	$	5,546	$	(8,827)	$	31,542
Total assets	$	3,225,765	$	129,943	$	(121,985)	$	3,233,723

December 31, 2015
Net interest income (expense)	$	107,825	$	1,762	$	(4,680)	$	104,907
Provision for loan losses		11,127		—		—		11,127
Noninterest income		34,751		20,148		4,583		59,482
Noninterest expense		95,795		16,232		5,820		117,847
Income (loss) before income taxes (benefit)		35,654		5,678		(5,917)		35,415
Income taxes (benefit)		10,626		2,271		(1,806)		11,091
Net income (loss)	$	25,028	$	3,407	$	(4,111)	$	24,324
Total assets	$	2,886,539	$	89,242	$	(90,957)	$	2,884,824

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2017
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	Note 24 – Related Party Transactions The Company utilizes the services of a company to act as a general manager for the construction of new branch facilities. A member of our board of directors is a substantial shareholder of this company and currently serves as its Chairman. During the years ended December 31, 2017, 2016 and 2015, the Company paid $20,000, $161,000 and $1.8 million, respectively, for work on various projects. A former member of our board of directors had an ownership interest in the office building located in Clayton, Missouri and three of the Bank’s full-service branch facilities as of December 31, 2017. During the years ended December 31, 2017, 2016 and 2015, the Company paid rent on these properties of $719,000, $706,000 and $693,000, respectively. A member of our board of directors is an executive and board member of a company we utilize for relationship and marketplace studies. During the year ended December 31, 2017, the Company paid $116,000 for these services.

PARENT COMPANY ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2017

PARENT COMPANY ONLY FINANCIAL INFORMATION

PARENT COMPANY ONLY FINANCIAL INFORMATION

Note 25 – Parent Company Only Financial Information

The following tables present condensed financial information for Midland States Bancorp, Inc.:


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2017		2016
Assets:
Cash	$	60,424	$	38,803
Investment in common stock of subsidiaries		563,541		380,474
Accrued income taxes receivable		3,300		17
Other assets		2,303		2,047
Total assets	$	629,568	$	421,341
Liabilities:
Subordinated debt	$	93,972	$	54,508
Trust preferred debentures		45,379		37,405
Other borrowings		37,294		—
Deferred tax liabilities, net		252		5,037
Other liabilities		3,126		2,621
Total liabilities		180,023		99,571
Shareholders’ equity		449,545		321,770
Total liabilities and shareholders’ equity	$	629,568	$	421,341


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2017		2016		2015
Dividends from subsidiaries	$	19,500	$	—	$	14,500
Other income		4		428		1,070
Interest expense		(7,162)		(5,699)		(4,680)
Other expense		(1,295)		(1,130)		(132)
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries		11,047		(6,401)		10,758
Income tax benefit		6,080		1,687		1,806
Income before income taxes		17,127		(4,714)		12,564
Equity in undistributed (loss) income of subsidiaries		(1,071)		36,256		11,760
Net income	$	16,056	$	31,542	$	24,324


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	16,056	$	31,542	$	24,324
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed loss (income) of subsidiaries		1,071		(36,256)		(11,760)
Amortization of restricted stock awards		836		555		517
Compensation expense for stock option grants		548		492		413
Change in other assets		(3,226)		4,237		(3,559)
Change in other liabilities		1,649		225		(8,426)
Net cash provided by operating activities		16,934		795		1,509
Cash flows from investing activities:
Net cash paid in acquisition		(60,457)		—		(20,053)
Capital injection to subsidiaries		(350)		(25,250)		(30,000)
Net cash used in investing activities		(60,807)		(25,250)		(50,053)
Cash flows from financing activities:
Payment made on subordinated debt		—		(8,000)		—
Proceeds from issuance of subordinated debt, net of issuance costs		39,354		—		55,325
Proceeds from other borrowings, net of issuance costs		39,964		—		—
Payments made on other borrowings		(2,857)		—		(14,000)
Cash dividends paid on preferred stock		(184)		(9,853)		(7,692)
Cash dividends paid on common stock		(14,008)		—		—
Proceeds from issuance of common stock in initial public offering, net of issuance costs		—		71,475		—
Proceeds from issuance of common stock under employee benefit plans		3,225		1,318		470
Net cash provided by financing activities		65,494		54,940		34,103
Net increase (decrease) in cash		21,621		30,485		(14,441)
Cash:
Beginning of year		38,803		8,318		22,759
End of year	$	60,424	$	38,803	$	8,318

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2017

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

Note 26 – Quarterly Condensed Financial Information (Unaudited)

The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2017 and 2016 (in thousands, except for per share data):


	2017 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	31,839	$	34,528	$	43,246	$	43,500
Interest expense		4,378		5,128		6,481		7,464
Net interest income		27,461		29,400		36,765		36,036
Provision for loan losses		1,533		458		1,489		6,076
Net interest income after provision for loan losses		25,928		28,942		35,276		29,960
Noninterest income		16,342		13,619		15,403		13,998
Noninterest expense		30,797		37,645		48,363		36,192
Income before income taxes		11,473		4,916		2,316		7,766
Income taxes		2,983		1,377		280		5,775
Net income		8,490		3,539		2,036		1,991
Preferred stock dividends		—		19		27		37
Net income available to common shareholders	$	8,490	$	3,520	$	2,009	$	1,954
Per common share data:
Basic earnings per common share	$	0.54	$	0.21	$	0.10	$	0.10
Diluted earnings per common share		0.52		0.20		0.10		0.10


	2016 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,967	$	32,115	$	31,186	$	29,981
Interest expense		3,926		4,126		3,921		4,022
Net interest income		24,041		27,989		27,265		25,959
Provision for loan losses		1,125		629		1,392		2,445
Net interest income after provision for loan losses		22,916		27,360		25,873		23,514
Noninterest income		12,618		14,016		14,937		30,486
Noninterest expense		27,638		30,904		28,657		34,090
Income before income taxes		7,896		10,472		12,153		19,910
Income taxes		2,777		3,683		4,102		8,327
Net income	$	5,119	$	6,789	$	8,051	$	11,583
Per common share data:
Basic earnings per common share	$	0.43	$	0.51	$	0.51	$	0.74
Diluted earnings per common share		0.42		0.50		0.51		0.72

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2017
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	Note 27 – Subsequent Events Acquisition of Alpine Bancorporation, Inc. – Completed on February 28, 2018 On February 28, 2018, the Company completed its acquisition of Alpine Bancorporation, Inc. (“Alpine”) and its banking subsidiary, Alpine Bank, which operates 19 locations in northern Illinois, for total consideration of $173.2 million. Consideration transferred by the Company consisted of $33.3 million in cash and 4,463,200 shares of the Company’s common stock. The final fair values of assets and liabilities are not yet available. As of December 31, 2017, Alpine had total assets of $1.24 billion, gross loans of $824.6 million and total deposits of $1.10 billion. The Company anticipates there will be goodwill and core deposit intangibles recorded with this acquisition. Goodwill is calculated as the excess of the cash consideration transferred over the net of the acquisition-date fair values of identifiable assets acquired and liabilities assumed.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. 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 annual periods presented herein, have been included. Certain reclassifications of 2016 amounts have been made to conform to the 2017 presentation but do not have an effect on net income.
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 consolidated financial statements.
Business Combinations	Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days.
Investment Securities	Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities and non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as trading, available for sale or held to maturity at the time of purchase. Securities purchased with the intention of recognizing short-term profits or which are actively bought and sold are classified as trading account securities and reported at fair value. Unrealized gains and losses on trading securities are included in earnings. Held‑to‑maturity securities are those debt instruments which the Company has the positive intent and ability to hold until maturity. Held‑to‑maturity securities are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. All other securities are classified as available for sale. Available‑for‑sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available‑for‑sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available‑for‑sale or held‑to‑maturity security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other‑than‑temporary impairment (“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; projected cash flows on covered non‑agency mortgage‑backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized over the estimated life or to the earliest call date and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income.
Nonmarketable Equity Securities	Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”), and other nonmarketable equity securities. The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank is also a member of its regional FRB. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.
Loans	Loans Non‑Purchased Credit Impaired loans. Non‑Purchased Credit Impaired (“PCI”) loans, for which the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as loans in the consolidated balance sheets. Non‑PCI loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of any unearned discount or unamortized premium. Interest income is recorded on the accrual basis in accordance with the terms of the respective loan. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well‑secured and management believes full collectability of principal and interest is probable. Nonrefundable loan fees and related direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Lease Financing. The Company provides indirect financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the lease property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans. We account for loans under ASC 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually; obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods.
Loans Held for Sale	Loans Held for Sale Loans held for sale consist of residential and commercial mortgage loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in commercial FHA revenue and residential mortgage banking revenue on the consolidated statements of income.
Mortgage Repurchase Reserve	Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 22 in the consolidated financial statements for additional information on the mortgage repurchase reserve.
Premises and Equipment	Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount.
Other Real Estate Owned	Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 30th as of the date to perform the annual impairment test. Refer to Note 8 in the consolidated financial statements for additional information on the annual impairment test results. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value.
Mortgage Servicing Rights	Mortgage Servicing Rights The Company sells residential and commercial mortgage loans in the secondary market and typically retains the right to service the loans sold. Upon sale, a mortgage servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. Mortgage servicing rights, when purchased, are initially recorded at fair value. As the Company has not elected to subsequently measure either of its classes of servicing assets, residential or commercial, under the fair value measurement method, the Company follows the amortization method. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The Company periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on the fair value of net servicing cash flows at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans. 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 determined based on current market conditions. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other‑than‑temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write‑down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write‑down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. We recognize revenue from servicing residential and commercial mortgages as earned based on the specific contractual terms. This revenue, along with 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 Held for Sale	Mortgage Servicing Rights Held for Sale Mortgage servicing rights held for sale consist of residential mortgage servicing rights that management has committed to a plan to sell and has the ability to sell them to a buyer in their present condition. Mortgage servicing rights held for sale are carried at the lower of their carrying value or fair value less estimated costs to sell. Decreases in the valuation of mortgage servicing rights held for sale are included in loss on mortgage servicing rights held for sale in the consolidated statements of income.
Cash Surrender Value of Life Insurance Policies	Cash Surrender Value of Life Insurance Policies We have purchased life insurance policies on the lives of certain officers and key employees and are the owner and beneficiary of the policies. These policies provide an efficient form of funding for long‑term retirement and other employee benefits costs. These policies are recorded as cash surrender value of life insurance policies in the consolidated balance sheets at each policy’s respective cash surrender value, with changes in value recorded in noninterest income in the consolidated statements of income.
Derivative Financial Instruments	Derivative Financial Instruments All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. On the date the derivative contract is entered into, the derivative is designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability “cash flow” hedge. Changes in the fair value of a derivative that is highly effective as—and that is designated and qualifies as—a cash flow hedge are recorded in accumulated other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable‑rate asset or liability are recorded in earnings). We formally document all relationships between hedging instruments and hedged items, as well as the risk‑management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, hedge accounting is prospectively discontinued, as discussed below. Hedge accounting is prospectively discontinued when (a) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (b) the derivative expires or is sold, terminated, or exercised; (c) the derivative is no longer designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the consolidated balance sheet at its fair value, and gains and losses that were in accumulated other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the consolidated balance sheet, with subsequent changes in its fair value recognized in current‑period earnings. The Company also enters into interest rate lock commitments, which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Interest rate lock commitments for mortgage loans that will be held for resale are carried at fair value on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. Forward loan sales commitments that meet the definition of a derivative are recorded at fair value in the consolidated balance sheet with changes in fair value reflected in commercial FHA and residential mortgage banking income.
Credit Related Financial Instruments	Credit‑Related Financial Instruments In the ordinary course of business, the Company has entered into credit‑related financial instruments consisting of commitments to extend credit, commercial letters of credit and standby letters of credit. The notional amount of these commitments is not reflected in the consolidated financial statements until they are funded. A liability for losses related to unfunded commitments is maintained by the Company at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the liability is based on an evaluation of the unfunded credit facilities, including an assessment of historical commitment utilization experience, credit risk grading and historical loss rates. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of the Company’s allowance for loan losses, as discussed above. Net adjustments to the liability for unfunded commitments are included in other noninterest expense in the consolidated statements of income. The liability for unfunded commitments totaled $670,000 and $302,000 at December 31, 2017 and 2016, respectively.
Income Taxes	Income Taxes We file consolidated federal and state income tax returns, with each organization computing its taxes on a separate return basis. The provision for income taxes is based on income as reported in the consolidated financial statements. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. The deferred tax assets and liabilities are computed based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely than‑not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. Interest and penalties associated with unrecognized tax benefits are to be classified as additional income taxes in the consolidated statements of income. The Company evaluated its tax positions and concluded that it had taken no uncertain tax positions that require adjustment in the consolidated financial statements.
Stock Compensation Plans	Stock Compensation Plans Compensation cost for share‑based payment awards is based on the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a Black‑Scholes option pricing model. The fair value of restricted stock is determined based on the Company’s current market price on the date of grant. Compensation cost is recognized in the consolidated financial statements on a straight‑line basis over the requisite service period, which is generally defined as the vesting period. Additionally, the Company accounts for forfeitures as they occur.
Comprehensive Income	Comprehensive Income Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non‑owner changes in equity. Non‑owner equity changes include unrealized gains and losses on available for sale securities and changes in the fair value of cash flow hedges. These are components of comprehensive income and do not have an impact on the Company’s net income.
Earnings per Share	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 and common stock warrants using the treasury stock method and convertible preferred stock and convertible debentures using the if‑converted method.
Impact of Recently Issued Accounting Standards	Impact of Recently Issued Accounting Standards FASB Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”; FASB ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” – In May 2014, the Financial Accounting Standards Board (the “FASB”) amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. These amendments became effective for the Company on January 1, 2018. The Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. The impact of applying this standard to the Company’s consolidated financial statements was determined to be immaterial since the Company’s revenue recognition pattern for revenue streams within the scope of ASU 2014-09 did not change significantly from current practice. Entities have the option of using either a full retrospective or modified retrospective transition method to adopt ASU 2014-09. We elected to implement this standard using the modified retrospective approach, with the cumulative effect recorded as an adjustment to opening retained earnings at January 1, 2018. 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. The Company continues to evaluate the impact of the disclosure requirements associated with ASU 2014-09 and is finalizing any necessary changes to related disclosures. FASB ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.” – In January 2016, the FASB issued this standard which is intended to improve the recognition and measurement of financial instruments. This standard, among other things: (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-1 became effective for the Company on January 1, 2018. The Company has completed its evaluation of adopting the new guidance on its consolidated financial statements and there is no material impact. The Company is still finalizing changes to the related disclosures. FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. This update is effective for us on January 1, 2019, with early adoption permitted. We have not yet decided whether we will early adopt the new standard. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. The Company has developed a project plan for evaluating the provisions of the new lease standard, but has not yet determined the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the pending adoption of ASU 2016-02 and its impact on the Company’s consolidated financial statements. 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.” 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. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has formed a cross functional committee that has overseen the enhancement of existing technology required to source and model data for the purposes of meeting this standard. The committee is also in the process of selecting a vendor to assist in generating loan level cash flows and disclosures. While the Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, the Company cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the potential impact on the Company’s consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends FASB ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company elected to early adopt the new guidance in the first quarter of 2017. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. FASB ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities” – In March 2017, the FASB issued ASU No. 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the amortization period for premiums on certain callable debt securities to the earliest call date, rather than contractual maturity date as currently required under GAAP. For public business entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted for any organization in any interim period or fiscal year. The Company elected to early adopt the new guidance in the first quarter of 2017. Adoption of the ASU did not have a material impact on the Company’s consolidated financial statements. FASB ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” – In February 2018, ASU 2018-02 was issued following the enactment of the Tax Cuts and Jobs Act, which changed the Company’s federal income tax rate from 35% to 21%. This standard allows an entity to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The standard is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company expects to early adopt this standard in the first quarter of 2018. The resultant reclassification to retained earnings will not be materi

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2017

ACQUISITIONS

Schedule of allocation of consideration

Based on management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the consideration paid for the acquisition is allocated as follows (in thousands):


	Centrue
Assets acquired:
Cash and cash equivalents	$	42,461
Investment securities available for sale		149,013
Loans		679,946
Loans held for sale		531
Premises and equipment		17,147
Other real estate owned		4,759
Nonmarketable equity securities		8,168
Accrued interest receivable		2,376
Mortgage servicing rights		1,933
Intangible assets		11,070
Cash surrender value of life insurance policies		36,349
Deferred tax assets, net		34,284
Other assets		2,256
Total assets acquired		990,293
Liabilities assumed:
Deposits		739,867
Short-term borrowings		14,434
FHLB advances and other borrowings		95,332
Trust preferred debentures		7,565
Accrued interest payable		275
Other liabilities		3,600
Total liabilities assumed		861,073
Net assets acquired		129,220
Goodwill		47,359
Total consideration paid	$	176,579

Schedule of acquired loan data

Acquired loan data for Centrue can be found in the table below (in thousands):


					Best Estimate at
					Acquisition Date of
	Fair Value		Gross Contractual		Contractual Cash
	of Acquired Loans		Amounts Receivable		Flows Not Expected
	at Acquisition Date		at Acquisition Date		to be Collected
Acquired receivables subject to ASC 310-30	$	11,428	$	20,476	$	7,180
Acquired receivables not subject to ASC 310-30		668,518		821,338		4,518

Schedule of unaudited pro-forma information


	2017		2016
Revenue(1)	$	206,885	$	220,185
Net income		17,290		37,001
Diluted earnings per common share	$	0.87	$	2.09

(1)

Net interest income plus noninterest income

INVESTMENT SECURITIES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of investment securities

Investment securities as of December 31, 2017 and 2016 are as follows (in thousands):


	2017
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	28,005	$	—	$	287	$	27,718
Government sponsored entity debt securities		25,445		41		275		25,211
Agency mortgage-backed securities		233,606		882		2,101		232,387
State and municipal securities		99,449		3,632		514		102,567
Corporate securities		58,904		1,087		179		59,812
Equity securities		2,715		140		25		2,830
Total available for sale securities	$	448,124	$	5,782	$	3,381	$	450,525


	2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Available for sale securities
U.S. Treasury securities	$	75,973	$	—	$	72	$	75,901
Government sponsored entity debt securities		7,653		57		22		7,688
Agency mortgage-backed securities		90,629		373		932		90,070
Non-agency mortgage-backed securities		1		—		—		1
State and municipal securities		25,826		15		567		25,274
Corporate securities		47,443		403		441		47,405
Total available for sale securities	$	247,525	$	848	$	2,034	$	246,339
Held to maturity securities
State and municipal securities	$	78,672	$	3,517	$	237	$	81,952

Schedule of unrealized losses and fair values for investment securities


	2017
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	19,758	$	251	$	7,960	$	36	$	27,718	$	287
Government sponsored entity debt securities		24,168		275		—		—		24,168		275
Agency mortgage-backed securities		124,192		1,500		19,530		601		143,722		2,101
State and municipal securities		29,338		331		5,889		183		35,227		514
Corporate securities		5,917		85		3,463		94		9,380		179
Equity securities		2,603		25		—		—		2,603		25
Total available for sale securities	$	205,976	$	2,467	$	36,842	$	914	$	242,818	$	3,381


	2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
Available for sale securities
U.S. Treasury securities	$	75,901	$	72	$	—	$	—	$	75,901	$	72
Government sponsored entity debt securities		4,107		22		—		—		4,107		22
Agency mortgage-backed securities		57,882		930		402		2		58,284		932
State and municipal securities		20,215		567		—		—		20,215		567
Corporate securities		11,111		334		8,312		107		19,423		441
Total available for sale	$	169,216	$	1,925	$	8,714	$	109	$	177,930	$	2,034
Held to maturity securities
State and municipal securities	$	13,991	$	140	$	2,699	$	97	$	16,690	$	237

Available for sale

Contractual maturity of amortized cost and fair value


	Amortized		Fair
	cost		value
Debt securities:
Within one year	$	17,648	$	17,600
After one year through five years		64,534		64,653
After five years through ten years		122,716		126,068
After ten years		240,511		239,374
Equity securities		2,715		2,830
Total available for sale securities	$	448,124	$	450,525

LOANS (Tables)

12 Months Ended

Dec. 31, 2017

LOANS

Summary of loans


	2017						2016
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans (1)		Total		Loans		Loans (1)		Total
Loans:
Commercial	$	553,257	$	2,673	$	555,930	$	454,310	$	3,517	$	457,827
Commercial real estate		1,427,076		12,935		1,440,011		963,895		5,720		969,615
Construction and land development		199,853		734		200,587		165,175		12,150		177,325
Total commercial loans		2,180,186		16,342		2,196,528		1,583,380		21,387		1,604,767
Residential real estate		447,602		5,950		453,552		247,156		6,557		253,713
Consumer		371,286		169		371,455		269,705		312		270,017
Lease financing		205,143		—		205,143		191,479		—		191,479
Total loans	$	3,204,217	$	22,461	$	3,226,678	$	2,291,720	$	28,256	$	2,319,976

(1)

The unpaid principal balance for PCI loans totaled $32.8 million and $34.6 million as of December 31, 2017 and 2016, respectively.

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

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2017 and 2016 (in thousands):


	2017								2016
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	510,928	$	1,384,630	$	191,872	$	2,087,430	$	426,560	$	925,244	$	159,702	$	1,511,506
Special mention		12,290		11,497		—		23,787		10,930		8,735		—		19,665
Substandard		27,718		14,695		—		42,413		12,649		21,178		450		34,277
Substandard – nonaccrual		1,266		12,482		785		14,533		3,559		7,145		21		10,725
Doubtful		—		—		—		—		—		—		—		—
Not graded		1,055		3,772		7,196		12,023		612		1,593		5,002		7,207
Total (excluding PCI)	$	553,257	$	1,427,076	$	199,853	$	2,180,186	$	454,310	$	963,895	$	165,175	$	1,583,380


	2017								2016
	Residential				Lease				Residential				Lease
	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	441,418	$	370,999	$	203,797	$	1,016,214	$	242,127	$	269,492	$	190,148	$	701,767
Impaired		6,184		287		1,346		7,817		5,029		213		1,331		6,573
Total (excluding PCI)	$	447,602	$	371,286	$	205,143	$	1,024,031	$	247,156	$	269,705	$	191,479	$	708,340

Summary of impaired loans (excluding PCI loans)

A summary of impaired loans (excluding PCI loans) as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Nonaccrual loans:
Commercial	$	1,266	$	3,559
Commercial real estate		12,482		7,145
Construction and land development		785		21
Residential real estate		5,204		4,629
Consumer		234		187
Lease financing		1,346		1,330
Total nonaccrual loans		21,317		16,871
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		2,538		2,378
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		51		—
Consumer		53		26
Lease financing		—		1
Total accruing loans contractually past due 90 days or more as to interest or principal payments		2,642		2,405
Loans modified under troubled debt restructurings and still accruing:
Commercial		299		611
Commercial real estate		1,515		11,253
Construction and land development		58		63
Residential real estate		929		400
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings and still accruing		2,801		12,327
Total impaired loans (excluding PCI)	$	26,760	$	31,603

The following table presents impaired loans (excluding PCI loans) by portfolio and related valuation allowance, as of December 31, 2017 and 2016 (in thousands):


	2017						2016
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	3,237	$	3,297	$	526	$	3,877	$	3,888	$	882
Commercial real estate		2,297		3,508		329		2,142		2,331		309
Construction and land development		103		102		10		84		84		8
Residential real estate		4,028		4,705		566		3,735		4,404		604
Consumer		266		279		29		213		190		23
Lease financing		1,064		1,064		345		1,331		1,331		356
Total impaired loans with a valuation allowance		10,995		12,955		1,805		11,382		12,228		2,182
Impaired loans with no related valuation allowance:
Commercial		866		5,782		—		2,671		7,567		—
Commercial real estate		11,700		17,359		—		16,256		17,058		—
Construction and land development		740		780		—		—		—		—
Residential real estate		2,156		2,380		—		1,294		1,462		—
Consumer		21		21		—		—		26		—
Lease financing		282		282		—		—		—		—
Total impaired loans with no related valuation allowance		15,765		26,604		—		20,221		26,113		—
Total impaired loans:
Commercial		4,103		9,079		526		6,548		11,455		882
Commercial real estate		13,997		20,867		329		18,398		19,389		309
Construction and land development		843		882		10		84		84		8
Residential real estate		6,184		7,085		566		5,029		5,866		604
Consumer		287		300		29		213		216		23
Lease financing		1,346		1,346		345		1,331		1,331		356
Total impaired loans (excluding PCI)	$	26,760	$	39,559	$	1,805	$	31,603	$	38,341	$	2,182


	2017				2016				2015
			Interest Income				Interest Income				Interest Income
	Average		Recognized		Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	2,969	$	15	$	3,974	$	15	$	7,088	$	—
Commercial real estate		5,408		70		2,379		306		9,225		267
Construction and land development		83		4		87		7		—		—
Residential real estate		3,854		38		3,782		30		3,231		16
Consumer		299		—		221		—		52		—
Lease financing		1,064		—		1,331		—		398		—
Total impaired loans with a valuation allowance		13,677		127		11,774		358		19,994		283
Impaired loans with no related valuation allowance:
Commercial		2,369		—		5,604		1		781		—
Commercial real estate		16,822		—		16,847		17		4,599		—
Construction and land development		815		—		—		—		—		—
Residential real estate		2,055		3		1,179		2		954		2
Consumer		13		—		26		—		—		—
Lease financing		282		—		—		—		—		—
Total impaired loans with no related valuation allowance		22,356		3		23,656		20		6,334		2
Total impaired loans:
Commercial		5,338		15		9,578		16		7,869		—
Commercial real estate		22,230		70		19,226		323		13,824		267
Construction and land development		898		4		87		7		—		—
Residential real estate		5,909		41		4,961		32		4,185		18
Consumer		312		—		247		—		52		—
Lease financing		1,346		—		1,331		—		398		—
Total impaired loans (excluding PCI)	$	36,033	$	130	$	35,430	$	378	$	26,328	$	285

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

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2017 (in thousands):


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	3,282	$	177	$	2,538	$	1,266	$	7,263	$	545,994	$	553,257
Commercial real estate		3,116		630		—		12,482		16,228		1,410,848		1,427,076
Construction and land development		1,953		—		—		785		2,738		197,115		199,853
Residential real estate		897		632		51		5,204		6,784		440,818		447,602
Consumer		2,824		1,502		53		234		4,613		366,673		371,286
Lease financing		392		—		—		1,346		1,738		203,405		205,143
Total (excluding PCI)	$	12,464	$	2,941	$	2,642	$	21,317	$	39,364	$	3,164,853	$	3,204,217

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2016 (in thousands):


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	3,326	$	138	$	2,378	$	3,559	$	9,401	$	444,909	$	454,310
Commercial real estate		648		787		—		7,145		8,580		955,315		963,895
Construction and land development		—		—		—		21		21		165,154		165,175
Residential real estate		3,472		13		—		4,629		8,114		239,042		247,156
Consumer		1,701		588		26		187		2,502		267,203		269,705
Lease financing		94		—		1		1,330		1,425		190,054		191,479
Total (excluding PCI)	$	9,241	$	1,526	$	2,405	$	16,871	$	30,043	$	2,261,677	$	2,291,720

Summary of TDRs loans


	2017						2016
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	299	$	—	$	299	$	611	$	—	$	611
Commercial real estate		1,515		9,915		11,430		11,253		5,098		16,351
Construction and land development		58		—		58		63		—		63
Residential real estate		929		282		1,211		400		527		927
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	2,801	$	10,197	$	12,998	$	12,327	$	5,625	$	17,952

(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
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		1		1		—		4		—		—		6
Pre-modification outstanding balance	$	362	$	323	$	—	$	528	$	—	$	—	$	1,213
Post-modification outstanding balance		299		323		—		508		—		—		1,130

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


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		3		2		—		3		—		—		8
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	206	$	—	$	—	$	11,098
Post-modification outstanding balance		647		10,139		—		206		—		—		10,992

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	28	$	—	$	—	$	—	$	—	$	28


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		—		1		—		—		—		—		1
Pre-modification outstanding balance	$	—	$	58	$	—	$	—	$	—	$	—	$	58
Post-modification outstanding balance		—		58		—		—		—		—		58

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	54	$	—	$	—	$	—	$	—	$	54

Summary of changes in accretable yield for PCI loans

Accretable yield of PCI loans, or income expected to be collected is as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands):



	2017		2016		2015
Balance, beginning of period	$	9,035	$	10,526	$	16,198
New loans purchased – Centrue acquisition		1,929		—		—
Accretion		(5,546)		(8,579)		(5,676)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		120		915		—
Reclassification from non-accretable		194		6,173		4
Balance, end of period	$	5,732	$	9,035	$	10,526

Summary of changes in allowance for loan losses

Changes in the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):


	2017						2016						2015
	Non-PCI		PCI				Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total		Loans		Loans		Total
Balance, beginning of period	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300
Provision for loan losses		9,295		261		9,556		6,425		(834)		5,591		11,061		66		11,127
Loan charge-offs		(9,822)		—		(9,822)		(7,668)		(68)		(7,736)		(9,565)		(92)		(9,657)
Loan recoveries		1,685		150		1,835		894		125		1,019		2,094		124		2,218
Net loan (charge-offs) recoveries		(8,137)		150		(7,987)		(6,774)		57		(6,717)		(7,471)		32		(7,439)
Balance, end of period	$	14,902	$	1,529	$	16,431	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988

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


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2017:
Beginning balance	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Provision for loan losses		(118)		7,879		110		1		954		730		9,556
Charge-offs		(737)		(6,552)		—		(698)		(794)		(1,041)		(9,822)
Recoveries		191		492		63		518		254		317		1,835
Ending balance	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Allowance for loan losses at December 31, 2017 attributable to:
Loans individually evaluated for impairment	$	221	$	281	$	5	$	302	$	—	$	261	$	1,070
Loans collectively evaluated for impairment		305		48		5		264		29		84		735
Non-impaired loans collectively evaluated for impairment		4,230		4,379		504		1,644		1,166		1,174		13,097
Loans acquired with deteriorated credit quality (1)		500		336		4		540		149		—		1,529
Total allowance for loan losses	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Recorded investment (loan balance) at December 31, 2017:
Impaired loans individually evaluated for impairment	$	1,285	$	13,554	$	797	$	3,700	$	4	$	568	$	19,908
Impaired loans collectively evaluated for impairment		2,818		443		46		2,484		283		778		6,852
Non-impaired loans collectively evaluated for impairment		549,154		1,413,079		199,010		441,418		370,999		203,797		3,177,457
Loans acquired with deteriorated credit quality (1)		2,673		12,935		734		5,950		169		—		22,461
Total recorded investment (loan balance)	$	555,930	$	1,440,011	$	200,587	$	453,552	$	371,455	$	205,143	$	3,226,678

(1)


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2016:
Beginning balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Provision for loan losses		2,992		(1,041)		(183)		1,601		382		1,840		5,591
Charge-offs		(4,252)		(1,177)		(1)		(966)		(301)		(1,039)		(7,736)
Recoveries		263		264		94		174		100		124		1,019
Ending balance	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Allowance for loan losses at December 31, 2016 attributable to:
Loans individually evaluated for impairment	$	878	$	296	$	6	$	379	$	—	$	285	$	1,844
Loans collectively evaluated for impairment		4		13		2		225		23		71		338
Non-impaired loans collectively evaluated for impairment		4,539		2,684		337		1,968		877		1,157		11,562
Loans acquired with deteriorated credit quality (1)		499		232		—		357		30		—		1,118
Total allowance for loan losses	$	5,920	$	3,225	$	345	$	2,929	$	930	$	1,513	$	14,862
Recorded investment (loan balance) at December 31, 2016:
Impaired loans individually evaluated for impairment	$	6,504	$	18,275	$	63	$	2,920	$	—	$	670	$	28,432
Impaired loans collectively evaluated for impairment		44		123		21		2,109		213		661		3,171
Non-impaired loans collectively evaluated for impairment		447,762		945,497		165,091		242,127		269,492		190,148		2,260,117
Loans acquired with deteriorated credit quality (1)		3,517		5,720		12,150		6,557		312		—		28,256
Total recorded investment (loan balance)	$	457,827	$	969,615	$	177,325	$	253,713	$	270,017	$	191,479	$	2,319,976

PREMISES AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2017

PREMISES AND EQUIPMENT

Summary of premises and equipment

A summary of premises and equipment as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Land	$	16,109	$	14,314
Buildings and improvements		63,837		56,766
Furniture and equipment		25,843		21,419
Total		105,789		92,499
Accumulated depreciation		(29,627)		(25,807)
Premises and equipment, net	$	76,162	$	66,692

MORTGAGE SERVICING RIGHTS (Tables)

12 Months Ended

Dec. 31, 2017

MORTGAGE SERVICING RIGHTS

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

A summary of mortgage loans serviced for others as of December 31, 2017 and 2016 is as follows (in thousands):


	2017		2016
Commercial FHA mortgage loans	$	3,976,795	$	3,811,066
Residential mortgage loans		1,989,785		1,833,443
Total loans serviced for others	$	5,966,580	$	5,644,509

Changes in our mortgage servicing rights were as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands):




	2017		2016		2015
Mortgage servicing rights:
Balance, beginning of period	$	71,710	$	67,218	$	62,900
Servicing rights acquired – residential mortgage loans		1,933		—		—
Servicing rights transferred to held for sale - residential mortgage loans		(16,229)		—		—
Servicing rights capitalized – commercial FHA mortgage loans		6,287		6,805		4,318
Servicing rights capitalized – residential mortgage loans		1,789		3,828		5,015
Amortization – commercial FHA mortgage loans		(2,579)		(2,388)		(2,272)
Amortization – residential mortgage loans		(2,528)		(3,753)		(2,743)
Balance, end of period		60,383		71,710		67,218
Valuation allowances:
Balance, beginning of period		3,702		567		119
Additions		2,436		6,962		1,630
Reductions		(112)		(3,827)		(1,182)
Servicing rights transferred to held for sale - residential mortgage loans		(1,995)		—		—
Balance, end of period		4,031		3,702		567
Mortgage servicing rights, net	$	56,352	$	68,008	$	66,651
Fair value:
At beginning of period	$	68,008	$	66,700	$	62,781
At end of period	$	56,352	$	68,008	$	66,700

Schedule of summary of key assumptions


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
December 31, 2017:
Commercial FHA mortgage loans	0.12	%	3.67	%	30.3	8.27	%	$	1,000	10 - 14	%
Residential mortgage loans	0.26	%	3.93	%	23.2	11.52	%	$	71	8 - 13	%

December 31, 2016:
Commercial FHA mortgage loans	0.13	%	3.72	%	30.2	8.31	%	$	1,000	10 - 13	%
Residential mortgage loans	0.26	%	3.89	%	24.2	9.72	%	$	60	9 - 11	%

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2017

GOODWILL AND INTANGIBLE ASSETS

Schedule of intangible assets

The following table summarizes the carrying amount of goodwill by segment at December 31, 2017 and 2016 (in thousands).


	2017		2016
Banking	$	82,986	$	35,627
Commercial FHA Origination and Servicing		10,892		10,892
Other		4,746		2,317
Total goodwill	$	98,624	$	48,836

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of December 31, 2017 and 2016 are summarized as follows (in thousands):


	2017						2016
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	31,612	$	(18,943)	$	12,669	$	20,542	$	(16,181)	$	4,361
Customer relationship intangibles		7,471		(3,208)		4,263		5,471		(2,645)		2,826
Total intangible assets	$	39,083	$	(22,151)	$	16,932	$	26,013	$	(18,826)	$	7,187

Schedule of estimated future amortization expense of intangible assets

Estimated amortization expense for future years is as follows (in thousands):


	Amount
Year ending December 31,
2018	$	3,694
2019		3,053
2020		2,429
2021		1,971
2022		1,566
Thereafter		4,219
Total	$	16,932

DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2017

DERIVATIVE INSTRUMENTS

Schedule of derivative instruments, fair value and notional amounts


	Notional Amount				Fair Value Gain
	2017		2016		2017		2016
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	345,152	$	264,359	$	6,331	$	6,253
Forward commitments to sell mortgage-backed securities		372,824		301,788		31		125
Total	$	717,976	$	566,147	$	6,362	$	6,378

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2017

DEPOSITS

Schedule Of interest and non interest bearing deposits

The following table summarizes the classification of deposits as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Noninterest-bearing demand	$	724,443	$	562,333
Interest-bearing:
Checking		785,934		656,248
Money market		646,426		399,851
Savings		281,212		166,910
Time		693,074		619,024
Total deposits	$	3,131,089	$	2,404,366

Schedule of maturities of time deposits

As of December 31, 2017, the scheduled maturities of time deposits are as follows (in thousands):


	Amount
Year ending December 31,
2018	$	414,739
2019		234,347
2020		25,792
2021		9,753
2022		8,442
Thereafter		1
Total	$	693,074

SHORT-TERM BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2017

SHORT-TERM BORROWINGS

Schedule of short term borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2017 and 2016 (in thousands):


	Repurchase Agreements
	2017			2016
Outstanding at period-end	$	156,126		$	131,557
Average amount outstanding		163,461			130,228
Maximum amount outstanding at any month end		196,278			168,369
Weighted average interest rate:
During period		0.23	%		0.23	%
End of period		0.28	%		0.21	%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2017

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) advances

The following table summarizes our FHLB advances and other borrowings as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Midland States Bancorp, Inc.
Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 3.63% at December 31, 2017 – maturing through May 25, 2020	$	37,113	$	—
Series G redeemable preferred stock - 181 shares at $1,000 per share		181		—
Midland States Bank
FHLB advances – fixed rate, fixed term of $145.0 million and $112.5 million, at rates averaging 1.35% and 1.00% at December 31, 2017 and 2016, respectively – maturing through June 2021, and putable fixed rate of $305.0 million and $125.0 million at rates averaging 1.29% and 0.79% at December 31, 2017 and 2016, respectively, – maturing through December 2024 with call provisions through December 2020		450,137		237,500
FHLB advances – variable rate, fixed term, at rates averaging 1.20% at December 31, 2017 – maturing through March 2018		9,000		—
Other		5		18
Total FHLB advances and other borrowings	$	496,436	$	237,518

Schedule of payments over the next five years

Payments over the next five years for FHLB advances and other borrowings are as follows (in thousands):


	Amount
2018	$	144,931
2019		15,739
2020		25,747
2021		55,019
2022		150,000
Thereafter		105,000
Total	$	496,436

SUBORDINATED DEBT (Tables)

12 Months Ended

Dec. 31, 2017

SUBORDINATED DEBT

Schedule of summary of company's subordinated debt

The following table summarizes the Company’s subordinated debt as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025	$	39,800	$	39,729
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,805		14,779
Subordinated debt issued October 2017 - fixed interest rate of 6.25% for the first five years through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 maturing October 15, 2027		39,367		—
Total subordinated debt	$	93,972	$	54,508

TRUST PREFERRED DEBENTURES (Tables)

12 Months Ended

Dec. 31, 2017

TRUST PREFERRED DEBENTURES

Summary of trust preferred debentures

The following table summarizes the Company’s trust preferred debentures as of December 31, 2017 and 2016 (in thousands):


	2017		2016
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 4.11% and 3.63% at December 31, 2017 and 2016, respectively – $10,000 maturing April 23, 2034	$	9,960	$	9,957
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 4.23% and 3.74%, at December 31, 2017 and 2016, respectively – $3,000 maturing January 23, 2034		2,058		1,996
Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 3.34% and 2.71% at December 31, 2017 and 2016, respectively – $20,000 maturing December 31, 2036		13,292		13,141
Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.98% and 2.42% at December 31, 2017 and 2016, respectively – $20,000 maturing September 6, 2037		12,464		12,311
Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 4.25% at December 31, 2017 - $10,000 maturing June 17, 2034		7,605		—
Total trust preferred debentures	$	45,379	$	37,405

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

INCOME TAXES

Schedule of components of income taxes

The components of income taxes for the years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):


	2017		2016		2015
Federal:
Current	$	(696)	$	1,718	$	3,500
Deferred		11,632		11,381		5,604
State:
Current		(921)		2,630		1,117
Deferred		400		3,160		870
Total income tax expense	$	10,415	$	18,889	$	11,091

Schedule of reconciliation of income tax expense

The Company’s income tax expense differed from the statutory federal rate of 35% for the years ended December 31, 2017, 2016 and 2015 as follows (in thousands):


	2017		2016		2015
Expected income taxes	$	9,244	$	17,648	$	12,424
Less income tax effect of:
Tax exempt interest		(1,682)		(1,670)		(1,934)
Interest expense disallowance		47		33		29
State tax, net of federal benefit		(110)		3,132		1,292
Increase in cash surrender value of life insurance policies		(969)		(1,007)		(516)
Indemnification income		—		—		(311)
Equity-based compensation benefit		(1,297)		(366)		—
Non-deductible transaction costs		389		—		—
Valuation allowance		(229)		631		—
Effect of federal rate change enacted in 2017		4,540		—		—
Other		482		488		107
Actual income tax expense	$	10,415	$	18,889	$	11,091

Schedule of deferred tax (liabilities) assets, net


	2017		2016
Assets:
Allowance for loan losses	$	4,405	$	5,766
Deferred compensation		1,896		2,136
Loans		3,896		1,972
Write-down of other real estate owned		776		70
Tax credits		1,501		3,106
Nonaccrual interest		708		1,007
Unrealized loss on securities		—		387
Intangible assets		—		292
Stock compensation		907		689
Deferred loan fees, net of costs		133		—
Net operating losses		20,097		—
Other, net		763		777
Deferred tax assets		35,082		16,202
Valuation allowance		(409)		(631)
Deferred tax assets, net of valuation allowance		34,673		15,571
Liabilities:
Premises and equipment		1,657		1,268
Unrealized gain on securities		412		—
Mortgage servicing rights		11,424		15,092
Fair value adjustment on trust preferred debentures		4,700		6,023
Federal Home Loan Bank stock dividends		310		227
Deferred loan fees, net of costs		—		136
Intangible assets		2,729		—
Accounting method changes		399		1,156
Prepaid expenses		796		—
Other, net		222		267
Deferred tax liabilities		22,649		24,169
Deferred tax assets (liabilities), net	$	12,024	$	(8,598)

STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2017

STOCK BASED COMPENSATION

Schedule of fair value of each grant which is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions


	2017		2016		2015
Dividend yield	2.50	%	3.00	%	3.14	%
Expected volatility	16.63		16.98		16.94
Risk free interest rate	2.12		1.64		1.93
Expected life	6.25	years	6.25	years	6.25	years

Summary of our stock option plan and changes made


	2017					2016
				Weighted					Weighted
		Weighted		average			Weighted		average
		average		remaining			average		remaining
		exercise		contractual			exercise		contractual
	Shares	price		life		Shares	price		life
Options outstanding, beginning of year	1,319,259	$	18.73			1,233,606	$	17.52
Options granted	31,259		32.89			182,118		26.15
Options exercised	(179,760)		16.02			(66,024)		16.01
Options forfeited	(22,221)		26.08			(30,441)		20.15
Options outstanding, end of year	1,148,537	$	19.39	5.8	years	1,319,259	$	18.73	6.3	years
Options exercisable	673,706	$	17.55	4.6	years	729,483	$	16.37	4.6	years
Options vested and expected to vest	1,088,853	$	19.27	5.7	years	1,245,713	$	18.56	6.2	years

Summary of information about the Company's nonvested stock option activity


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2016	589,776	$	2.73
Granted	31,259		4.33
Vested	(128,530)		2.73
Forfeited	(17,674)		3.05
Nonvested at December 31, 2017	474,831	$	2.83

Summary of the activity for restricted stock awards


		Weighted
		average
	Number	grant date
	outstanding	fair value
Nonvested at December 31, 2016	108,647	$	25.16
Granted during the year	83,916		31.03
Vested during the year	(37,666)		23.29
Forfeited during the year	(5,529)		27.76
Nonvested at December 31, 2017	149,368	$	28.83

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2017

EARNINGS PER SHARE

Schedule of basic and diluted earnings per common share

Presented below are the calculations for basic and diluted earnings per common share for the years ended December 31, 2017, 2016 and 2015 (in thousands, except for share and per share data):




	2017		2016		2015
Net income	$	16,056	$	31,542	$	24,324
Preferred stock dividends		(184)		—		—
Amortization of preferred stock premium		101		—		—
Net income available to common shareholders		15,973		31,542		24,324
Common shareholder dividends		(13,922)		(9,797)		(7,642)
Unvested restricted stock award dividends		(86)		(56)		(50)
Undistributed earnings to unvested restricted stock awards		(11)		(110)		(108)
Undistributed earnings to common shareholders	$	1,954	$	21,579	$	16,524
Basic
Distributed earnings to common shareholders	$	13,922	$	9,797	$	7,642
Undistributed earnings to common shareholders		1,954		21,579		16,524
Total common shareholders earnings, basic	$	15,876	$	31,376	$	24,166
Diluted
Distributed earnings to common shareholders	$	13,922	$	9,797	$	7,642
Undistributed earnings to common shareholders		1,954		21,579		16,524
Total common shareholders earnings		15,876		31,376		24,166
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		—		2		2
Total common shareholders earnings, diluted	$	15,876	$	31,378	$	24,168
Weighted average common shares outstanding, basic		17,781,631		14,130,552		11,902,455
Options and warrants		501,583		298,287		209,948
Weighted average common shares outstanding, diluted		18,283,214		14,428,839		12,112,403
Basic earnings per common share	$	0.89	$	2.22	$	2.03
Diluted earnings per common share		0.87		2.17		2.00

CAPITAL REQUIREMENTS (Tables)

12 Months Ended

Dec. 31, 2017

CAPITAL REQUIREMENTS

Schedule of actual and required capital amounts and ratios

At December 31, 2017 and 2016, the Company’s and the Bank’s actual and required capital ratios were as follows (dollars in thousands):


	2017
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	478,914	13.26	%	$	288,895	8.00	%		N/A	N/A
Midland States Bank		445,285	12.32			289,252	8.00		$	361,565	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		367,841	10.19			216,671	6.00			N/A	N/A
Midland States Bank		428,184	11.84			216,939	6.00			289,252	8.00
Common equity tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		304,974	8.45			162,503	4.50			N/A	N/A
Midland States Bank		428,184	11.84			162,704	4.50			235,017	6.50
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		367,841	8.63			170,566	4.00			N/A	N/A
Midland States Bank		428,184	10.04			170,608	4.00			213,260	5.00


	2016
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	374,955	13.85	%	$	216,612	8.00	%		N/A	N/A
Midland States Bank		329,759	12.17			216,773	8.00		$	270,966	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		305,283	11.27			162,459	6.00			N/A	N/A
Midland States Bank		314,595	11.61			162,580	6.00			216,773	8.00
Common equity tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		253,273	9.35			121,844	4.50			N/A	N/A
Midland States Bank		314,595	11.61			121,935	4.50			176,128	6.50
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		305,283	9.76			125,076	4.00			N/A	N/A
Midland States Bank		314,595	10.05			125,271	4.00			156,589	5.00

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured and recorded at fair value


	2017
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	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	$	27,718	$	27,718	$	—	$	—
Government sponsored entity debt securities		25,211		—		25,211		—
Agency mortgage-backed securities		232,387		—		232,387		—
State and municipal securities		102,567		—		102,567		—
Corporate securities		59,812		—		55,033		4,779
Equity securities		2,830		—		2,830		—
Loans held for sale		50,089		—		50,089		—
Interest rate lock commitments		6,331		—		6,331		—
Forward commitments to sell mortgage-backed securities		31		—		31		—
Interest rate swap contracts		17		—		17		—
Total	$	506,993	$	27,718	$	474,496	$	4,779
Liabilities
Interest rate swap contracts	$	17	$	—	$	17	$	—

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	56,352	$	—	$	—	$	56,352
Mortgage servicing rights held for sale		10,176		10,176		—		—
Impaired loans		9,385		—		7,631		1,754
Other real estate owned		801		—		801		—
Assets held for sale		3,358		—		3,358		—


	2016
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	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	$	75,901	$	75,901	$	—	$	—
Government sponsored entity debt securities		7,688		—		7,688		—
Agency mortgage-backed securities		90,070		—		90,070		—
Non-agency mortgage-backed securities		1		—		—		1
State and municipal securities		25,274		—		25,274		—
Corporate securities		47,405		—		39,925		7,480
Loans held for sale		70,565		—		70,565		—
Interest rate lock commitments		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		—		125		—
Total	$	323,282	$	75,901	$	239,900	$	7,481
Liabilities
None

Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	$	68,008	$	—	$	—	$	68,008
Impaired loans		10,202		—		6,635		3,567
Other real estate owned		165		—		165		—
Assets held for sale		1,550		—		1,550		—

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

The following table presents losses recognized on assets measured on a non‑recurring basis for the years ended December 31, 2017, 2016 and 2015 (in thousands):




	2017		2016		2015
Mortgage servicing rights	$	2,324	$	3,135	$	448
Mortgage servicing rights held for sale		4,059		—		—
Impaired loans		7,096		2,459		1,589
Other real estate owned		253		247		114
Assets held for sale		1,516		1,646		—
Total loss on assets measured on a nonrecurring basis	$	15,248	$	7,487	$	2,151

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

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2017 (in thousands):


			Non-Agency
	Corporate		Mortgage-Backed
	Securities		Securities
Balance, beginning of period	$	7,480	$	1
Total realized in earnings (1)		289		—
Total unrealized in other comprehensive income		264		—
Net settlements (principal and interest)		(3,254)		(1)
Balance, end of period	$	4,779	$	—

(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 December 31, 2017 (in thousands):

Non-recurring

Valuation

Unobservable

fair value measurements

Fair Value

technique

input / assumptions

Range (weighted average)

Mortgage servicing rights

56,352

Discounted cash flow

Prepayment speed

6.36% - 42.90% (8.83%)

Discount rate

8.00% - 14.50% (11.18%)

Impaired loans

1,754

Discounted cash flow

Discount rate

4.84% - 18.24% (8.64%)

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


	2017						2016
	Aggregate				Contractual		Aggregate				Contractual
	fair value		Difference		principal		fair value		Difference		principal
Residential loans held for sale	$	12,241	$	374	$	11,867	$	25,678	$	315	$	25,363
Commercial loans held for sale		37,846		343		37,503		44,887		993		43,894
Total loans held for sale	$	50,087	$	717	$	49,370	$	70,565	$	1,308	$	69,257


	2017		2016
Residential loans held for sale	$	(74)	$	(491)
Commercial loans held for sale		(650)		705
Total loans held for sale	$	(724)	$	214

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

The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of December 31, 2017 and 2016 (in thousands):


	2017
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	214,519	$	214,519	$	214,519	$	—	$	—
Federal funds sold		683		683		683		—		—
Investment securities available for sale		450,525		450,525		27,718		418,028		4,779
Nonmarketable equity securities		34,796		34,796		—		34,796		—
Loans, net		3,210,247		3,200,016		—		—		3,200,016
Loans held for sale		50,089		50,089		—		50,089		—
Accrued interest receivable		11,715		11,715		—		11,715		—
Interest rate lock commitments		6,331		6,331		—		6,331		—
Forward commitments to sell mortgage-backed securities		31		31		—		31		—
Interest rate swap contracts		17		17		—		17		—
Liabilities
Deposits	$	3,131,089	$	3,127,626	$	—	$	3,127,626	$	—
Short-term borrowings		156,126		156,126		—		156,126		—
FHLB and other borrowings		496,436		494,634		—		494,634		—
Subordinated debt		93,972		90,860		—		90,860		—
Trust preferred debentures		45,379		46,069		—		46,069		—
Accrued interest payable		2,531		2,531		—		2,531		—
Interest rate swap contracts		17		17		—		17		—


	2016
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	189,543	$	189,543	$	189,543	$	—	$	—
Federal funds sold		1,173		1,173		1,173		—		—
Investment securities available for sale		246,339		246,339		75,901		162,957		7,481
Investment securities held to maturity		78,672		81,952		—		81,952		—
Nonmarketable equity securities		19,485		19,485		—		19,485		—
Loans, net		2,305,114		2,305,206		—		—		2,305,206
Loans held for sale		70,565		70,565		—		70,565		—
Accrued interest receivable		8,202		8,202		—		8,202		—
Interest rate lock commitments		6,253		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		125		—		125		—
Liabilities
Deposits	$	2,404,366	$	2,404,231	$	—	$	2,404,231	$	—
Short-term borrowings		131,557		131,557		—		131,557		—
FHLB and other borrowings		237,518		236,736		—		236,736		—
Subordinated debt		54,508		49,692		—		49,692		—
Trust preferred debentures		37,405		33,054		—		33,054		—
Accrued interest payable		1,045		1,045		—		1,045		—

- 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

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

+ References + Details

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables)

12 Months Ended

Dec. 31, 2017

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Projected minimum rental payments under leases

The projected minimum rental payments under the terms of the leases as of December 31, 2017 are as follows (in thousands):


	Amount
Year ending December 31:
2018	$	2,743
2019		2,460
2020		2,152
2021		2,039
2022		1,793
Thereafter		3,651
Total estimated lease payments	$	14,838

Schedule of Loan Commitments

Loan commitments as of December 31, 2017 and 2016 are as follows (in thousands):


	2017		2016
Commitments to extend credit	$	568,356	$	483,345
Financial guarantees – standby letters of credit		142,189		89,233

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

SEGMENT INFORMATION

Schedule of segment financial information

Selected business segment financial information as of and for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
December 31, 2017
Net interest income (expense)	$	135,974	$	312	$	(6,624)	$	129,662
Provision for loan losses		9,556		—		—		9,556
Noninterest income		32,223		18,570		8,569		59,362
Noninterest expense		127,981		13,729		11,287		152,997
Income (loss) before income taxes (benefit)		30,660		5,153		(9,342)		26,471
Income taxes (benefit)		17,102		(1,033)		(5,654)		10,415
Net income (loss)	$	13,558	$	6,186	$	(3,688)	$	16,056
Total assets	$	4,403,517	$	99,685	$	(90,501)	$	4,412,701

December 31, 2016
Net interest income (expense)	$	109,950	$	1,003	$	(5,699)	$	105,254
Provision for loan losses		5,591		—		—		5,591
Noninterest income		47,646		22,979		1,432		72,057
Noninterest expense		100,053		15,104		6,132		121,289
Income (loss) before income taxes (benefit)		51,952		8,878		(10,399)		50,431
Income taxes (benefit)		17,129		3,332		(1,572)		18,889
Net income (loss)	$	34,823	$	5,546	$	(8,827)	$	31,542
Total assets	$	3,225,765	$	129,943	$	(121,985)	$	3,233,723

December 31, 2015
Net interest income (expense)	$	107,825	$	1,762	$	(4,680)	$	104,907
Provision for loan losses		11,127		—		—		11,127
Noninterest income		34,751		20,148		4,583		59,482
Noninterest expense		95,795		16,232		5,820		117,847
Income (loss) before income taxes (benefit)		35,654		5,678		(5,917)		35,415
Income taxes (benefit)		10,626		2,271		(1,806)		11,091
Net income (loss)	$	25,028	$	3,407	$	(4,111)	$	24,324
Total assets	$	2,886,539	$	89,242	$	(90,957)	$	2,884,824

PARENT COMPANY ONLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

PARENT COMPANY ONLY FINANCIAL INFORMATION

Schedule of condensed balance sheets


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2017		2016
Assets:
Cash	$	60,424	$	38,803
Investment in common stock of subsidiaries		563,541		380,474
Accrued income taxes receivable		3,300		17
Other assets		2,303		2,047
Total assets	$	629,568	$	421,341
Liabilities:
Subordinated debt	$	93,972	$	54,508
Trust preferred debentures		45,379		37,405
Other borrowings		37,294		—
Deferred tax liabilities, net		252		5,037
Other liabilities		3,126		2,621
Total liabilities		180,023		99,571
Shareholders’ equity		449,545		321,770
Total liabilities and shareholders’ equity	$	629,568	$	421,341

Schedule of condensed Statement of income


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2017		2016		2015
Dividends from subsidiaries	$	19,500	$	—	$	14,500
Other income		4		428		1,070
Interest expense		(7,162)		(5,699)		(4,680)
Other expense		(1,295)		(1,130)		(132)
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries		11,047		(6,401)		10,758
Income tax benefit		6,080		1,687		1,806
Income before income taxes		17,127		(4,714)		12,564
Equity in undistributed (loss) income of subsidiaries		(1,071)		36,256		11,760
Net income	$	16,056	$	31,542	$	24,324

Schedule of condensed cash flows


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	16,056	$	31,542	$	24,324
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed loss (income) of subsidiaries		1,071		(36,256)		(11,760)
Amortization of restricted stock awards		836		555		517
Compensation expense for stock option grants		548		492		413
Change in other assets		(3,226)		4,237		(3,559)
Change in other liabilities		1,649		225		(8,426)
Net cash provided by operating activities		16,934		795		1,509
Cash flows from investing activities:
Net cash paid in acquisition		(60,457)		—		(20,053)
Capital injection to subsidiaries		(350)		(25,250)		(30,000)
Net cash used in investing activities		(60,807)		(25,250)		(50,053)
Cash flows from financing activities:
Payment made on subordinated debt		—		(8,000)		—
Proceeds from issuance of subordinated debt, net of issuance costs		39,354		—		55,325
Proceeds from other borrowings, net of issuance costs		39,964		—		—
Payments made on other borrowings		(2,857)		—		(14,000)
Cash dividends paid on preferred stock		(184)		(9,853)		(7,692)
Cash dividends paid on common stock		(14,008)		—		—
Proceeds from issuance of common stock in initial public offering, net of issuance costs		—		71,475		—
Proceeds from issuance of common stock under employee benefit plans		3,225		1,318		470
Net cash provided by financing activities		65,494		54,940		34,103
Net increase (decrease) in cash		21,621		30,485		(14,441)
Cash:
Beginning of year		38,803		8,318		22,759
End of year	$	60,424	$	38,803	$	8,318

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2017

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

Schedule of unaudited quarterly condensed financial information

The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2017 and 2016 (in thousands, except for per share data):


	2017 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	31,839	$	34,528	$	43,246	$	43,500
Interest expense		4,378		5,128		6,481		7,464
Net interest income		27,461		29,400		36,765		36,036
Provision for loan losses		1,533		458		1,489		6,076
Net interest income after provision for loan losses		25,928		28,942		35,276		29,960
Noninterest income		16,342		13,619		15,403		13,998
Noninterest expense		30,797		37,645		48,363		36,192
Income before income taxes		11,473		4,916		2,316		7,766
Income taxes		2,983		1,377		280		5,775
Net income		8,490		3,539		2,036		1,991
Preferred stock dividends		—		19		27		37
Net income available to common shareholders	$	8,490	$	3,520	$	2,009	$	1,954
Per common share data:
Basic earnings per common share	$	0.54	$	0.21	$	0.10	$	0.10
Diluted earnings per common share		0.52		0.20		0.10		0.10


	2016 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,967	$	32,115	$	31,186	$	29,981
Interest expense		3,926		4,126		3,921		4,022
Net interest income		24,041		27,989		27,265		25,959
Provision for loan losses		1,125		629		1,392		2,445
Net interest income after provision for loan losses		22,916		27,360		25,873		23,514
Noninterest income		12,618		14,016		14,937		30,486
Noninterest expense		27,638		30,904		28,657		34,090
Income before income taxes		7,896		10,472		12,153		19,910
Income taxes		2,777		3,683		4,102		8,327
Net income	$	5,119	$	6,789	$	8,051	$	11,583
Per common share data:
Basic earnings per common share	$	0.43	$	0.51	$	0.51	$	0.74
Diluted earnings per common share		0.42		0.50		0.51		0.72

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)				12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 06, 2016 USD ($) shares	Jun. 06, 2016 USD ($) shares	May 24, 2016 USD ($) shares	Dec. 31, 2018	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares
Initial Public Offering
Proceeds from Issuance Initial Public Offering	$ 71,500,000
Common stock, shares issued \| shares					19,122,049	15,483,499
Indemnification Asset Due from FDIC
Liabilities for unfunded commitments					$ 670,000	$ 302,000
Impact of Recently Issued Accounting Standards
Effective income tax rate					35.00%
Forecast
Impact of Recently Issued Accounting Standards
Effective income tax rate				21.00%
Minimum
Lease Financing
Percentage of residual value					3
Goodwill and Intangible Assets
Other intangible assets amortized over a period					1 year
Maximum
Lease Financing
Percentage of residual value					15
Goodwill and Intangible Assets
Other intangible assets amortized over a period					20 years
Premises \| Minimum
Premises and Equipment
Estimated useful lives					10 years
Premises \| Maximum
Premises and Equipment
Estimated useful lives					40 years
Equipment \| Minimum
Premises and Equipment
Estimated useful lives					3 years
Equipment \| Maximum
Premises and Equipment
Estimated useful lives					10 years
IPO
Initial Public Offering
Proceeds from Issuance Initial Public Offering			$ 67,000,000
Common stock, shares issued \| shares			3,044,252
Over-Allotment Option
Initial Public Offering
Proceeds from Issuance Initial Public Offering		$ 12,000,000
Common stock, shares issued \| shares	545,813	545,813

ACQUISITIONS - Centrue Financial Corp (Details) $ / shares in Units, $ in Thousands		3 Months Ended	12 Months Ended
	Jun. 09, 2017 USD ($) item shares	Dec. 31, 2017 USD ($)	Dec. 31, 2017 USD ($) $ / shares	Dec. 31, 2016 USD ($) $ / shares	Dec. 31, 2015 USD ($)
Business Acquisition
Amortization of Intangible Assets			$ 3,325	$ 2,147	$ 2,460
Liabilities assumed:
Goodwill		$ 98,624	98,624	48,836
Centrue
Business Acquisition
Number of banking centers \| item	20
Total consideration	$ 176,600
Cash consideration	61,000
Transaction and integration costs		16,000	16,000
Adjustment to increase goodwill		$ 1,300
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Cash and cash equivalents	42,461
Investment securities available for sale	149,013
Loans	679,946
Loans held for sale	531
Premises and equipment	17,147
Other real estate owned	4,759
Nonmarketable equity securities	8,168
Accrued interest receivable	2,376
Mortgage servicing rights	1,933
Intangible assets	11,070
Cash surrender value of life insurance policies	36,349
Deferred tax assets, net	34,284
Other assets	2,256
Total assets acquired	990,293
Liabilities assumed:
Deposits	739,867
Short-term borrowings	14,434
FHLB advances and other borrowings	95,332
Trust preferred debentures	7,565
Accrued interest payable	275
Other liabilities	3,600
Total liabilities assumed	861,073
Net assets acquired	129,220
Goodwill	47,359
Total consideration paid	$ 176,579
Business Acquisition, Pro Forma Information
Revenue (1)			206,885	220,185
Net income			$ 17,290	$ 37,001
Diluted earnings per common share \| $ / shares			$ 0.87	$ 2.09
Centrue \| Core deposits
Business Acquisition
Amortization period	8 years
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets	$ 11,100
Centrue \| Common stock
Business Acquisition
Share consideration \| shares	3,219,238
Centrue \| Series G Preferred Stock
Business Acquisition
Share consideration \| shares	181
Centrue \| Series H Preferred Stock
Business Acquisition
Share consideration \| shares	2,635.5462
Acquired receivables subject to ASC 310-30 \| Centrue
Acquired loan data
Fair value of acquired loans at acquisition date	$ 11,428
Gross contractual amounts receivable at acquisition date	20,476
Best estimate at acquisition date of contractual cash flows not expected to be collected	7,180
Acquired receivables not subject to ASC 310-30 [member] \| Centrue
Acquired loan data
Fair value of acquired loans at acquisition date	668,518
Gross contractual amounts receivable at acquisition date	821,338
Best estimate at acquisition date of contractual cash flows not expected to be collected	$ 4,518

ACQUISITIONS - CedarPoint (Details) - USD ($) $ in Thousands	Mar. 28, 2017	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition
Goodwill		$ 98,624	$ 48,836
CedarPoint
Business Acquisition
Assets under administration	$ 180,000
Total consideration	3,700
Consideration transferred, value of shares	18
Additional consideration as accrual in other liabilities	345
Goodwill	2,400
CedarPoint \| Customer relationship
Business Acquisition
Intangible assets	$ 2,000
Amortization period	12 years
Common stock \| CedarPoint \| Customer relationship
Business Acquisition
Share consideration	102,000

ACQUISITIONS - Sterling (Details) - USD ($) $ in Thousands	Nov. 10, 2016	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition
Goodwill		$ 98,624	$ 48,836
Sterling
Business Acquisition
Assets under administration	$ 400,000
Cash transferred	5,200
Goodwill	2,300
Sterling \| Customer relationship
Business Acquisition
Intangible assets	$ 2,300
Amortization period	20 years

INVESTMENT SECURITIES AVAILABLE FOR SALE - Classified (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Investment securities classified as available for sale
Amortized cost	$ 448,124,000	$ 247,525,000
Gross unrealized gains	5,782,000	848,000
Gross unrealized losses	3,381,000	2,034,000
Investment securities available for sale	450,525,000	246,339,000
Amortized cost		78,672,000
Fair value	0	81,952,000
Gross realized gains	242,000	15,500,000	$ 368,000
Transfer of investment securities held to maturity to investment securities available for sale	64,520,000
Held-to-maturity securities, transferred to available for sale, at fair value	67,900,000
Unrealized gains on investment securities available for sale at time of transfer	3,400,000
U.S. Treasury securities
Investment securities classified as available for sale
Amortized cost	28,005,000	75,973,000
Gross unrealized losses	287,000	72,000
Investment securities available for sale	27,718,000	75,901,000
Government sponsored entity debt securities
Investment securities classified as available for sale
Amortized cost	25,445,000	7,653,000
Gross unrealized gains	41,000	57,000
Gross unrealized losses	275,000	22,000
Investment securities available for sale	25,211,000	7,688,000
Agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost	233,606,000	90,629,000
Gross unrealized gains	882,000	373,000
Gross unrealized losses	2,101,000	932,000
Investment securities available for sale	232,387,000	90,070,000
Non-agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost		1,000
Investment securities available for sale		1,000
State and municipal securities
Investment securities classified as available for sale
Amortized cost	99,449,000	25,826,000
Gross unrealized gains	3,632,000	15,000
Gross unrealized losses	514,000	567,000
Investment securities available for sale	102,567,000	25,274,000
Corporate Securities
Investment securities classified as available for sale
Amortized cost	58,904,000	47,443,000
Gross unrealized gains	1,087,000	403,000
Gross unrealized losses	179,000	441,000
Investment securities available for sale	59,812,000	47,405,000
Equity securities
Investment securities classified as available for sale
Amortized cost	2,715,000
Gross unrealized gains	140,000
Gross unrealized losses	25,000
Investment securities available for sale	$ 2,830,000
State and municipal securities
Investment securities classified as available for sale
Amortized cost		78,672,000
Gross unrecognized gains		3,517,000
Gross unrecognized losses		237,000
Fair value		$ 81,952,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Continuous unrealized loss position (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Securities available for sale:
Less than 12 Months, Fair value	$ 205,976,000	$ 169,216,000
Less than 12 Months, Unrealized loss	2,467,000	1,925,000
12 Months or more, Fair value	36,842,000	8,714,000
12 Months or more, Unrealized loss	914,000	109,000
Total, Fair value	242,818,000	177,930,000
Total, Unrealized loss	$ 3,381,000	$ 2,034,000
Unrealized loss
Number of securities, unrealized losses \| item	173	107
Aggregate depreciation	1.37%	1.13%
Other than temporary impairment:
Other than temporary impairment, recognized as losses	$ 0
U.S. Treasury securities
Securities available for sale:
Less than 12 Months, Fair value	19,758,000	$ 75,901,000
Less than 12 Months, Unrealized loss	251,000	72,000
12 Months or more, Fair value	7,960,000
12 Months or more, Unrealized loss	36,000
Total, Fair value	27,718,000	75,901,000
Total, Unrealized loss	287,000	72,000
Government sponsored entity debt securities
Securities available for sale:
Less than 12 Months, Fair value	24,168,000	4,107,000
Less than 12 Months, Unrealized loss	275,000	22,000
Total, Fair value	24,168,000	4,107,000
Total, Unrealized loss	275,000	22,000
Agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	124,192,000	57,882,000
Less than 12 Months, Unrealized loss	1,500,000	930,000
12 Months or more, Fair value	19,530,000	402,000
12 Months or more, Unrealized loss	601,000	2,000
Total, Fair value	143,722,000	58,284,000
Total, Unrealized loss	2,101,000	932,000
State and municipal securities
Securities available for sale:
Less than 12 Months, Fair value	29,338,000	20,215,000
Less than 12 Months, Unrealized loss	331,000	567,000
12 Months or more, Fair value	5,889,000
12 Months or more, Unrealized loss	183,000
Total, Fair value	35,227,000	20,215,000
Total, Unrealized loss	514,000	567,000
Corporate Securities
Securities available for sale:
Less than 12 Months, Fair value	5,917,000	11,111,000
Less than 12 Months, Unrealized loss	85,000	334,000
12 Months or more, Fair value	3,463,000	8,312,000
12 Months or more, Unrealized loss	94,000	107,000
Total, Fair value	9,380,000	19,423,000
Total, Unrealized loss	179,000	$ 441,000
Equity securities
Securities available for sale:
Less than 12 Months, Fair value	2,603,000
Less than 12 Months, Unrealized loss	25,000
Total, Fair value	2,603,000
Total, Unrealized loss	$ 25,000
Non-agency mortgage-backed securities
Other than temporary impairment:
Number of other than temporary impairment securities \| item			3
Other than temporary impairment, recognized as losses			$ 461,000
Covered non-agency mortgage-backed securities
Other than temporary impairment:
Number of other than temporary impairment securities \| item		3
Other than temporary impairment, recognized as losses		$ 824,000

INVESTMENT SECURITIES HELD TO MATURITY - Continuous unrealized loss position (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) item
Unrecognized loss
Number of securities, unrecognized losses \| item	47
Aggregate depreciation	1.40%
State and municipal securities
Securities held to maturity:
Less than 12 Months, Fair value	$ 13,991
Less than 12 Months, Unrecognized loss	140
12 Months or more, Fair value	2,699
12 Months or more, Unrecognized loss	97
Total, Fair value	16,690
Total, Unrealized loss	$ 237

INVESTMENT SECURITIES AVAILABLE FOR SALE - Amortized cost and fair value (Details) - USD ($)		12 Months Ended
	Oct. 04, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Amortized cost of available-for-sale securities, by contractual maturity
Within one year		$ 17,648,000
One to five years		64,534,000
Five to ten years		122,716,000
After ten years		240,511,000
Equity securities		2,715,000
Total, single maturity date		448,124,000
Fair Value of available-for-sale securities, by contractual maturity
Within one year		17,600,000
One to five years		64,653,000
Five to ten years		126,068,000
After ten years		239,374,000
Equity Securities		2,830,000
Total, single maturity date		450,525,000
Proceeds from Sale of Available-for-sale Securities
Proceed from sales		22,595,000	$ 115,999,000	$ 62,751,000
Gross realized gains/losses
Gross realized gains		242,000	15,500,000	368,000
Investment securities available for sale		450,525,000	246,339,000
Gross realized losses		20,000	837,000	$ 175,000
Agency mortgage-backed securities
Gross realized gains/losses
Investment securities available for sale		$ 232,387,000	90,070,000
Non-agency mortgage-backed securities
Gross realized gains/losses
Investment securities available for sale			$ 1,000
Covered non-agency mortgage-backed securities
Gross realized gains/losses
Gross realized gains	$ 14,300,000
Investment securities available for sale	$ 72,100,000

LOANS - Summary of loans (Details) - USD ($) $ in Thousands	12 Months Ended
LOANS - Summary of loans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of loans
Loans	$ 3,226,678	$ 2,319,976
Loans, additional information
Net deferred loan fees	10,100	3,100
Unearned discounts		20,700
Loans held for sale	50,089	70,565
Proceeds from sales of loans held for sale	815,471	1,184,739	$ 1,002,770
Directors, executive officers, principal shareholders and affiliates
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Loans outstanding to related parties	22,400	26,500
New loans to related parties and other additions	4,000	16,100
Repayments from related parties and other reductions	8,100	28,800
Commercial real estate
Summary of loans
Loans	2,196,528	1,604,767
Commercial real estate \| Commercial
Summary of loans
Loans	555,930	457,827
Commercial real estate \| Commercial real estate
Summary of loans
Loans	1,440,011	969,615
Commercial real estate \| Construction and land development
Summary of loans
Loans	$ 200,587	177,325
Other loan portfolio \| Maximum
Loans, additional information
Term of lease	4 years
Other loan portfolio \| Residential real estate
Summary of loans
Loans	$ 453,552	253,713
Other loan portfolio \| Consumer
Summary of loans
Loans	371,455	270,017
Other loan portfolio \| Lease financing
Summary of loans
Loans	205,143	191,479
Commercial and Residential Loan
Loans, additional information
Loans held for sale	50,100	70,600
Proceeds from sales of loans held for sale	815,500	1,180,000
Non-PCI loans
Summary of loans
Loans	3,204,217	2,291,720
Non-PCI loans \| Commercial real estate
Summary of loans
Loans	2,180,186	1,583,380
Non-PCI loans \| Commercial real estate \| Commercial
Summary of loans
Loans	553,257	454,310
Non-PCI loans \| Commercial real estate \| Commercial real estate
Summary of loans
Loans	1,427,076	963,895
Non-PCI loans \| Commercial real estate \| Construction and land development
Summary of loans
Loans	199,853	165,175
Non-PCI loans \| Other loan portfolio
Summary of loans
Loans	1,024,031	708,340
Non-PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	447,602	247,156
Non-PCI loans \| Other loan portfolio \| Consumer
Summary of loans
Loans	371,286	269,705
Non-PCI loans \| Other loan portfolio \| Lease financing
Summary of loans
Loans	205,143	191,479
PCI loans
Summary of loans
Loans	22,461	28,256
Customer outstanding balances	32,800	34,600
PCI loans \| Commercial real estate
Summary of loans
Loans	16,342	21,387
PCI loans \| Commercial real estate \| Commercial
Summary of loans
Loans	2,673	3,517
PCI loans \| Commercial real estate \| Commercial real estate
Summary of loans
Loans	12,935	5,720
PCI loans \| Commercial real estate \| Construction and land development
Summary of loans
Loans	734	12,150
PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	5,950	6,557
PCI loans \| Other loan portfolio \| Consumer
Summary of loans
Loans	$ 169	$ 312

LOANS - Impaired Loans (Details) - USD ($)	12 Months Ended
LOANS - Impaired Loans (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	860,000	718,000	992,000
Recognized interest income on loans modified under troubled debt restructurings	85,000	339,000	$ 267,000
Non-PCI loans
Summary of impaired loans
Nonaccrual loans	21,317,000	16,871,000
Loans modified under troubled debt restructuring	12,998,000	17,952,000
Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	21,317,000	16,871,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	2,642,000	2,405,000
Loans modified under troubled debt restructuring	2,801,000	12,327,000
Total impaired loans	26,760,000	31,603,000
PCI loans
Summary of impaired loans
Total impaired loans	22,500,000	28,300,000
Commercial \| Commercial real estate \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	1,266,000	3,559,000
Loans modified under troubled debt restructuring	299,000	611,000
Commercial \| Commercial real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	1,266,000	3,559,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	2,538,000	2,378,000
Loans modified under troubled debt restructuring	299,000	611,000
Total impaired loans	4,103,000	6,548,000
Commercial real estate \| Commercial real estate \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	12,482,000	7,145,000
Loans modified under troubled debt restructuring	11,430,000	16,351,000
Commercial real estate \| Commercial real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	12,482,000	7,145,000
Loans modified under troubled debt restructuring	1,515,000	11,253,000
Total impaired loans	13,997,000	18,398,000
Construction and land development \| Commercial real estate \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	785,000	21,000
Loans modified under troubled debt restructuring	58,000	63,000
Construction and land development \| Commercial real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	785,000	21,000
Loans modified under troubled debt restructuring	58,000	63,000
Total impaired loans	843,000	84,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	5,204,000	4,629,000
Loans modified under troubled debt restructuring	1,211,000	927,000
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	5,204,000	4,629,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	51,000
Loans modified under troubled debt restructuring	929,000	400,000
Total impaired loans	6,184,000	5,029,000
Consumer \| Other loan portfolio \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	234,000	187,000
Consumer \| Other loan portfolio \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	234,000	187,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	53,000	26,000
Total impaired loans	287,000	213,000
Lease financing \| Other loan portfolio \| Non-PCI loans
Summary of impaired loans
Nonaccrual loans	1,346,000	1,330,000
Lease financing \| Other loan portfolio \| Non-PCI loans \| Impaired
Summary of impaired loans
Nonaccrual loans	1,346,000	1,330,000
Accruing loans contractually past due 90 days or more as to interest or principal payments		1,000
Total impaired loans	$ 1,346,000	$ 1,331,000

LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Impaired loans (excluding PCI loans) by portfolio
Difference between the recorded investment and unpaid principal balance	$ 12,800	$ 6,700
Impaired \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	10,995	11,382
With a valuation allowance, Unpaid Principal Balance	12,955	12,228
With a valuation allowance, Average Annual Recorded Investment	13,677	11,774	$ 19,994
With a related valuation allowance, Interest Income Recognized while on Impaired Status	127	358	283
With no related valuation allowance, Recorded Investment	15,765	20,221
With no related valuation allowance, Unpaid Principal Balance	26,604	26,113	2
With no related valuation allowance, Average Annual Recorded Investment	22,356	23,656	6,334
With no related valuation allowance, Interest Income Recognized while on Impaired Status	3	20
Total impaired loans	26,760	31,603
Total, Unpaid Principal Balance	39,559	38,341
Total, Related Valuation Allowance	1,805	2,182
Total, Average Annual Recorded Investment	36,033	35,430	26,328
Total, Interest Income Recognized While on Impaired Status	130	378	285
Commercial \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	3,237	3,877
With a valuation allowance, Unpaid Principal Balance	3,297	3,888
With a valuation allowance, Average Annual Recorded Investment	2,969	3,974	7,088
With a related valuation allowance, Interest Income Recognized while on Impaired Status	15	15
With no related valuation allowance, Recorded Investment	866	2,671
With no related valuation allowance, Unpaid Principal Balance	5,782	7,567
With no related valuation allowance, Average Annual Recorded Investment	2,369	5,604	781
With no related valuation allowance, Interest Income Recognized while on Impaired Status		1
Total impaired loans	4,103	6,548
Total, Unpaid Principal Balance	9,079	11,455
Total, Related Valuation Allowance	526	882
Total, Average Annual Recorded Investment	5,338	9,578	7,869
Total, Interest Income Recognized While on Impaired Status	15	16
Commercial real estate \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	2,297	2,142
With a valuation allowance, Unpaid Principal Balance	3,508	2,331
With a valuation allowance, Average Annual Recorded Investment	5,408	2,379	9,225
With a related valuation allowance, Interest Income Recognized while on Impaired Status	70	306	267
With no related valuation allowance, Recorded Investment	11,700	16,256
With no related valuation allowance, Unpaid Principal Balance	17,359	17,058
With no related valuation allowance, Average Annual Recorded Investment	16,822	16,847	4,599
With no related valuation allowance, Interest Income Recognized while on Impaired Status		17
Total impaired loans	13,997	18,398
Total, Unpaid Principal Balance	20,867	19,389
Total, Related Valuation Allowance	329	309
Total, Average Annual Recorded Investment	22,230	19,226	13,824
Total, Interest Income Recognized While on Impaired Status	70	323	267
Construction and land development \| Impaired \| Commercial real estate \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	103	84
With a valuation allowance, Unpaid Principal Balance	102	84
With a valuation allowance, Average Annual Recorded Investment	83	87
With a related valuation allowance, Interest Income Recognized while on Impaired Status	4	7
With no related valuation allowance, Recorded Investment	740
With no related valuation allowance, Unpaid Principal Balance	780
With no related valuation allowance, Average Annual Recorded Investment	815
Total impaired loans	843	84
Total, Unpaid Principal Balance	882	84
Total, Related Valuation Allowance	10	8
Total, Average Annual Recorded Investment	898	87
Total, Interest Income Recognized While on Impaired Status	4	7
Residential real estate \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	4,028	3,735
With a valuation allowance, Unpaid Principal Balance	4,705	4,404
With a valuation allowance, Average Annual Recorded Investment	3,854	3,782	3,231
With a related valuation allowance, Interest Income Recognized while on Impaired Status	38	30	16
With no related valuation allowance, Recorded Investment	2,156	1,294
With no related valuation allowance, Unpaid Principal Balance	2,380	1,462	2
With no related valuation allowance, Average Annual Recorded Investment	2,055	1,179	954
With no related valuation allowance, Interest Income Recognized while on Impaired Status	3	2
Total impaired loans	6,184	5,029
Total, Unpaid Principal Balance	7,085	5,866
Total, Related Valuation Allowance	566	604
Total, Average Annual Recorded Investment	5,909	4,961	4,185
Total, Interest Income Recognized While on Impaired Status	41	32	18
Consumer \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	266	213
With a valuation allowance, Unpaid Principal Balance	279	190
With a valuation allowance, Average Annual Recorded Investment	299	221	52
With no related valuation allowance, Recorded Investment	21
With no related valuation allowance, Unpaid Principal Balance	21	26
With no related valuation allowance, Average Annual Recorded Investment	13	26
Total impaired loans	287	213
Total, Unpaid Principal Balance	300	216
Total, Related Valuation Allowance	29	23
Total, Average Annual Recorded Investment	312	247	52
Lease financing \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	1,064	1,331
With a valuation allowance, Unpaid Principal Balance	1,064	1,331
With a valuation allowance, Average Annual Recorded Investment	1,064	1,331	398
With no related valuation allowance, Recorded Investment	282
With no related valuation allowance, Unpaid Principal Balance	282
With no related valuation allowance, Average Annual Recorded Investment	282
Total impaired loans	1,346	1,331
Total, Unpaid Principal Balance	1,346	1,331
Total, Related Valuation Allowance	345	356
Total, Average Annual Recorded Investment	$ 1,346	$ 1,331	$ 398

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	$ 3,226,678	$ 2,319,976
Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	21,317	16,871
Total Past Due	39,364	30,043
Current	3,164,853	2,261,677
Loans and Leases Receivable, Gross, Total	3,204,217	2,291,720
Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	12,464	9,241
Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	2,941	1,526
Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	2,642	2,405
Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,196,528	1,604,767
Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,180,186	1,583,380
Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,024,031	708,340
Commercial \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	555,930	457,827
Commercial \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,266	3,559
Total Past Due	7,263	9,401
Current	545,994	444,909
Loans and Leases Receivable, Gross, Total	553,257	454,310
Commercial \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	3,282	3,326
Commercial \| Commercial real estate \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	177	138
Commercial \| Commercial real estate \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	2,538	2,378
Commercial real estate \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,440,011	969,615
Commercial real estate \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	12,482	7,145
Total Past Due	16,228	8,580
Current	1,410,848	955,315
Loans and Leases Receivable, Gross, Total	1,427,076	963,895
Commercial real estate \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	3,116	648
Commercial real estate \| Commercial real estate \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	630	787
Construction and land development \| Commercial real estate
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	200,587	177,325
Construction and land development \| Commercial real estate \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	785	21
Total Past Due	2,738	21
Current	197,115	165,154
Loans and Leases Receivable, Gross, Total	199,853	165,175
Construction and land development \| Commercial real estate \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,953
Residential real estate \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	453,552	253,713
Residential real estate \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	5,204	4,629
Total Past Due	6,784	8,114
Current	440,818	239,042
Loans and Leases Receivable, Gross, Total	447,602	247,156
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	897	3,472
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	632	13
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	51
Consumer \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	371,455	270,017
Consumer \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	234	187
Total Past Due	4,613	2,502
Current	366,673	267,203
Loans and Leases Receivable, Gross, Total	371,286	269,705
Consumer \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	2,824	1,701
Consumer \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	1,502	588
Consumer \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	53	26
Lease financing \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	205,143	191,479
Lease financing \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,346	1,330
Total Past Due	1,738	1,425
Current	203,405	190,054
Loans and Leases Receivable, Gross, Total	205,143	191,479
Lease financing \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	$ 392	94
Lease financing \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		$ 1

LOANS - TDRs by portfolio (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Troubled debt restructuring
Allowance for loan losses on TDRs	$ 240,000	$ 203,000
Unfunded commitments	0	0
Minimum \| Performing
Troubled debt restructuring
TDRs, individually evaluated for impairment, threshold	50,000
Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	2,801,000	12,327,000
TDR's Nonaccrual	10,197,000	5,625,000
Total	12,998,000	17,952,000
Commercial \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	299,000	611,000
Total	299,000	611,000
Commercial real estate \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	1,515,000	11,253,000
TDR's Nonaccrual	9,915,000	5,098,000
Total	11,430,000	16,351,000
Construction and land development \| Commercial real estate \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	58,000	63,000
Total	58,000	63,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	929,000	400,000
TDR's Nonaccrual	282,000	527,000
Total	$ 1,211,000	$ 927,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) loan	Dec. 31, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan	6	8	1
Pre-modification outstanding balance	$ 1,213	$ 11,098	$ 58
Post-modification outstanding balance	$ 1,130	$ 10,992	$ 58
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan		1	1
Recorded balance		$ 28	$ 54
Commercial \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan	1	3
Pre-modification outstanding balance	$ 362	$ 685
Post-modification outstanding balance	$ 299	$ 647
Commercial real estate \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan	1	2	1
Pre-modification outstanding balance	$ 323	$ 10,207	$ 58
Post-modification outstanding balance	$ 323	$ 10,139	$ 58
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan		1	1
Recorded balance		$ 28	$ 54
Residential real estate \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	4	3
Pre-modification outstanding balance	$ 528	$ 206
Post-modification outstanding balance	$ 508	$ 206

LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
LOANS
Accretion recorded as loan interest income	$ 29,960	$ 35,276	$ 28,942	$ 25,928	$ 23,514	$ 25,873	$ 27,360	$ 22,916	$ 120,106	$ 99,663	$ 93,780
Changes in the accretable yield for PCI loans
Balance, beginning of period				$ 9,035				$ 10,526	9,035	10,526	16,198
New loans purchased - Centrue acquisition									1,929
Accretion									(5,546)	(8,579)	(5,676)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)									120	915
Reclassification from (to) non-accretable									194	6,173	4
Balance, end of period	$ 5,732				$ 9,035				$ 5,732	$ 9,035	$ 10,526

LOANS - Allowance for loan losses (Details) - USD ($)	3 Months Ended								12 Months Ended
LOANS - Allowance for loan losses (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Changes in allowance for loan losses :
Beginning balance				$ 14,862,000				$ 15,988,000	$ 14,862,000	$ 15,988,000	$ 12,300,000
Provision for loan losses	$ 6,076,000	$ 1,489,000	$ 458,000	1,533,000	$ 2,445,000	$ 1,392,000	$ 629,000	1,125,000	9,556,000	5,591,000	11,127,000
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs									(9,822,000)	(7,736,000)	(9,657,000)
Loan recoveries									1,835,000	1,019,000	2,218,000
Net loan (charge-offs) recoveries									(7,987,000)	(6,717,000)	(7,439,000)
Ending balance	16,431,000				14,862,000				16,431,000	14,862,000	15,988,000
Non-PCI loans
Changes in allowance for loan losses :
Beginning balance				13,744,000				14,093,000	13,744,000	14,093,000	10,503,000
Provision for loan losses									9,295,000	6,425,000	11,061,000
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs									(9,822,000)	(7,668,000)	(9,565,000)
Loan recoveries									1,685,000	894,000	2,094,000
Net loan (charge-offs) recoveries									(8,137,000)	(6,774,000)	(7,471,000)
Ending balance	14,902,000				13,744,000				14,902,000	13,744,000	14,093,000
Non-PCI loans \| Nonperforming, one borrower
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs									(4,600,000)	1,400,000
Non-PCI loans \| Nonperforming, single credit relationship borrower
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs									(1,200,000)	530,000
Non-PCI loans \| Nonperforming, group of nonperforming loans
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs										(1,600,000)	7,500,000
PCI loans
Changes in allowance for loan losses :
Beginning balance				$ 1,118,000				$ 1,895,000	1,118,000	1,895,000	1,797,000
Provision for loan losses									261,000	(834,000)	66,000
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs										(68,000)	(92,000)
Loan recoveries									150,000	125,000	124,000
Net loan (charge-offs) recoveries									150,000	57,000	32,000
Ending balance	$ 1,529,000				$ 1,118,000				$ 1,529,000	$ 1,118,000	$ 1,895,000

LOANS - Allowance for loan losses by loan portfolio and recorded investment (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Changes in allowance for loan losses :
Beginning balance				$ 14,862				$ 15,988	$ 14,862	$ 15,988	$ 12,300
Provision for loan losses	$ 6,076	$ 1,489	$ 458	1,533	$ 2,445	$ 1,392	$ 629	1,125	9,556	5,591	11,127
Charge-offs									(9,822)	(7,736)	(9,657)
Recoveries									1,835	1,019	2,218
Ending balance	16,431				14,862				16,431	14,862	15,988
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												$ 1,070	$ 1,844
Loans collectively evaluated for impairment												735	338
Non-impaired loans collectively evaluated for impairment												13,097	11,562
Loans acquired with deteriorated credit quality												1,529	1,118
Total	16,431			14,862	14,862			15,988	14,862	15,988	12,300	16,431	14,862
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												19,908	28,432
Impaired loans collectively evaluated for impairment												6,852	3,171
Non-impaired loans collectively evaluated for impairment												3,177,457	2,260,117
Loans acquired with deteriorated credit quality												22,461	28,256
Loans and Leases Receivable, Gross, Total												3,226,678	2,319,976
PCI loans
Changes in allowance for loan losses :
Beginning balance				1,118				1,895	1,118	1,895	1,797
Provision for loan losses									261	(834)	66
Charge-offs										(68)	(92)
Recoveries									150	125	124
Ending balance	1,529				1,118				1,529	1,118	1,895
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	1,529			1,118	1,118			1,895	1,118	1,895	1,797	1,529	1,118
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												22,461	28,256
Commercial real estate
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												2,196,528	1,604,767
Commercial real estate \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												16,342	21,387
Commercial \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance				5,920				6,917	5,920	6,917
Provision for loan losses									(118)	2,992
Charge-offs									(737)	(4,252)
Recoveries									191	263
Ending balance	5,256				5,920				5,256	5,920	6,917
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												221	878
Loans collectively evaluated for impairment												305	4
Non-impaired loans collectively evaluated for impairment												4,230	4,539
Loans acquired with deteriorated credit quality												500	499
Total	5,256			5,920	5,920			6,917	5,920	6,917	6,917	5,256	5,920
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												1,285	6,504
Impaired loans collectively evaluated for impairment												2,818	44
Non-impaired loans collectively evaluated for impairment												549,154	447,762
Loans acquired with deteriorated credit quality												2,673	3,517
Loans and Leases Receivable, Gross, Total												555,930	457,827
Commercial \| Commercial real estate \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												2,673	3,517
Commercial real estate \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance				3,225				5,179	3,225	5,179
Provision for loan losses									7,879	(1,041)
Charge-offs									(6,552)	(1,177)
Recoveries									492	264
Ending balance	5,044				3,225				5,044	3,225	5,179
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												281	296
Loans collectively evaluated for impairment												48	13
Non-impaired loans collectively evaluated for impairment												4,379	2,684
Loans acquired with deteriorated credit quality												336	232
Total	5,044			3,225	3,225			5,179	3,225	5,179	5,179	5,044	3,225
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												13,554	18,275
Impaired loans collectively evaluated for impairment												443	123
Non-impaired loans collectively evaluated for impairment												1,413,079	945,497
Loans acquired with deteriorated credit quality												12,935	5,720
Loans and Leases Receivable, Gross, Total												1,440,011	969,615
Commercial real estate \| Commercial real estate \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												12,935	5,720
Construction and land development \| Commercial real estate
Changes in allowance for loan losses :
Beginning balance				345				435	345	435
Provision for loan losses									110	(183)
Charge-offs										(1)
Recoveries									63	94
Ending balance	518				345				518	345	435
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												5	6
Loans collectively evaluated for impairment												5	2
Non-impaired loans collectively evaluated for impairment												504	337
Loans acquired with deteriorated credit quality												4
Total	518			345	345			435	345	435	435	518	345
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												797	63
Impaired loans collectively evaluated for impairment												46	21
Non-impaired loans collectively evaluated for impairment												199,010	165,091
Loans acquired with deteriorated credit quality												734	12,150
Loans and Leases Receivable, Gross, Total												200,587	177,325
Construction and land development \| Commercial real estate \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												734	12,150
Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				2,929				2,120	2,929	2,120
Provision for loan losses									1	1,601
Charge-offs									(698)	(966)
Recoveries									518	174
Ending balance	2,750				2,929				2,750	2,929	2,120
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												302	379
Loans collectively evaluated for impairment												264	225
Non-impaired loans collectively evaluated for impairment												1,644	1,968
Loans acquired with deteriorated credit quality												540	357
Total	2,750			2,929	2,929			2,120	2,929	2,120	2,120	2,750	2,929
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												3,700	2,920
Impaired loans collectively evaluated for impairment												2,484	2,109
Non-impaired loans collectively evaluated for impairment												441,418	242,127
Loans acquired with deteriorated credit quality												5,950	6,557
Loans and Leases Receivable, Gross, Total												453,552	253,713
Residential real estate \| Other loan portfolio \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												5,950	6,557
Consumer \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				930				749	930	749
Provision for loan losses									954	382
Charge-offs									(794)	(301)
Recoveries									254	100
Ending balance	1,344				930				1,344	930	749
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans collectively evaluated for impairment												29	23
Non-impaired loans collectively evaluated for impairment												1,166	877
Loans acquired with deteriorated credit quality												149	30
Total	1,344			930	930			749	930	749	749	1,344	930
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												4
Impaired loans collectively evaluated for impairment												283	213
Non-impaired loans collectively evaluated for impairment												370,999	269,492
Loans acquired with deteriorated credit quality												169	312
Loans and Leases Receivable, Gross, Total												371,455	270,017
Consumer \| Other loan portfolio \| PCI loans
Recorded investment (loan balance) at December 31, 2014:
Loans and Leases Receivable, Gross, Total												169	312
Lease financing \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				1,513				588	1,513	588
Provision for loan losses									730	1,840
Charge-offs									(1,041)	(1,039)
Recoveries									317	124
Ending balance	1,519				1,513				1,519	1,513	588
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												261	285
Loans collectively evaluated for impairment												84	71
Non-impaired loans collectively evaluated for impairment												1,174	1,157
Total	$ 1,519			$ 1,513	$ 1,513			$ 588	$ 1,513	$ 588	$ 588	1,519	1,513
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												568	670
Impaired loans collectively evaluated for impairment												778	661
Non-impaired loans collectively evaluated for impairment												203,797	190,148
Loans and Leases Receivable, Gross, Total												$ 205,143	$ 191,479

PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	3 Months Ended	12 Months Ended
PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	Mar. 31, 2017 item	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Property, Plant and Equipment [Line Items]
Premises and equipment gross		$ 105,789	$ 92,499
Accumulated depreciation		(29,627)	(25,807)
Premises and equipment, net		76,162	66,692
Other assets		42,425	40,259
Depreciation		$ 5,014	5,080	$ 5,139
Number of banking offices \| item	7	6
Asset impairment		$ 2,000	1,900
Increase in assets held for sale		3,400	1,600
Land
Property, Plant and Equipment [Line Items]
Premises and equipment gross		16,109	14,314
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment gross		63,837	56,766
Equipment
Property, Plant and Equipment [Line Items]
Premises and equipment gross		25,843	21,419
Midland States Bancorp, Inc
Property, Plant and Equipment [Line Items]
Other assets		$ 2,303	$ 2,047

MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Mortgage servicing rights:
Balance, beginning of period	$ 71,710	$ 67,218	$ 62,900
Balance, end of period	60,383	71,710	67,218
Valuation allowances:
Balance, beginning of period	3,702	567	119
Additions	2,436	6,962	1,630
Reductions	(112)	(3,827)	(1,182)
Servicing rights transferred to held for sale-residential mortgage loans	1,995
Balance, end of period	4,031	3,702	567
Mortgage servicing rights, net	56,352	68,008	66,651
Fair Value	56,352	68,008	66,700	$ 62,781
Loss on mortgage servicing rights held for sale	(4,059)
Servicing Rights Held For Sale	10,176
Commercial FHA Mortgage Loans
Mortgage servicing rights:
Servicing rights capitalized	6,287	6,805	4,318
Amortization	(2,579)	(2,388)	(2,272)
Residential mortgage loans
Mortgage servicing rights:
Payments to Acquire Mortgage Servicing Rights (MSR)	1,933
Servicing rights transferred to held for sale-residential mortgage loans	(16,229)
Servicing rights capitalized	1,789	3,828	5,015
Amortization	(2,528)	$ (3,753)	$ (2,743)
Valuation allowances:
Servicing asset transferred to mortgage servicing rights held for sale after net of valuation allowance	$ 14,200

MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Commercial FHA Mortgage Loans
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.12%	0.13%
Interest Rate	3.67%	3.72%
Remaining Years to Maturity	30 years 3 months 18 days	30 years 2 months 12 days
Prepayment Rate	8.27%	8.31%
Servicing Cost	1000.00%	1000.00%
Commercial FHA Mortgage Loans \| Maximum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	14.00%	13.00%
Commercial FHA Mortgage Loans \| Minimum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	10.00%	10.00%
Residential mortgage loans
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.26%	0.26%
Interest Rate	3.93%	3.89%
Remaining Years to Maturity	23 years 2 months 12 days	24 years 2 months 12 days
Prepayment Rate	11.52%	9.72%
Servicing Cost	71.00%	60.00%
Residential mortgage loans \| Maximum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	13.00%	11.00%
Residential mortgage loans \| Minimum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	8.00%	9.00%

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands			9 Months Ended
	Jun. 09, 2017	Mar. 28, 2017	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Goodwill [Line Items]
Goodwill				$ 98,624	$ 48,836
Goodwill, Impairment Loss			$ 0
CedarPoint
Goodwill [Line Items]
Goodwill		$ 2,400
Amount of increase in goodwill		$ 2,400
Centrue
Goodwill [Line Items]
Goodwill	$ 47,359
Amount of increase in goodwill	$ 47,400
Banking
Goodwill [Line Items]
Goodwill				82,986	35,627
Commercial FHA Origination and Servicing
Goodwill [Line Items]
Goodwill				10,892	10,892
Other
Goodwill [Line Items]
Goodwill				$ 4,746	$ 2,317

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands			12 Months Ended
	Jun. 09, 2017	Mar. 28, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-lived intangible assets
Gross Carrying Amount			$ 39,083	$ 26,013
Accumulated Amortization			(22,151)	(18,826)
Total			16,932	7,187
Amortization of intangible assets			3,325	2,147	$ 2,460
Estimated amortization expense of intangible assets
2018			3,694
2019			3,053
2020			2,429
2021			1,971
2022			1,566
Thereafter			4,219
Total			16,932	7,187
Core deposits
Finite-lived intangible assets
Gross Carrying Amount			31,612	20,542
Accumulated Amortization			(18,943)	(16,181)
Total			12,669	4,361
Estimated amortization expense of intangible assets
Total			12,669	4,361
Customer relationship
Finite-lived intangible assets
Gross Carrying Amount			7,471	5,471
Accumulated Amortization			(3,208)	(2,645)
Total			4,263	2,826
Estimated amortization expense of intangible assets
Total			$ 4,263	$ 2,826
CedarPoint \| Customer relationship
Finite-lived intangible assets
Intangible assets		$ 2,000
Amortization period		12 years
Centrue
Finite-lived intangible assets
Intangible assets	$ 11,070
Centrue \| Core deposits
Finite-lived intangible assets
Intangible assets	$ 11,100
Amortization period	8 years

DERIVATIVE INSTRUMENTS (Details) - USD ($)	12 Months Ended
DERIVATIVE INSTRUMENTS (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	$ 717,976,000	$ 566,147,000
Fair value of asset derivatives	6,362,000	6,378,000
Net (losses) gains recognized on derivative instruments	(16,000)	351,000	$ 6,000,000
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	345,152,000	264,359,000
Fair value of asset derivatives	6,331,000	6,253,000
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	372,824,000	301,788,000
Fair value of asset derivatives	31,000	$ 125,000
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	10,000,000
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	$ 17,000

DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($)		1 Months Ended	12 Months Ended
	Oct. 13, 2017	Jun. 30, 2015	Dec. 31, 2017	Dec. 31, 2016
Derivative disclosures
Debt Instrument, Description of Variable Rate Basis			three-month LIBOR
Fair value of asset derivatives			$ 6,362,000	$ 6,378,000
LIBOR
Derivative disclosures
Variable interest rate (as a percent)	422.90%	435.00%	4.35%
Interest rate swap contracts
Derivative disclosures
Notional amount of interest rate swaps			$ 10,000,000
Interest rate swap contracts \| Other assets
Derivative disclosures
Fair value of asset derivatives			17,000
Interest rate swap contracts \| Other liabilities.
Derivative disclosures
Fair value of liability derivatives			$ 17,000

DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Classification of deposits
Noninterest-bearing demand	$ 724,443	$ 562,333
Interest-bearing:
Checking	785,934	656,248
Money market	646,426	399,851
Savings	281,212	166,910
Time	693,074	619,024
Total deposits	3,131,089	2,404,366
Time deposits 250000 or more	69,900	52,900
Brokered certificate of deposit	190,300	218,700
Schedule of maturities of time deposits
2018	414,739
2019	234,347
2020	25,792
2021	9,753
2022	8,442
Thereafter	1
Total	693,074
Investment Securities
Interest-bearing:
Amounts pledged for public deposits	116,000	75,300
Standby Letters of Credit
Interest-bearing:
Amounts pledged for public deposits	$ 120,000	$ 68,000

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Short-term Debt [Line Items]
Outstanding at period-end	$ 156,126	$ 131,557
Average amount outstanding	163,461	130,228
Maximum amount outstanding at any month end	$ 196,278	$ 168,369
Weighted average interest rate:
During period	0.23%	0.23%
End of period	0.28%	0.21%
Short-term Debt, Other Disclosures [Abstract]
Federal funds lines of credit	$ 55,000
Investment securities pledged/collateralized for secured borrowings	157,200	$ 140,000
Line of credit	0	0
Commercial real estate
Short-term Debt, Other Disclosures [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount, Commercial	36,500	43,300
Federal Reserve Discount Window
Short-term Debt, Other Disclosures [Abstract]
Line of credit	$ 32,500	$ 35,100

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Oct. 13, 2017	May 25, 2017	Jun. 30, 2015	Dec. 31, 2017	Dec. 31, 2016
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				$ 496,436	$ 237,518
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate				1.20%
Variable rate basis				three-month LIBOR
Preferred stock, shares issued				2,636
Preferred stock, par value				$ 2
Line of credit				$ 55,000
Advances				0	0
Principal payment on term loan				1,400
FHLB advances, collateral for mortgage and home equity line of credit loans				$ 1,860,000	$ 1,180,000
Revolving Credit Facility [Member] \| Maximum
Federal Home Loan Bank Advances, Interest Rate Information
Line of credit		$ 10,000
LIBOR
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate	422.90%		435.00%	4.35%
LIBOR \| Revolving Credit Facility [Member]
Federal Home Loan Bank Advances, Interest Rate Information
Variable rate basis		one-month LIBOR
Basis spread on variable rate		200.00%
Series G Preferred Stock
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued				181	181
Preferred stock, par value				$ 1,000
Midland States Bancorp, Inc \| Series G Preferred Stock
Federal Home Loan Bank Advances, Interest Rate Information
Long term debt				$ 181
Obligations under capital leases ? implicit interest rate of 1.70% ? maturing through July 2018 \| Midland States Bank
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				5	$ 18
Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Face Amount		$ 40,000
Term loan \| LIBOR
Federal Home Loan Bank Advances, Interest Rate Information
Variable rate basis		one-month LIBOR
Basis spread on variable rate		225.00%
Term loan \| Midland States Bancorp, Inc
Federal Home Loan Bank Advances, Interest Rate Information
Long term debt				$ 37,113
Term loan \| Midland States Bancorp, Inc \| LIBOR
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate				2.25%
Interest rate during the period				3.63%
Fixed Rate Term Loan \| Midland States Bank
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				$ 450,137	237,500
Fixed rate, fixed term maturing through June 2021 \| Midland States Bank
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				$ 145,000	$ 112,500
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate				1.35%	1.00%
Putable fixed rate loan maturing through August 2023 \| Midland States Bank
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				$ 305,000	$ 125,000
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate				1.29%	0.79%
Variable rate, fixed term maturing through March 2018 \| Midland States Bank
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings				$ 9,000

FHLB ADVANCES AND OTHER BORROWINGS - Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
2018	$ 144,931
2019	15,739
2020	25,747
2021	55,019
2022	150,000
Thereafter	105,000
Total	$ 496,436	$ 237,518

SUBORDINATED DEBT (Details) $ in Thousands			1 Months Ended	12 Months Ended
SUBORDINATED DEBT (Details) $ in Thousands	Oct. 13, 2017 USD ($)	May 25, 2017 USD ($)	Jun. 30, 2015 USD ($) tranche	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Subordinated Borrowing [Line Items]
Carrying amount				$ 93,972	$ 54,508
Duration with fixed interest rate				5 years
Variable rate basis				three-month LIBOR
Number of tranches \| tranche			2
Common stock				$ 191	155
Repayments of Subordinated Debt					8,000
LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)	422.90%		435.00%	4.35%
Subordinate debt
Subordinated Borrowing [Line Items]
Debt issuance costs	$ 600		$ 900
Subordinate debt, $40,325 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.00%
Carrying amount				$ 39,800	39,729
Face Amount				$ 40,325
Subordinate debt, $40,325 maturing June 18, 2025 \| LIBOR
Subordinated Borrowing [Line Items]
Variable rate basis				three month LIBOR
Subordinate debt, $15,000 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.50%
Carrying amount				$ 14,805	$ 14,779
Face Amount				$ 15,000
Subordinated debt $40,000 maturing October 15, 2027
Subordinated Borrowing [Line Items]
Fixed interest rate				6.25%
Carrying amount				$ 39,367
Duration with fixed interest rate				5 years
Face Amount				$ 40,000
Subordinated debt $40,000 maturing October 15, 2027 \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)				4.23%
Variable rate basis				three month LIBOR
Term loan
Subordinated Borrowing [Line Items]
Face Amount		$ 40,000
Term loan \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)		225.00%
Variable rate basis		one-month LIBOR
Private Placement \| Subordinate debt
Subordinated Borrowing [Line Items]
Face Amount	$ 40,000		$ 55,300

TRUST PREFERRED DEBNTURES (Details) - USD ($)		1 Months Ended	12 Months Ended
TRUST PREFERRED DEBNTURES (Details) - USD ($)	Oct. 13, 2017	Jun. 30, 2015	Dec. 31, 2017	Jun. 09, 2017	Dec. 31, 2016	Dec. 31, 2014	Jun. 05, 2013	Jun. 06, 2007	Nov. 30, 2006	Apr. 30, 2004	Mar. 26, 2004	Dec. 19, 2003
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 45,379,000		$ 37,405,000
LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	422.90%	435.00%	4.35%
Centrue
TRUST PREFERRED DEBENTURES
Book value of subordinated debentures				$ 10,000,000
Liquidation amount per security										$ 1,000
Number of preferred securities issued										10,000
Fair value of subordinated debentures				$ 7,600,000
Grant Park Trust
TRUST PREFERRED DEBENTURES
Book value of subordinated debentures							$ 3,000,000
Liquidation amount per security												$ 1,000
Number of preferred securities issued												3,000
Fair value of subordinated debentures							$ 1,800,000
Midland Trust
TRUST PREFERRED DEBENTURES
Pool issued											$ 10,000,000
Liquidation amount per security											$ 1,000
LSHC Trust III
TRUST PREFERRED DEBENTURES
Book value of subordinated debentures						$ 40,000,000
Liquidation amount per security									$ 1,000
Number of preferred securities issued									20,000
Fair value of subordinated debentures						$ 26,100,000
LSHC Trust IV
TRUST PREFERRED DEBENTURES
Liquidation amount per security								$ 1,000
Number of preferred securities issued								20,000
Centrue Bank
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 7,605,000
Trust preferred debentures maturing January 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 2,058,000		$ 1,996,000
Trust preferred debentures maturing January 23, 2034 \| Grant Park Trust
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)			4.23%		3.74%
Face Amount										$ 3,000		$ 3,000,000
Trust preferred debentures maturing January 23, 2034 \| Grant Park Trust \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)			2.85%
Trust preferred debentures maturing January 23, 2034 \| Midland Trust
TRUST PREFERRED DEBENTURES
Face Amount										10,000
Trust preferred debentures maturing April 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 9,960,000		$ 9,957,000
Trust preferred debentures maturing April 23, 2034 \| Midland Trust
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)			4.11%		3.63%
Face Amount											$ 10,000,000
Trust preferred debentures maturing April 23, 2034 \| Midland Trust \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)			2.75%
Trust preferred debentures maturing December 31, 2036
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 13,292,000		$ 13,141,000
Trust preferred debentures maturing December 31, 2036 \| LSHC Trust III
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)			3.34%		2.71%
Face Amount									$ 20,000,000	20,000
Trust preferred debentures maturing December 31, 2036 \| LSHC Trust III \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)			1.75%
Trust preferred debentures maturing September 6, 2037
TRUST PREFERRED DEBENTURES
Trust preferred debentures			$ 12,464,000		$ 12,311,000
Trust preferred debentures maturing September 6, 2037 \| LSHC Trust IV
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)			2.98%		2.42%
Face Amount								$ 20,000,000		20,000
Trust preferred debentures maturing September 6, 2037 \| LSHC Trust IV \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)			1.47%
Trust preferred debentures maturing April 22, 2034 \| Centrue Bank
TRUST PREFERRED DEBENTURES
Face Amount										10,000
Trust preferred debentures maturing April 22, 2034 \| Centrue Bank \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)			2.65%
Interest rate (as a percent)			4.25%
Other assets \| Grant Park Trust
TRUST PREFERRED DEBENTURES
Company's investment in the common stock of trust												$ 93,000
Other assets \| Midland Trust
TRUST PREFERRED DEBENTURES
Company's investment in the common stock of trust											$ 310,000
Other assets \| LSHC Trust IV
TRUST PREFERRED DEBENTURES
Company's investment in the common stock of trust								$ 1,200,000
Other assets \| Centrue Bank
TRUST PREFERRED DEBENTURES
Company's investment in the common stock of trust										$ 310,000

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Federal:
Current									$ (696)	$ 1,718	$ 3,500
Deferred									11,632	11,381	5,604
State:
Current									(921)	2,630	1,117
Deferred									400	3,160	870
Total income tax expense	$ 5,775	$ 280	$ 1,377	$ 2,983	$ 8,327	$ 4,102	$ 3,683	$ 2,777	$ 10,415	$ 18,889	$ 11,091

INCOME TAXES - Statutory federal rate (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation between the amount of reported income tax and the amount computed using statutory federal rate
Effective income tax rate									35.00%
Expected income taxes									$ 9,244	$ 17,648	$ 12,424
Less income tax effect of:
Tax exempt interest									(1,682)	(1,670)	(1,934)
Interest expense disallowance									47	33	29
State tax, net of federal benefit									(110)	3,132	1,292
Increase in cash surrender value of life insurance policies									(969)	(1,007)	(516)
Indemnification income											(311)
Equity-based compensation benefit									(1,297)	(366)
Non-deductible transaction costs									389
Valuation allowance									(229)	631
Effect of federal rate change enacted in 2017									4,540
Other									482	488	107
Actual income tax expense	$ 5,775	$ 280	$ 1,377	$ 2,983	$ 8,327	$ 4,102	$ 3,683	$ 2,777	$ 10,415	$ 18,889	$ 11,091

INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($)		12 Months Ended
	Dec. 22, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets:
Allowance for loan losses			$ 4,405,000	$ 5,766,000
Deferred compensation			1,896,000	2,136,000
Loans			3,896,000	1,972,000
Write-down of other real estate owned			776,000	70,000
Tax credits			1,501,000	3,106,000
Nonaccrual interest			708,000	1,007,000
Unrealized loss on securities				387,000
Intangible assets				292,000
Stock compensation			907,000	689,000
Deferred loan fees, net of costs			133,000
Net operating losses			20,097,000
Other, net			763,000	777,000
Deferred tax assets			35,082,000	16,202,000
Valuation allowance			(409,000)	(631,000)
Deferred tax assets, net of valuation allowance			34,673,000	15,571,000
Liabilities:
Premises and equipment			1,657,000	1,268,000
Unrealized gain on securities			412,000
Mortgage servicing rights			11,424,000	15,092,000
Fair value adjustment on trust preferred debentures			4,700,000	6,023,000
Federal Home Loan Bank stock dividends			310,000	227,000
Deferred loan fees, net of costs				136,000
Intangible assets			2,729,000
Accounting method changes			399,000	1,156,000
Prepaid expenses			796,000
Other, net			222,000	267,000
Deferred tax liabilities			22,649,000	24,169,000
Deferred tax (liabilities) assets, net				8,598,000
Deferred tax assets (liabilities), net			12,024,000
Accumulation of prior year's earnings representing tax bad debt deductions			3,100,000	3,100,000
Write-down of deferred tax assets	$ 4,500,000
Unrecognized tax benefits			0	0
Interest or penalties relative to unrecognized tax benefits			0	$ 0
State tax credit carryforwards Valuation allowance			$ 409,000
Effect of Tax Cuts and Jobs Act of 2017
Effective income tax rate			35.00%
Forecast
Effect of Tax Cuts and Jobs Act of 2017
Effective income tax rate		21.00%
Federal
Assets:
Net operating losses			$ 70,100,000
Liabilities:
Tax credit carryforward			3,700,000
State
Liabilities:
Tax credit carryforward			$ 1,900,000
Period for tax credit carryforward.			5 years
State \| Illinois
Liabilities:
Post-apportioned operating loss carryforward			$ 64,300,000
State \| Missouri
Liabilities:
Pre-apportioned operating loss carryforward			$ 70,100,000

RETIREMENT PLANS (Details) - USD ($)	12 Months Ended
RETIREMENT PLANS (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jul. 01, 2016
Defined Contribution Plan Disclosure [Line Items]
Employer's contribution, discretionary amount	$ 0	$ 0	$ 0
Employer's matching contribution, percentage	50.00%
Employee's contribution, percentage of gross pay	6.00%
Employer's matching contribution, percentage of employee compensation	50.00%
Total expense recorded	$ 1,200,000	1,200,000	1,100,000
Director \| Deferred Compensation Arrangement
Defined Contribution Plan Disclosure [Line Items]
Employer's matching contribution, percentage	25.00%
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, compensation expense	$ 659,000	605,000	596,000
Deferred compensation arrangement, distributions	100,000	126,000	$ 56,000
Chief Executive Officer [Member] \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability	210,000	219,000
Chief Executive Officer [Member] \| Deferred Compensation Arrangement \| Forecast
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, supplement retirement payments, percentage of final salary				30.00%	40.00%	50.00%
Other Postretirement Benefit Plan [Member]
Deferred Compensation Arrangements [Abstract]
Funded status of the plan (market value of assets divided by funding target)							122.00%
Defined benefit plan, minimum required contribution, administrative expense	121,000	134,000
Other liabilities. \| Director \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability	$ 3,800,000	$ 3,100,000
Minimum
Defined Contribution Plan Disclosure [Line Items]
Employee's contribution, percentage of gross pay	1.00%
Maximum
Defined Contribution Plan Disclosure [Line Items]
Employee's contribution, percentage of gross pay	100.00%

STOCK BASED COMPENSATION - Grant date using the Black Scholes (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
2010 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued	2,000,000
Stock option
Fair value of each grant is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions
Dividend yield	2.50%	3.00%	3.14%
Expected volatility	16.63%	16.98%	16.94%
Risk free interest rate	2.12%	1.64%	1.93%
Expected life	6 years 3 months	6 years 3 months	6 years 3 months
Stock option \| 2010 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued	1,000,000

STOCK BASED COMPENSATION - stock option plan (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Weighted average exercise price
Total unrecognized compensation (in years)	2 years 3 months 18 days
Stock option
Number of shares
Options outstanding, beginning of year (in shares)	1,319,259	1,233,606
Options granted (in shares)	31,259	182,118
Options exercised (in shares)	(179,760)	(66,024)
Options forfeited (in shares)	(22,221)	(30,441)
Options outstanding, end of year (in shares)	1,148,537	1,319,259	1,233,606
Options exercisable (in shares)	673,706	729,483
Options vested and expected to vest (in shares)	1,088,853	1,245,713
Weighted average exercise price
Options outstanding, beginning of year (in dollars per share)	$ 18.73	$ 17.52
Options granted (in dollars per share)	32.89	26.15
Options exercised (in dollars per share)	16.02	16.01
Options forfeited (in dollars per share)	26.08	20.15
Options outstanding, end of year (in dollars per share)	19.39	18.73	$ 17.52
Options exercisable (in dollars per share)	17.55	16.37
Options vested and expected to vest (in dollars per share)	$ 19.27	$ 18.56
Options outstanding, end of year (in years)	5 years 9 months 18 days	6 years 3 months 18 days
Options exercisable (in years)	4 years 7 months 6 days	4 years 7 months 6 days
Options vested and expected to vest (in years)	5 years 8 months 12 days	6 years 2 months 12 days
Aggregate intrinsic value of options outstanding	$ 15,000,000
Aggregate intrinsic value of options exercisable	10,100,000
Total unrecognized compensation	$ 747,000
Weighted average fair value of options granted	$ 4.33	$ 2.94	$ 2.55
Total intrinsic value from options exercised	$ 2,300,000	$ 971,000	$ 299,000
Cash received from options exercised	$ 2,900,000	$ 890,000	$ 558,000

STOCK BASED COMPENSATION - Nonvested stock option (Details) - Stock option - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of shares
Nonvested at December 31, 2015 (in shares)	589,776
Granted (in shares)	31,259	182,118
Vested (in shares)	(128,530)
Forfeited (in shares)	(17,674)
Nonvested at December 31, 2016 (in shares)	474,831	589,776
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 2.73
Granted (in dollars per shares)	4.33
Vested (in dollars per shares)	2.73
Forfeited (in dollars per shares)	3.05
Nonvested at December 31, 2016 (in dollars per shares)	$ 2.83	$ 2.73

STOCK BASED COMPENSATION - Restricted stock awards (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year	2 years
Weighted average grant date fair value
Total unrecognized compensation (in years)	2 years 3 months 18 days
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Number outstanding
Granted during the year (in shares)	70,951	63,728
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 27.38	$ 22.95
Nonvested at December 31, 2016 (in dollars per shares)	$ 31.03	27.38	$ 22.95
Total unrecognized compensation				$ 4,000,000
Total unrecognized compensation (in years)	3 years
Weighted average grant date fair value for restricted stock awards	$ 27.38	$ 22.95	$ 22.95	$ 31.03
Compensation cost that has been charged against income	$ 1,800,000	$ 1,100,000	$ 940,000
Restricted Stock Units (RSUs)
Number outstanding
Granted during the year (in shares)	12,965	7,048
Restricted Stock And Restricted Stock Unit Awards [Member]
Number outstanding
Nonvested at December 31, 2015 (in shares)	108,647
Granted during the year (in shares)	83,916
Vested during the year (in shares)	(37,666)
Forfeited during the year (in shares)	(5,529)
Nonvested at December 31, 2016 (in shares)	149,368	108,647
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 25.16
Granted during the year (in dollars per shares)	31.03
Vested during the year (in dollars per shares)	23.29
Forfeited during the year (in dollars per shares)	27.76
Nonvested at December 31, 2016 (in dollars per shares)	28.83	$ 25.16
Weighted average grant date fair value for restricted stock awards	$ 25.16	$ 25.16		$ 28.83

PREFERRED STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 09, 2017	Dec. 31, 2017
Fair value of preferred stock issued		$ 2,970
Series G Preferred Stock
Dividend rate, per-dollar-amount	$ 60.00
Series H Preferred Stock
Fair value of preferred stock issued	$ 3,100
Dividend rate	12.50%
Redemption price per share	$ 1,000

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
EARNINGS PER SHARE
Net income									$ 16,056	$ 31,542	$ 24,324
Preferred stock dividends									(184)
Amortization of preferred stock premium									101
Net income available to common shareholders	$ 1,954	$ 2,009	$ 3,520	$ 8,490					15,973	31,542	24,324
Common shareholder dividends									(13,922)	(9,797)	(7,642)
Unvested restricted stock award dividends									(86)	(56)	(50)
Undistributed earnings to unvested restricted stock awards									(11)	(110)	(108)
Undistributed earnings to common shareholders									1,954	21,579	16,524
Basic
Common shareholder dividends									(13,922)	(9,797)	(7,642)
Undistributed earnings to common shareholders									1,954	21,579	16,524
Net income available to common shareholders									15,876	31,376	24,166
Diluted
Common shareholder dividends									(13,922)	(9,797)	(7,642)
Undistributed earnings to common shareholders									1,954	21,579	16,524
Net income available to common shareholders									15,876	31,376	24,166
Add back:
Undistributed earnings reallocated from unvested restricted stock awards										2	2
Total common shareholders earnings, diluted									$ 15,876	$ 31,378	$ 24,168
Weighted average common shares outstanding, basic (In shares)									17,781,631	14,130,552	11,902,455
Options and warrants									501,583	298,287	209,948
Weighted average common shares outstanding, diluted (In shares)									18,283,214	14,428,839	12,112,403
Basic earnings per common share (In dollars per share)	$ 0.10	$ 0.10	$ 0.21	$ 0.54	$ 0.74	$ 0.51	$ 0.51	$ 0.43	$ 0.89	$ 2.22	$ 2.03
Diluted earnings per common share (In dollars per share)	$ 0.10	$ 0.10	$ 0.20	$ 0.52	$ 0.72	$ 0.51	$ 0.50	$ 0.42	$ 0.87	$ 2.17	$ 2.00

CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands		12 Months Ended
CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Jan. 01, 2018	Dec. 31, 2019	Dec. 31, 2017	Dec. 31, 2016
Capital requirements and restrictions on dividends
Minimum capital conservation buffer percentage			1.25%	0.625%
Total Capital (to Risk Weighted Assets): Actual Amount			$ 478,914	$ 374,955
Total Capital (to Risk Weighted Assets): Actual Ratio			13.26%	13.85%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount			$ 288,895	$ 216,612
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio			8.00%	8.00%
Tier I Capital (to Risk Weighted Assets): Actual Amount			$ 367,841	$ 305,283
Tier I Capital (to Risk Weighted Assets): Actual Ratio			10.19%	11.27%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount			$ 216,671	$ 162,459
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio			6.00%	6.00%
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount			$ 304,974	$ 253,273
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio			8.45%	9.35%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount			$ 162,503	$ 121,844
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio			4.50%	4.50%
Tier I Capital (to Average Assets): Actual Amount			$ 367,841	$ 305,283
Tier I Capital (to Average Assets): Actual Ratio			8.63%	9.76%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount			$ 170,566	$ 125,076
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio			4.00%	4.00%
Forecast
Capital requirements and restrictions on dividends
Minimum capital conservation buffer percentage		2.50%
Minimum capital conservation buffer annual increase percentage	0.625%
Midland States Bank
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Actual Amount			$ 445,285	$ 329,759
Total Capital (to Risk Weighted Assets): Actual Ratio			12.32%	12.17%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount			$ 289,252	$ 216,773
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio			8.00%	8.00%
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements			$ 361,565	$ 270,966
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements			10.00%	10.00%
Tier I Capital (to Risk Weighted Assets): Actual Amount			$ 428,184	$ 314,595
Tier I Capital (to Risk Weighted Assets): Actual Ratio			11.84%	11.61%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount			$ 216,939	$ 162,580
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio			6.00%	6.00%
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements			$ 289,252	$ 216,773
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements			8.00%	8.00%
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount			$ 428,184	$ 314,595
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio			11.84%	11.61%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount			$ 162,704	$ 121,935
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio			4.50%	4.50%
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements			$ 235,017	$ 176,128
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements			6.50%	6.50%
Tier I Capital (to Average Assets): Actual Amount			$ 428,184	$ 314,595
Tier I Capital (to Average Assets): Actual Ratio			10.04%	10.05%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount			$ 170,608	$ 125,271
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio			4.00%	4.00%
Tier I Capital (to Average Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements			$ 213,260	$ 156,589
Tier I Capital (to Average Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements			5.00%	5.00%

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Oct. 04, 2016
Assets
Investment securities available-for-sale Securities	$ 450,525	$ 246,339
Loans held for sale	50,087	70,565
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	10,176
Losses recognized on assets measured on non-recurring basis
Mortgage servicing rights	2,324	3,135	$ 448
Mortgage servicing rights held for sale	4,059
Impaired loans	7,096	2,459	1,589
Other real estate owned	253	247	114
Assets held for sale	1,516	1,646
Total loss on assets measured on a nonrecurring basis	15,248	7,487	$ 2,151
U.S. Treasury securities
Assets
Investment securities available-for-sale Securities	27,718	75,901
Government sponsored entity debt securities
Assets
Investment securities available-for-sale Securities	25,211	7,688
State and municipal securities
Assets
Investment securities available-for-sale Securities	102,567	25,274
Corporate Securities
Assets
Investment securities available-for-sale Securities	59,812	47,405
Equity securities
Assets
Investment securities available-for-sale Securities	2,830
Covered non-agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities				$ 72,100
Level 1
Assets
Investment securities available-for-sale Securities	27,718	75,901
Level 2
Assets
Investment securities available-for-sale Securities	418,028	162,957
Loans held for sale	50,089	70,565
Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	6,331	6,253
Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31	125
Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Derivative liability	17
Level 3
Assets
Investment securities available-for-sale Securities	4,779	7,481
Recurring member
Assets
Loans held for sale	50,089
Total Assets	506,993
Assets measured at fair value on a non-recurring basis:
Other real estate owned	801
Recurring member \| Interest rate lock commitments
Assets
Derivative Assets	6,331
Recurring member \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31
Recurring member \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Derivative liability	17
Recurring member \| U.S. Treasury securities
Assets
Investment securities available-for-sale Securities	27,718
Recurring member \| Government sponsored entity debt securities
Assets
Investment securities available-for-sale Securities	25,211
Recurring member \| Agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities	232,387
Recurring member \| State and municipal securities
Assets
Investment securities available-for-sale Securities	102,567
Recurring member \| Corporate Securities
Assets
Investment securities available-for-sale Securities	59,812
Recurring member \| Equity securities
Assets
Investment securities available-for-sale Securities	2,830
Recurring member \| Level 1
Assets
Total Assets	27,718
Recurring member \| Level 1 \| U.S. Treasury securities
Assets
Investment securities available-for-sale Securities	27,718
Recurring member \| Level 2
Assets
Loans held for sale	50,089
Total Assets	474,496
Assets measured at fair value on a non-recurring basis:
Other real estate owned	801
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	6,331
Recurring member \| Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31
Recurring member \| Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Derivative liability	17
Recurring member \| Level 2 \| Government sponsored entity debt securities
Assets
Investment securities available-for-sale Securities	25,211
Recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities	232,387
Recurring member \| Level 2 \| State and municipal securities
Assets
Investment securities available-for-sale Securities	102,567
Recurring member \| Level 2 \| Corporate Securities
Assets
Investment securities available-for-sale Securities	55,033
Recurring member \| Level 2 \| Equity securities
Assets
Investment securities available-for-sale Securities	2,830
Recurring member \| Level 3
Assets
Total Assets	4,779
Recurring member \| Level 3 \| Corporate Securities
Assets
Investment securities available-for-sale Securities	4,779
Non recurring member
Assets
Loans held for sale		70,565
Total Assets		323,282
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	56,352	68,008
Mortgage servicing rights held for sale	10,176
Impaired loans	9,385	10,202
Other real estate owned		165
Assets held for sale	3,358	1,550
Non recurring member \| Interest rate lock commitments
Assets
Derivative Assets		6,253
Non recurring member \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets		125
Non recurring member \| U.S. Treasury securities
Assets
Investment securities available-for-sale Securities		75,901
Non recurring member \| Government sponsored entity debt securities
Assets
Investment securities available-for-sale Securities		7,688
Non recurring member \| Agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities		90,070
Non recurring member \| Non-agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities		1
Non recurring member \| State and municipal securities
Assets
Investment securities available-for-sale Securities		25,274
Non recurring member \| Corporate Securities
Assets
Investment securities available-for-sale Securities		47,405
Non recurring member \| Level 1
Assets
Total Assets		75,901
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	10,176
Non recurring member \| Level 1 \| U.S. Treasury securities
Assets
Investment securities available-for-sale Securities		75,901
Non recurring member \| Level 2
Assets
Loans held for sale		70,565
Total Assets		239,900
Assets measured at fair value on a non-recurring basis:
Impaired loans	7,631	6,635
Other real estate owned		165
Assets held for sale	3,358	1,550
Non recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative Assets		6,253
Non recurring member \| Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets		125
Non recurring member \| Level 2 \| Government sponsored entity debt securities
Assets
Investment securities available-for-sale Securities		7,688
Non recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities		90,070
Non recurring member \| Level 2 \| State and municipal securities
Assets
Investment securities available-for-sale Securities		25,274
Non recurring member \| Level 2 \| Corporate Securities
Assets
Investment securities available-for-sale Securities		39,925
Non recurring member \| Level 3
Assets
Total Assets		7,481
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights	56,352	68,008
Impaired loans	$ 1,754	3,567
Non recurring member \| Level 3 \| Non-agency mortgage-backed securities
Assets
Investment securities available-for-sale Securities		1
Non recurring member \| Level 3 \| Corporate Securities
Assets
Investment securities available-for-sale Securities		$ 7,480

FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Corporate Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 7,480
Transferred from Level 2	0	$ 6,749
Transferred to Level 2		(2,000)
Purchases of investment securities recognized as Level 3		3,000
Total realized in earnings	289	343
Total unrealized in other comprehensive income	264	(305)
Net settlements (principal and interest)	(3,254)	(307)
Ending balance	4,779	7,480
Non-agency mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	1	1
Transferred from Level 2		2
Net settlements (principal and interest)	$ (1)	(1)
Ending balance		$ 1

FAIR VALUE OF FINANCIAL INSTRUMENTS- Quantitative Information (Details) - Non recurring member - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Mortgage servicing rights	$ 56,352	$ 68,008
Impaired loans	9,385	10,202
Level 3
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Mortgage servicing rights	56,352	68,008
Impaired loans	1,754	$ 3,567
Level 3 \| Discounted cash flow \| Mortgage servicing rights
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Mortgage servicing rights	56,352
Level 3 \| Discounted cash flow \| Impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans	$ 1,754
Minimum \| Level 3 \| Discounted cash flow \| Mortgage servicing rights
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speed	6.36%
Discount rate	8.00%
Minimum \| Level 3 \| Discounted cash flow \| Impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	4.84%
Maximum \| Level 3 \| Discounted cash flow \| Mortgage servicing rights
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speed	42.90%
Discount rate	14.50%
Maximum \| Level 3 \| Discounted cash flow \| Impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	18.24%
Weighted average \| Level 3 \| Discounted cash flow \| Mortgage servicing rights
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speed	8.83%
Discount rate	11.18%
Weighted average \| Level 3 \| Discounted cash flow \| Impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount rate	8.64%

FAIR VALUE OF FINANCIAL INSTRUMENTS- Fair value option and gains and losses from fair value changes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	$ 50,087	$ 70,565
Difference	717	1,308
Contractual principal	49,370	69,257
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(724)	214
Residential loans held for sale
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	12,241	25,678
Difference	374	315
Contractual principal	11,867	25,363
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(74)	(491)
Commercial real estate
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	37,846	44,887
Difference	343	993
Contractual principal	37,503	43,894
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	$ (650)	$ 705

FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Assets
Investment securities available for sale	$ 450,525	$ 246,339
Investment securities held to maturity	0	81,952
Loans held for sale	50,087	70,565
Accrued interest receivable	11,715	8,202
Liabilities
Trust preferred debentures	45,379	37,405
Accrued interest payable	2,531	1,045
Fair value, additional information
Other-than-temporary impairment on investment securities		824	$ 461
Level 1
Assets
Cash and due from banks	214,519	189,543
Federal funds sold	683	1,173
Investment securities available for sale	27,718	75,901
Level 2
Assets
Investment securities available for sale	418,028	162,957
Investment securities held to maturity		81,952
Nonmarketable equity securities	34,796	19,485
Loans held for sale	50,089	70,565
Accrued interest receivable	11,715	8,202
Liabilities
Deposits	3,127,626	2,404,231
Short-term borrowings	156,126	131,557
FHLB and other borrowings	494,634	236,736
Subordinated debt	90,860	49,692
Trust preferred debentures	46,069
Accrued interest payable	2,531
Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	6,331	6,253
Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31	125
Liabilities
Accrued interest payable		1,045
Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Trust preferred debentures		33,054
Derivative Liability	17
Level 3
Assets
Investment securities available for sale	4,779	7,481
Loans, net	3,200,016	2,305,206
Carrying value
Assets
Cash and due from banks	214,519	189,543
Federal funds sold	683	1,173
Investment securities available for sale	450,525	246,339
Investment securities held to maturity		78,672
Nonmarketable equity securities	34,796	19,485
Loans, net	3,210,247	2,305,114
Loans held for sale	50,089	70,565
Accrued interest receivable	11,715	8,202
Liabilities
Deposits	3,131,089	2,404,366
Short-term borrowings	156,126	131,557
FHLB and other borrowings	496,436	237,518
Subordinated debt	93,972	54,508
Trust preferred debentures	45,379
Accrued interest payable	2,531
Carrying value \| Interest rate lock commitments
Assets
Derivative Assets	6,331	6,253
Carrying value \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31	125
Liabilities
Accrued interest payable		1,045
Carrying value \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Trust preferred debentures		37,405
Derivative Liability	17
Fair value
Assets
Cash and due from banks	214,519	189,543
Federal funds sold	683	1,173
Investment securities available for sale	450,525	246,339
Investment securities held to maturity		81,952
Nonmarketable equity securities	34,796	19,485
Loans, net	3,200,016	2,305,206
Loans held for sale	50,089	70,565
Accrued interest receivable	11,715	8,202
Liabilities
Deposits	3,127,626	2,404,231
Short-term borrowings	156,126	131,557
FHLB and other borrowings	494,634	236,736
Subordinated debt	90,860	49,692
Trust preferred debentures	46,069
Accrued interest payable	2,531
Fair value \| Interest rate lock commitments
Assets
Derivative Assets	6,331	6,253
Fair value \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	31	125
Liabilities
Accrued interest payable		1,045
Fair value \| Interest rate swap contracts
Assets
Derivative Assets	17
Liabilities
Trust preferred debentures		33,054
Derivative Liability	17
Corporate Securities
Assets
Investment securities available for sale	59,812	47,405
Fair value, additional information
AFS transferred to Level 3	$ 0	6,749
Transferred to Level 2		2,000
Corporate Securities \| Maximum
Fair value, additional information
Discount rate	2.50%
Corporate Securities \| Minimum
Fair value, additional information
Discount rate (negative)	(2.5)
Corporate Securities \| Weighted average
Fair value, additional information
Discount rate	1.50%
Non-agency mortgage-backed securities
Fair value, additional information
AFS transferred to Level 3		$ 2

COMMITMENTS, CONTINGENCIES AND CREDIT RISK - Minimum Rental Payments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Anticipated material loss	$ 0
Net rent expense under operating leases	2,700,000	$ 2,400,000	$ 2,400,000
Losses as a result of make whole requests and loan repurchases	17,000	83,000	$ 63,000
Liability for unresolved repurchase demands	371,000	329,000
Minimum rental payments under the terms of leases
2018	2,743,000
2019	2,460,000
2020	2,152,000
2021	2,039,000
2022	1,793,000
Thereafter	3,651,000
Total estimated lease payments	14,838,000
Commitments to extend credit
Loan commitments	568,356,000	483,345,000
Financial guarantees - standby letters of credit
Loan commitments	$ 142,189,000	$ 89,233,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 36,036	$ 36,765	$ 29,400	$ 27,461	$ 25,959	$ 27,265	$ 27,989	$ 24,041	$ 129,662	$ 105,254	$ 104,907
Provision for loan losses	6,076	1,489	458	1,533	2,445	1,392	629	1,125	9,556	5,591	11,127
Noninterest income	13,998	15,403	13,619	16,342	30,486	14,937	14,016	12,618	59,362	72,057	59,482
Noninterest expense	36,192	48,363	37,645	30,797	34,090	28,657	30,904	27,638	152,997	121,289	117,847
Income (loss) before income taxes (benefit)	7,766	2,316	4,916	11,473	19,910	12,153	10,472	7,896	26,471	50,431	35,415
Income tax benefit	5,775	$ 280	$ 1,377	$ 2,983	8,327	$ 4,102	$ 3,683	$ 2,777	10,415	18,889	11,091
Net income									16,056	31,542	24,324
Total assets	4,412,701				3,233,723				4,412,701	3,233,723	2,884,824
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)									135,974	109,950	107,825
Provision for loan losses									9,556	5,591	11,127
Noninterest income									32,223	47,646	34,751
Noninterest expense									127,981	100,053	95,795
Income (loss) before income taxes (benefit)									30,660	51,952	35,654
Income tax benefit									17,102	17,129	10,626
Net income									13,558	34,823	25,028
Total assets	4,403,517				3,225,765				4,403,517	3,225,765	2,886,539
Commercial FHA Origination and Servicing
Segment Reporting Information [Line Items]
Net interest income (expense)									312	1,003	1,762
Noninterest income									18,570	22,979	20,148
Noninterest expense									13,729	15,104	16,232
Income (loss) before income taxes (benefit)									5,153	8,878	5,678
Income tax benefit									(1,033)	3,332	2,271
Net income									6,186	5,546	3,407
Total assets	99,685				129,943				99,685	129,943	89,242
Other
Segment Reporting Information [Line Items]
Net interest income (expense)									(6,624)	(5,699)	(4,680)
Noninterest income									8,569	1,432	4,583
Noninterest expense									11,287	6,132	5,820
Income (loss) before income taxes (benefit)									(9,342)	(10,399)	(5,917)
Income tax benefit									(5,654)	(1,572)	(1,806)
Net income									(3,688)	(8,827)	(4,111)
Total assets	$ (90,501)				$ (121,985)				$ (90,501)	$ (121,985)	$ (90,957)

RELATED PARTY TRANSACTIONS (Details)	12 Months Ended
RELATED PARTY TRANSACTIONS (Details)	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Related Party Transaction [Line Items]
Rent paid	$ 719,000	$ 706,000	$ 693,000
Former member of board of directors
Related Party Transaction [Line Items]
Number of the bank's full-service branch facilities \| item	3
One Of The Board Of Directors
Related Party Transaction [Line Items]
Payments to related party	$ 116,000
Chairman
Related Party Transaction [Line Items]
Payments to related party	$ 20,000	$ 161,000	$ 1,800,000

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Financial Information (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Accrued income taxes receivable	$ 8,358	$ 5,862
Other assets	42,425	40,259
Total assets	4,412,701	3,233,723	$ 2,884,824
Liabilities:
Subordinated debt	93,972	54,508
Trust preferred debentures	45,379	37,405
Deferred tax liabilities, net		8,598
Other liabilities	37,623	36,956
Total liabilities	3,963,156	2,911,953
Shareholders' equity	449,545	321,770	$ 232,880	$ 219,456
Total liabilities and shareholders' equity	4,412,701	3,233,723
Midland States Bancorp, Inc
Assets
Cash	60,424	38,803
Investment in common stock of subsidiaries	563,541	380,474
Accrued income taxes receivable	3,300	17
Other assets	2,303	2,047
Total assets	629,568	421,341
Liabilities:
Subordinated debt	93,972	54,508
Trust preferred debentures	45,379	37,405
Other borrowings	37,294
Deferred tax liabilities, net	252	5,037
Other liabilities	3,126	2,621
Total liabilities	180,023	99,571
Shareholders' equity	449,545	321,770
Total liabilities and shareholders' equity	$ 629,568	$ 421,341

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Condensed Statements of Income
Interest expense	$ 7,464	$ 6,481	$ 5,128	$ 4,378	$ 4,022	$ 3,921	$ 4,126	$ 3,926	$ 23,451	$ 15,995	$ 12,889
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries	7,766	2,316	4,916	11,473	19,910	12,153	10,472	7,896	26,471	50,431	35,415
Income tax benefit	$ (5,775)	$ (280)	$ (1,377)	$ (2,983)	$ (8,327)	$ (4,102)	$ (3,683)	$ (2,777)	(10,415)	(18,889)	(11,091)
Net income									16,056	31,542	24,324
Midland States Bancorp, Inc
Condensed Statements of Income
Dividends from subsidiary									19,500		14,500
Other income									4	428	1,070
Interest expense									(7,162)	(5,699)	(4,680)
Other expense									(1,295)	(1,130)	(132)
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries									11,047	(6,401)	10,758
Income tax benefit									6,080	1,687	1,806
Income (loss) after income taxes and before equity in undistributed (loss) income of subsidiaries									17,127	(4,714)	12,564
Equity in undistributed (loss) income of subsidiaries									(1,071)	36,256	11,760
Net income									$ 16,056	$ 31,542	$ 24,324

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 1,991	$ 2,036	$ 3,539	$ 8,490	$ 11,583	$ 8,051	$ 6,789	$ 5,119	$ 16,056	$ 31,542	$ 24,324
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of restricted stock awards									836	555	517
Compensation expense for stock option grants									548	492	413
Change in other assets									5,260	(6,302)	(2,722)
Change in other liabilities									(2,835)	(313)	(945)
Net cash provided by operating activities									70,456	25,511	73,317
Cash flows from investing activities:
Net cash paid in acquisitions									(18,519)	(5,191)	(20,053)
Net cash used in investing activities									(234,614)	(360,447)	(229,510)
Cash flows from financing activities:
Payments made on subordinated debt										(8,000)
Proceeds from issuance of subordinated debt, net of issuance costs									39,354		55,325
Proceeds from other borrowings, net of issuance costs									39,964
Payments made on other borrowings									(3,198)		(14,177)
Cash dividends paid on preferred stock									(184)
Cash dividends paid on common stock									(14,008)	(9,853)	(7,692)
Proceeds from issuance of common stock in initial public offering, net of issuance costs										71,475
Proceeds from issuance of common stock under employee benefit plans									3,225	1,318	470
Net cash provided by financing activities									188,644	313,177	208,765
Cash and cash equivalents:
Beginning of year				190,716					190,716
End of year	215,202				190,716				215,202	190,716
Midland States Bancorp, Inc
Cash flows from operating activities:
Net income									16,056	31,542	24,324
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed loss (income) of subsidiaries									1,071	(36,256)	(11,760)
Amortization of restricted stock awards									836	555	517
Compensation expense for stock option grants									548	492	413
Change in other assets									(3,226)	4,237	(3,559)
Change in other liabilities									1,649	225	(8,426)
Net cash provided by operating activities									16,934	795	1,509
Cash flows from investing activities:
Net cash paid in acquisitions									(60,457)		(20,053)
Capital injection to subsidiaries									(350)	(25,250)	(30,000)
Net cash used in investing activities									(60,807)	(25,250)	(50,053)
Cash flows from financing activities:
Payments made on subordinated debt										(8,000)
Proceeds from issuance of subordinated debt, net of issuance costs									39,354		55,325
Proceeds from other borrowings, net of issuance costs									39,964
Payments made on other borrowings									(2,857)		(14,000)
Cash dividends paid on preferred stock									(184)	(9,853)	(7,692)
Cash dividends paid on common stock									(14,008)
Proceeds from issuance of common stock in initial public offering, net of issuance costs										71,475
Proceeds from issuance of common stock under employee benefit plans									3,225	1,318	470
Net cash provided by financing activities									65,494	54,940	34,103
Net increase (decrease) in cash									21,621	30,485	(14,441)
Cash and cash equivalents:
Beginning of year				$ 38,803				$ 8,318	38,803	8,318	22,759
End of year	$ 60,424				$ 38,803				$ 60,424	$ 38,803	$ 8,318

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)
Interest income	$ 43,500	$ 43,246	$ 34,528	$ 31,839	$ 29,981	$ 31,186	$ 32,115	$ 27,967	$ 153,113	$ 121,249	$ 117,796
Interest expense	7,464	6,481	5,128	4,378	4,022	3,921	4,126	3,926	23,451	15,995	12,889
Net interest income	36,036	36,765	29,400	27,461	25,959	27,265	27,989	24,041	129,662	105,254	104,907
Provision for loan losses	6,076	1,489	458	1,533	2,445	1,392	629	1,125	9,556	5,591	11,127
Net interest income after provision for loan losses	29,960	35,276	28,942	25,928	23,514	25,873	27,360	22,916	120,106	99,663	93,780
Noninterest income	13,998	15,403	13,619	16,342	30,486	14,937	14,016	12,618	59,362	72,057	59,482
Noninterest expense	36,192	48,363	37,645	30,797	34,090	28,657	30,904	27,638	152,997	121,289	117,847
Income (loss) before income taxes (benefit)	7,766	2,316	4,916	11,473	19,910	12,153	10,472	7,896	26,471	50,431	35,415
Income taxes	5,775	280	1,377	2,983	8,327	4,102	3,683	2,777	10,415	18,889	11,091
Net income	1,991	2,036	3,539	8,490	$ 11,583	$ 8,051	$ 6,789	$ 5,119	16,056	31,542	24,324
Preferred stock dividends	37	27	19
Net income available to common shareholders	$ 1,954	$ 2,009	$ 3,520	$ 8,490					$ 15,973	$ 31,542	$ 24,324
Per common share data:
Basic earnings per common share (In dollars per share)	$ 0.10	$ 0.10	$ 0.21	$ 0.54	$ 0.74	$ 0.51	$ 0.51	$ 0.43	$ 0.89	$ 2.22	$ 2.03
Diluted earnings per common share (In dollars per share)	$ 0.10	$ 0.10	$ 0.20	$ 0.52	$ 0.72	$ 0.51	$ 0.50	$ 0.42	$ 0.87	$ 2.17	$ 2.00

SUBSEQUENT EVENTS (Details) $ in Thousands	Feb. 28, 2018 USD ($) state shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Subsequent Event [Line Items]
Total assets		$ 4,412,701	$ 3,233,723	$ 2,884,824
Subsequent Events \| Alpine
Subsequent Event [Line Items]
Number of states in which they operate \| state	19
Total consideration	$ 173,200
Cash transferred	$ 33,300
Shares issued \| shares	4,463,200
Total assets	$ 1,240,000
Loans	824,600
Deposits	$ 1,100,000

CASH AND DUE FROM BANKS (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
CASH AND DUE FROM BANKS
Required Cash Reserve	$ 25.0	$ 22.6

LOANS - Risk category (Details) $ in Thousands	12 Months Ended
LOANS - Risk category (Details) $ in Thousands	Dec. 31, 2017 USD ($) region	Dec. 31, 2016 USD ($)
Risk category
Number of main regions \| region	4
Loans and Leases Receivable, Gross, Total	$ 3,226,678	$ 2,319,976
Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	2,196,528	1,604,767
Non-PCI loans
Risk category
Loans and Leases Receivable, Gross, Total	3,204,217	2,291,720
Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	2,180,186	1,583,380
Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	2,087,430	1,511,506
Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	23,787	19,665
Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	42,413	34,277
Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	14,533	10,725
Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	12,023	7,207
Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,024,031	708,340
Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	1,016,214	701,767
Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	7,817	6,573
Commercial \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	555,930	457,827
Commercial \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	553,257	454,310
Commercial \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	510,928	426,560
Commercial \| Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	12,290	10,930
Commercial \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	27,718	12,649
Commercial \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	1,266	3,559
Commercial \| Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	1,055	612
Commercial real estate \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	1,440,011	969,615
Commercial real estate \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	1,427,076	963,895
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	1,384,630	925,244
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	11,497	8,735
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	14,695	21,178
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	12,482	7,145
Commercial real estate \| Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	3,772	1,593
Construction and land development \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	200,587	177,325
Construction and land development \| Non-PCI loans \| Commercial real estate
Risk category
Loans and Leases Receivable, Gross, Total	199,853	165,175
Construction and land development \| Non-PCI loans \| Commercial real estate \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	191,872	159,702
Construction and land development \| Non-PCI loans \| Commercial real estate \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total		450
Construction and land development \| Non-PCI loans \| Commercial real estate \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	785	21
Construction and land development \| Non-PCI loans \| Commercial real estate \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	7,196	5,002
Residential real estate \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	453,552	253,713
Residential real estate \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	447,602	247,156
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	441,418	242,127
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	6,184	5,029
Consumer \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	371,455	270,017
Consumer \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	371,286	269,705
Consumer \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	370,999	269,492
Consumer \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	287	213
Lease financing \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	205,143	191,479
Lease financing \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	205,143	191,479
Lease financing \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	203,797	190,148
Lease financing \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	$ 1,346	$ 1,331

MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	$ 5,966,580	$ 5,644,509
Commercial FHA Mortgage Loans
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	3,976,795	3,811,066
Residential mortgage loans
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	$ 1,989,785	$ 1,833,443