0001558370-20-001800 | 10-K | XBRL Viewer | Midland States Bancorp INC

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Feb. 18, 2020	Jun. 28, 2019
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, 2019
Document Annual Report	true
Document Transition Report	false
Amendment Flag	false
Entity File Number	001-35272
Title of 12(b) Security	Common Stock, $0.01 par value
Entity Incorporation, State or Country Code	IL
Entity Tax Identification Number	37-1233196
Entity Address, Postal Zip Code	62401
Entity Address, Address Line One	1201 Network Centre Drive
Entity Address, City or Town	Effingham
Entity Address, Country	IL
Local Phone Number	342-7321
City Area Code	217
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 600,447,241
Trading Symbol	MSBI
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		24,300,719
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 392,694	$ 210,780
Federal funds sold	1,811	2,920
Cash and cash equivalents	394,505	213,700
Investment securities available for sale, at fair value	649,433	657,451
Equity securities, at fair value	5,621	3,334
Loans	4,401,410	4,137,551
Allowance for loan losses	(28,028)	(20,903)
Total loans, net	4,373,382	4,116,648
Loans held for sale, at fair value	16,431	30,401
Premises and equipment, net	91,055	94,840
Operating lease right-of-use assets	14,224
Other real estate owned	6,745	3,483
Nonmarketable equity securities	44,505	42,472
Accrued interest receivable	16,346	16,560
Loan servicing rights, at lower of cost or fair value	53,824	53,447
Mortgage servicing rights held for sale	1,972	3,545
Goodwill	171,758	164,673
Other intangible assets, net	34,886	37,376
Cash surrender value of life insurance policies	142,423	138,783
Accrued income taxes receivable	6,362	8,809
Deferred tax assets, net		1,251
Other assets	63,545	50,900
Total assets	6,087,017	5,637,673
Deposits:
Noninterest-bearing	1,019,472	972,164
Interest-bearing	3,524,782	3,102,006
Total deposits	4,544,254	4,074,170
Short-term borrowings	82,029	124,235
FHLB advances and other borrowings	493,311	640,631
Subordinated debt	176,653	94,134
Trust preferred debentures	48,288	47,794
Accrued interest payable	6,400	4,855
Deferred tax liabilities, net	11,278
Operating lease liabilities	15,369
Other liabilities	47,524	43,329
Total liabilities	5,425,106	5,029,148
Shareholders' Equity:
Preferred stock, Series H, $2 par value, $1,000 per share liquidation value; 2,636 shares authorized, issued and outstanding at December 31, 2018		2,781
Common stock, $0.01 par value; 40,000,000 shares authorized; 24,420,345 and 23,751,798 shares issued and outstanding at December 31, 2019 and 2018, respectively	244	238
Capital surplus	488,305	473,833
Retained earnings	165,920	133,781
Accumulated other comprehensive income (loss)	7,442	(2,108)
Total shareholders' equity	661,911	608,525
Total liabilities and shareholders' equity	$ 6,087,017	$ 5,637,673

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Liquidation value	$ 1,000	$ 1,000
Preferred stock, par value	$ 2	$ 2
Preferred stock, shares authorized	2,636	2,636
Preferred stock, shares issued		2,636
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	24,420,345	23,751,798
Common stock, shares outstanding	24,420,345	23,751,798

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Loans:
Taxable	$ 218,416	$ 194,688	$ 135,898
Tax exempt	3,593	3,327	1,255
Loans held for sale	1,375	1,749	2,297
Investment securities:
Taxable	14,690	13,894	6,763
Tax exempt	4,098	4,553	3,741
Nonmarketable equity securities	2,395	1,980	1,194
Federal funds sold and cash investments	4,951	3,176	1,965
Total interest income	249,518	223,367	153,113
Interest expense:
Deposits	34,194	22,054	12,132
Short-term borrowings	835	698	379
FHLB advances and other borrowings	13,935	11,347	4,594
Subordinated debt	7,404	6,056	4,054
Trust preferred debentures	3,335	3,125	2,292
Total interest expense	59,703	43,280	23,451
Net interest income	189,815	180,087	129,662
Provision for loan losses	16,985	9,430	9,556
Net interest income after provision for loan losses	172,830	170,657	120,106
Noninterest income:
Wealth management revenue	21,832	20,513	13,340
Commercial FHA revenue	13,170	10,980	17,752
Residential mortgage banking revenue	2,928	5,729	9,119
Service charges on deposit accounts	11,027	10,440	5,975
Interchange revenue	11,992	10,674	5,353
Gain on sales of investment securities, net	674	464	222
Gain on sales of other real estate owned	185	544	145
Other income	13,474	12,447	7,456
Total noninterest income	75,282	71,791	59,362
Noninterest expense:
Salaries and employee benefits	91,906	97,410	78,712
Occupancy and equipment	18,762	18,914	14,659
Data processing	21,582	26,062	15,171
FDIC insurance	776	2,209	1,806
Professional	8,783	12,782	14,359
Marketing	3,927	4,757	3,290
Communications	3,050	4,405	2,473
Loan expense	2,191	2,033	1,954
Other real estate owned	467	524	800
Amortization of intangible assets	7,090	6,956	3,325
(Gain) loss on mortgage servicing rights held for sale	(490)	458	4,059
Other expense	17,597	15,133	12,389
Total noninterest expense	175,641	191,643	152,997
Income before income taxes	72,471	50,805	26,471
Income taxes	16,687	11,384	10,415
Net income	55,784	39,421	16,056
Preferred stock dividends and premium amortization	46	141	83
Net income available to common shareholders	$ 55,738	$ 39,280	$ 15,973
Per common share data:
Basic earnings per common share	$ 2.28	$ 1.69	$ 0.89
Diluted earnings per common share	$ 2.26	$ 1.66	$ 0.87
Weighted average common shares outstanding	24,288,793	23,130,475	17,781,631
Weighted average diluted common shares outstanding	24,493,431	23,549,025	18,283,214

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 55,784	$ 39,421	$ 16,056
Investment securities available for sale:
Unrealized gains (losses) that occurred during the period	13,847	(4,845)	443
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	(674)	(464)	(222)
Income tax effect	(3,623)	1,443	(1,104)
Change in investment securities available for sale, net of tax	9,550	(3,866)	2,483
Investment securities held to maturity:
Amortization of unrealized gain on investment securities transferred from available-for-sale			(188)
Income tax effect			73
Change in investment securities held to maturity, net of tax			(115)
Other comprehensive income (loss), net of tax	9,550	(3,866)	2,368
Total comprehensive income	$ 65,334	$ 35,555	$ 18,424

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Alpine Bank Common stock	Alpine Bank Capital surplus	Alpine Bank	HomeStar Common stock	HomeStar Capital surplus	HomeStar	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)	Total
Beginning 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
Other comprehensive income (loss)																		2,368	2,368
Acquisition during period							$ 1	$ 3,350	$ 3,351	$ 3,071	$ 32	$ 112,480	$ 115,583
Common dividends declared																	(14,008)		(14,008)
Preferred dividends declared																	(184)		(184)
Preferred stock, premium amortization														$ (101)			101		101
Share-based compensation expense																1,384			1,384
Issuance of common stock under employee benefit plans															3	3,222			3,225
Ending Balance at Dec. 31, 2017														2,970	191	330,148	114,478	1,758	449,545
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income																	39,421		39,421
Other comprehensive income (loss)																		(3,866)	(3,866)
Acquisition during period	$ 45	$ 139,876	$ 139,921
Common dividends declared																	(19,977)		(19,977)
Preferred dividends declared																	(330)		(330)
Preferred stock, premium amortization														(189)			189		189
Share-based compensation expense																1,533			1,533
Issuance of common stock under employee benefit plans															2	2,276			2,278
Ending Balance at Dec. 31, 2018														2,781	238	473,833	133,781	(2,108)	608,525
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income																	55,784		55,784
Other comprehensive income (loss)																		9,550	9,550
Acquisition during period				$ 4	$ 10,335	$ 10,339
Common dividends declared																	(23,599)		(23,599)
Common stock repurchased															(2)	(4,017)			(4,019)
Preferred dividends declared																	(191)		(191)
Preferred stock, premium amortization														(145)			145		145
Redemption of Series H preferred stock														$ (2,636)					(2,636)
Share-based compensation expense																2,364			2,364
Issuance of common stock under employee benefit plans															4	5,790			5,794
Ending Balance at Dec. 31, 2019															$ 244	$ 488,305	$ 165,920	$ 7,442	$ 661,911

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Common dividend declared, per share	$ 0.97	$ 0.88	$ 0.80

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net income	$ 55,784	$ 39,421	$ 16,056
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	16,985	9,430	9,556
Depreciation on premises and equipment	6,583	6,166	5,014
Loss on disposals of premises and equipment	32	385	64
Amortization of operating lease right-of-use asset	2,937
Gain on sales of other real estate owned	(185)	(544)	(145)
Impairment of other real estate owned	16	301	244
Amortization of intangible assets	7,090	6,956	3,325
Share-based compensation expense	2,364	1,533	1,384
Increase in cash surrender value of life insurance	(3,640)	(3,579)	(2,791)
Gain on proceeds from bank-owned life insurance		(709)
Provision for deferred income taxes	12,608	10,522	12,032
Investment securities amortization, net	3,757	3,898	1,960
Gain on sales of investment securities, net	(674)	(464)	(222)
Origination of loans held for sale	(504,973)	(557,305)	(778,626)
Proceeds from sales of loans held for sale	530,530	590,282	815,471
Gain on loans sold and held for sale	(15,082)	(11,165)	(24,295)
Amortization of loan servicing rights	2,820	2,949	5,107
Impairment (recapture) of loan servicing rights	2,139	(449)	2,324
(Gain) loss on mortgage servicing rights held for sale	(490)	458	4,059
Impairment of assets held for sale	3,577		1,516
Net change in other operating assets and liabilities:
Accrued interest receivable	1,399	(431)	(1,137)
Accrued interest payable	1,430	1,785	1,211
Accrued income taxes receivable	2,454	(451)	(2,496)
Operating lease liabilities	(3,241)
Other assets	(8,470)	(5,712)	3,673
Other liabilities	3,656	3,783	(2,835)
Net cash provided by operating activities	119,406	97,060	70,449
Investment securities available for sale:
Purchases	(200,231)	(76,289)	(259,098)
Sales	33,464	20,178	22,595
Maturities and payments	239,760	131,220	247,929
Investment securities held to maturity:
Purchases			(3,155)
Maturities			16,889
Equity securities:
Purchases	(82)	(59)
Sales	105	7,733
Net increase in loans	(145,772)	(131,114)	(238,398)
Proceeds from sale of consumer loans held for sale	59,486
Purchases of premises and equipment	(5,538)	(7,200)	(6,182)
Proceeds from sale of premises and equipment	32	33	4,286
Proceeds from sales of other real estate owned	1,647	3,879	6,189
Proceeds from sales of mortgage servicing rights held for sale	3,288	12,994
Proceeds from settlements of bank-owned life insurance		1,449
Purchases of nonmarketable equity securities	(14,263)	(20,737)	(18,376)
Sales of nonmarketable equity securities	12,684	15,099	11,233
Net cash acquired (paid) in acquisitions	69,879	36,153	(18,519)
Net cash provided by (used in) investing activities	54,459	(6,661)	(234,607)
Cash flows from financing activities:
Net increase (decrease) in deposits	148,344	(168,049)	(13,144)
Net (decrease) increase in short-term borrowings	(42,206)	(31,891)	10,135
Proceeds from FHLB borrowings	360,000	1,017,080	447,357
Payments made on FHLB borrowings	(482,190)	(886,726)	(320,857)
Proceeds from other borrowings, net of issuance costs			39,964
Payments made on other borrowings	(32,857)	(4,286)	(3,198)
Proceeds from issuance of subordinated debt, net of issuance costs	98,265		39,354
Payments made on subordinated debt	(17,765)
Cash dividends paid on preferred stock	(191)	(330)	(184)
Redemption of Series H preferred stock	(2,636)
Cash dividends paid on common stock	(23,599)	(19,977)	(14,008)
Common stock repurchased	(4,019)
Proceeds from issuance of common stock under employee benefit plans	5,794	2,278	3,225
Net cash provided by (used in) financing activities	6,940	(91,901)	188,644
Net increase (decrease) in cash and cash equivalents	180,805	(1,502)	24,486
Cash and cash equivalents:
Beginning of period	213,700	215,202	190,716
End of period	394,505	213,700	215,202
Cash payments for:
Interest paid on deposits and borrowed funds	58,158	40,956	21,965
Income tax paid (net of refunds)	479	580	653
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 investment securities available for sale to equity securities		2,830
Transfer of loans to loans held for sale	59,486
Transfer of loans to other real estate owned	3,819	1,104	3,718
Transfer of premises and equipment, net to assets held for sale	4,350		3,988
Lease liabilities arising from obtaining ROU assets	$ 887
Transfer of loan servicing rights, at lower of cost or market to mortgage servicing rights held for sale		$ 3,649	$ 14,234

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MIDLAND STATES BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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. Our wholly-owned banking subsidiary, Midland States Bank, has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management services, and insurance and financial planning services. In addition, multifamily and healthcare facility FHA financing is provided through Love Funding, our non-bank subsidiary.

On July 17, 2019, we completed the acquisition of HomeStar and its banking subsidiary, HomeStar Bank, as more fully described in Note 2 to the consolidated financial statements. Through the acquisition of HomeStar, we expanded our commercial and retail banking presence in northern 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 FHA loan origination and servicing income. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for loan losses and income tax expense.

Basis of Presentation

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 2018 and 2017 amounts have been made to conform to the 2019 presentation but do not have an effect on net income or shareholders’ equity.

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.

Subsequent Events

Management has evaluated subsequent events for recognition and disclosure through February 28, 2020, which is the date the financial statements were available to be issued.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method of accounting, 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, and agency and non-agency mortgage-backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its debt investment securities as available for sale or held to maturity at the time of purchase. 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 (loss) and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. Investments in stock of a publicly traded company or in mutual funds are classified as equity securities. Equity securities are recorded at fair value with unrealized gains and losses recognized in net income.

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; 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 or to the earliest call date 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 noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income (loss).

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”). The Bank is a member of the FHLB system as well as its regional FRB. Members of the FHLB 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 and FRB stock are both 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-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 outstanding principal, net of principal and uncollected interest write-offs, premiums or discounts, and net unamortized deferred fees and costs. 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, unless the loan is well secured and in the process of collection, 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 effective yield 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 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 leased 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 PCI 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 collateral type. 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, loans 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 principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment based upon either the present value of expected future cash flows discounted at the effective interest rate, the 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 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 is charged-off to the allowance if deemed not collectible or 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. 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 and lease losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired loans, (ii) allocations, by classes, on loan and lease portfolios based on historical 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 loans in the Non-PCI 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 classes, on loan and lease portfolios based on historical loss experience and on other factors for the imprecision in the overall allowance methodology. Loans and leases are not evaluated individually for impairment and any individually evaluated loan or lease 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 charge-offs and recoveries and changes in specific reserves. 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 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 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 FHA 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 23 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 exist that indicate that a goodwill impairment test should be performed.

Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are typically 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.

Loan Servicing Rights

When loans are sold with servicing retained, a 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. As the Company has not elected to subsequently measure servicing assets under the fair value measurement method, the Company follows the amortization method. Loan servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Loan servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value.

Loan servicing rights do not trade in an active market with readily observable prices. The fair value of loan 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 distinct portfolios of government-insured residential and commercial mortgages, conventional residential mortgages and Small Business Administration (“SBA”) loans. The Company periodically evaluates its loan 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 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 loan 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 loan servicing rights asset and valuation allowance, precluding subsequent recoveries.

We recognize revenue from servicing commercial FHA mortgages, residential mortgages and SBA loans 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, residential mortgage banking revenue and other noninterest income, respectively, 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 (gain) 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, adjusted for other charges or other amounts due that are probable at settlement, 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 sale 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 revenue and residential mortgage banking revenue.

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 $1.2 million at both December 31, 2019 and 2018.

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.

Share-Based 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

Accounting Guidance Adopted in 2019

FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize leases on-balance sheet and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Targeted Improvements.” The new standard established a ROU model that requires a lessee to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. Under the new guidance, leases are classified as either finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of income. The Company adopted the new standard on January 1, 2019, and used the effective date as its date of initial application.

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

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

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

Accounting Guidance Issued But Not Yet Adopted

FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”).” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better understand their credit loss estimates. This update became effective for the Company on January 1, 2020. The Company is finalizing the economic forecasts and certain other key assumptions used in our CECL model and methodologies, as well as finalizing and validating our internal controls; however, we expect our allowance for credit losses for loans and leases (“ACL”) to increase by an amount in the range of $15.0 million to $25.0 million. A significant portion of this increase is related to the acquired loan portfolio. The ASU eliminates the current accounting model for PCI loans, but requires an allowance be to be recognized for purchased-credit-deteriorated assets, which are assets that have experienced more-than-insignificant deterioration in credit quality since origination. This estimate is subject to change

based on continued refinement and validation of the model and methodologies as well as changes in forecasted macroeconomic conditions. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, portfolio duration, and other factors.

FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – In August 2018, the FASB issued ASU No. 2018-13 to improve the disclosure requirements on fair value measurements. The amendment removes certain disclosures required by Topic 820 related to transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The update also adds certain disclosure requirements related to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. This update became effective for the Company on January 1, 2020. The Company completed its evaluation and determined the adoption of this guidance will not have a material impact on its consolidated financial statements.

FASB ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” – In August 2018, the FASB issued ASU No. 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update became effective for the Company on January 1, 2020. The Company currently evaluates costs incurred for software developed or obtained for internal use or a hosting arrangement that is a service contract to determine which implementation costs should be capitalized as an asset and which costs should be expensed; therefore, the adoption of this new guidance will not have an impact on its consolidated financial statements.

ACQUISITIONS

12 Months Ended

Dec. 31, 2019

ACQUISITIONS

ACQUISITIONS

Note 2 – Acquisitions

HomeStar Financial Group, Inc.

On July 17, 2019, the Company completed its acquisition of HomeStar, and its wholly-owned banking subsidiary, HomeStar Bank, which operated five full-service banking centers in northern Illinois. The Company acquired HomeStar for consideration valued at approximately $11.4 million, which consisted of approximately $1.0 million in cash and the issuance of 404,968 shares of the Company’s common stock. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable tangible and intangible assets acquired and liabilities assumed at their estimated acquisition date fair values, while $7.4 million of transaction and integration costs associated with the acquisition have been expensed during 2019, and any remaining integration costs will be expensed in future periods as incurred.

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. During the fourth quarter of 2019, the Company updated its preliminary valuation of the fair value of loans, deferred tax assets, net, and other liabilities which required a measurement period adjustment of $684,000 to increase goodwill.

Alpine Bancorporation, Inc.

On February 28, 2018, the Company completed its acquisition of Alpine and its wholly-owned banking subsidiary, Alpine Bank, which operated 19 locations in northern Illinois. The Company acquired Alpine for consideration valued at approximately $173.2 million, which consisted of approximately $33.3 million in cash and the issuance of 4,463,200 shares of the Company’s common stock. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable tangible and intangible assets acquired and liabilities assumed at their estimated acquisition date fair values, while $22.4 million of transaction and integration costs were expensed as incurred. As of February 28, 2019, the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of Alpine, resulting in no material change to acquisition accounting adjustments.

Centrue Financial Corporation

On June 9, 2017, the Company completed its acquisition of Centrue and its wholly-owned banking subsidiary, Centrue Bank, which operated 20 full-service banking centers located principally in northern Illinois. 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. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable tangible and intangible assets acquired and liabilities assumed at their estimated acquisition date fair values, while $17.9 million of transaction and integration costs were expensed as incurred. As of June 30, 2018, the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of Centrue, resulting in no material change to acquisition accounting adjustments.

A summary of the fair value of the assets acquired, liabilities assumed and resulting goodwill are included in the table below.


(dollars in thousands)	HomeStar		Alpine		Centrue
Assets acquired:
Cash and cash equivalents	$	70,900	$	69,459	$	42,461
Investment securities available for sale		54,963		293,428		149,013
Equity securities		2,153		8,372		—
Loans		211,070		786,186		679,582
Loans held for sale		3,562		3,416		531
Premises and equipment		4,049		18,126		17,147
Operating lease right-of-use asset		5,177		—		—
Other real estate owned		1,092		53		4,983
Nonmarketable equity securities		454		2,038		8,168
Accrued interest receivable		1,185		4,414		2,376
Loan servicing rights		1,089		—		1,933
Mortgage servicing rights held for sale		1,701		3,068		—
Intangible assets		4,600		27,400		11,070
Cash surrender value of life insurance policies		—		22,578		36,349
Accrued income taxes receivable		7		—		—
Deferred tax assets, net		3,702		—		34,339
Other assets		1,511		4,770		2,256
Total assets acquired		367,215		1,243,308		990,208
Liabilities assumed:
Deposits		321,740		1,111,130		739,867
Short-term borrowings		—		—		14,434
FHLB advances and other borrowings		31,369		18,127		95,332
Trust preferred debentures		—		—		7,565
Accrued interest payable		115		539		275
Operating lease liabilities		6,241		—		—
Deferred tax liabilities, net		—		1,749		—
Other liabilities		3,475		4,500		3,600
Total liabilities assumed		362,940		1,136,045		861,073
Net assets acquired		4,275		107,263		129,135
Goodwill		7,085		65,964		47,444
Total consideration paid	$	11,360	$	173,227	$	176,579

Intangible assets:
Core deposit intangible	$	4,300	$	21,100	$	11,070
Customer relationship intangible		300		6,300		—
Total intangible assets	$	4,600	$	27,400	$	11,070
Estimated useful lives:
Core deposit intangible		12 years		13 years		8 years
Customer relationship intangible		6 years		13 years		N/A

Goodwill arising from the acquisitions consisted largely of synergies and economies of scale expected from the combining of the operations of companies. 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 from HomeStar, Alpine and Centrue included core deposit intangibles and customer relationship intangibles, which are being amortized on an accelerated basis as shown above.

Acquired loan data for HomeStar, Alpine and Centrue can be found in the table below:


					Best Estimate at
					Acquisition Date of
	Fair Value		Gross Contractual		Contractual Cash
	of Acquired Loans		Amounts Receivable		Flows Not Expected
(dollars in thousands)	at Acquisition Date		at Acquisition Date		to be Collected
HomeStar:
Acquired receivables subject to ASC 310-30	$	17,553	$	19,587	$	1,607
Acquired receivables not subject to ASC 310-30		193,517		203,693		5,281
Alpine:
Acquired receivables subject to ASC 310-30	$	34,993	$	50,342	$	9,254
Acquired receivables not subject to ASC 310-30		751,193		774,836		4,244
Centrue:
Acquired receivables subject to ASC 310-30	$	11,381	$	20,253	$	7,227
Acquired receivables not subject to ASC 310-30		668,201		821,338		4,835

The following unaudited supplemental pro-forma financial information for the years ended December 31, 2019 and 2018 reflects the Company’s estimated consolidated results of operations as if the acquisitions of HomeStar and Alpine had occurred on January 1, 2018, adjusted for the impact of the application of the acquisition method of accounting including loan discount accretion, intangible assets amortization, and deposit premium accretion, net of taxes. The unaudited pro-forma financial information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations had the acquisitions actually occurred on January 1, 2018. No assumptions have been applied regarding revenue enhancements, expense efficiencies or asset dispositions.


(dollars in thousands, except per share data)	2019		2018
Revenue ⁽¹⁾	$	275,179	$	282,648
Net income		58,422		48,318
Diluted earnings per common share		2.34		1.94

(1)	Net interest income plus noninterest income

CASH AND DUE FROM BANKS

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018 was $36.9 million and $33.6 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, 2019

INVESTMENT SECURITIES

INVESTMENT SECURITIES

Note 4 – Investment Securities

Available-for-Sale Investment Securities

The following table summarizes the amortized cost, fair value and corresponding gross unrealized gains and losses of available-for-sale investment securities at December 31, 2019 and 2018:


	2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available-for-sale securities:
U.S. government sponsored entities and U.S. agency securities	$	59,600	$	442	$	22	$	60,020
Mortgage-backed securities - agency		321,840		3,368		234		324,974
Mortgage-backed securities - non-agency		17,198		3		53		17,148
State and municipal securities		119,371		5,195		11		124,555
Corporate securities		121,159		2,131		554		122,736
Total available-for-sale securities	$	639,168	$	11,139	$	874	$	649,433


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

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


	2019
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available-for-sale securities:
U.S. government sponsored entities and U.S. agency securities	$	7,200	$	22	$	—	$	—	$	7,200	$	22
Mortgage-backed securities - agency		75,336		170		7,170		64		82,506		234
Mortgage-backed securities - non-agency		11,059		53		—		—		11,059		53
State and municipal securities		1,813		11		—		—		1,813		11
Corporate securities		20,269		481		3,915		73		24,184		554
Total available-for-sale securities	$	115,677	$	737	$	11,085	$	137	$	126,762	$	874


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

For all of the above available-for-sale investment securities, the unrealized losses are generally due to changes in interest rates, and unrealized losses are considered to be temporary as the fair value is expected to recover as the securities approach their respective maturity dates.

At December 31, 2019, 46 investment securities available for sale had unrealized losses with aggregate depreciation of 0.68% from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. The Company does not have the intent to sell and it is not more likely than not that it will be required to sell a security in an unrealized loss position prior to recovery in value; therefore, the Company does not consider these securities to be other than temporarily impaired at December 31, 2019.

During 2019, 2018 and 2017, the Company did not recognize OTTI losses on its investment securities.

The following is a summary of the amortized cost and fair value of available-for-sale investment securities, by maturity, at December 31, 2019. Expected maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be prepaid without penalties. The maturities of all other available-for-sale investment securities are based on final contractual maturity.

c
	Amortized		Fair
(dollars in thousands)	cost		value
Available-for-sale securities:
Within one year	$	37,463	$	37,669
After one year through five years		73,251		75,147
After five years through ten years		169,906		173,900
After ten years		19,510		20,595
Mortgage-backed securities		339,038		342,122
Total available-for-sale securities	$	639,168	$	649,433

Proceeds from the sale of available-for-sale investment securities and the resulting gross realized gains (losses) for the years ended December 31, 2019, 2018 and 2017 are summarized below:


(dollars in thousands)	2019		2018		2017
Available-for-sale securities:
Proceeds from sales	$	33,464	$	20,178	$	22,595
Gross realized gains on sales		786		542		242
Gross realized losses on sales		(190)		(25)		(20)

Equity Securities

Equity securities are recorded at fair value and totaled $5.6 million and $3.3 million at December 31, 2019 and 2018, respectively. Proceeds from the sale of equity securities and the resulting gross realized gains (losses), and net unrealized gains (losses) on equity securities for the years ended December 31, 2019, 2018 and 2017 are summarized below:


(dollars in thousands)	2019		2018		2017 ⁽¹⁾
Equity securities:
Proceeds from sales	$	105	$	7,733		N/A
Gross realized gains on sales		78		—		N/A
Gross realized losses on sales		—		(53)		N/A
Net unrealized gains (losses) ⁽²⁾		93		(10)		N/A

(1)	As a result of accounting guidance adopted by the Company in the first quarter of 2018, equity securities were no longer presented within available for sale securities. Prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP.

(2)	Net unrealized gains (losses) on equity securities are recorded in other income in the consolidated statements of income.

LOANS

12 Months Ended

Dec. 31, 2019

LOANS

LOANS

Note 5 – Loans

The following table presents total loans outstanding by portfolio, which includes Non-PCI loans and PCI loans, at December 31, 2019 and 2018:


	2019						2018
	Non-PCI		PCI				Non-PCI		PCI
(dollars in thousands)	Loans		Loans ⁽¹⁾		Total		Loans		Loans ⁽¹⁾		Total
Loans:
Commercial	$	1,052,107	$	3,078	$	1,055,185	$	806,027	$	4,857	$	810,884
Commercial real estate		1,506,397		20,107		1,526,504		1,619,903		19,252		1,639,155
Construction and land development		203,056		5,677		208,733		223,898		8,331		232,229
Total commercial loans		2,761,560		28,862		2,790,422		2,649,828		32,440		2,682,268
Residential real estate		555,654		12,637		568,291		569,289		8,759		578,048
Consumer		708,904		1,212		710,116		611,408		1,776		613,184
Lease financing		332,581		—		332,581		264,051		—		264,051
Total loans	$	4,358,699	$	42,711	$	4,401,410	$	4,094,576	$	42,975	$	4,137,551

(1)	The customers’ unpaid principal balance for PCI loans totaled $51.9 million and $56.9 million as of December 31, 2019 and 2018, respectively.

Total loans include net deferred loan fees of $2.2 million and $11.6 million at December 31, 2019 and 2018, respectively, and unearned discounts of $39.6 million and $29.2 million within the lease financing portfolio at December 31, 2019 and 2018, respectively.

At December 31, 2019 and 2018, the Company had commercial and residential loans held for sale totaling $16.4 million and $30.4 million, respectively. During the years ended December 31, 2019 and 2018, the Company sold commercial real estate and residential real estate loans with proceeds totaling $530.1 million and $590.3 million, respectively. During the year ended December 31, 2019, the Company sold consumer loans with proceeds totaling $59.5 million.

Classifications of Loan Portfolio

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 or acquiring automobiles, recreational vehicles and boats. Consumer loans consist of relatively small amounts that are spread across many individual borrowers.

Lease financing—Our equipment leasing business provides financing leases to varying types of businesses, nationwide, for purchases of business equipment and software. The financing is secured by a first priority interest in the financed assets and generally requires monthly payments.

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, 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 $23.0 million and $26.5 million at December 31, 2019 and 2018, respectively. During 2019 and 2018, there were $3.4 million and $11.1 million, respectively, of new loans and other additions, while repayments and other reductions totaled $6.9 million and $6.9 million, respectively.

Credit Quality Monitoring

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

The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

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

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

Credit Quality Indicators

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

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


	2019								2018
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
(dollars in thousands)	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	1,005,442	$	1,398,400	$	194,992	$	2,598,834	$	748,296	$	1,536,127	$	218,798	$	2,503,221
Special mention		17,435		18,450		2,420		38,305		35,103		15,306		3,448		53,857
Substandard		23,387		67,805		1,250		92,442		14,139		46,976		—		61,115
Substandard – nonaccrual		5,843		21,742		1,304		28,889		8,489		21,494		1,171		31,154
Doubtful		—		—		—		—		—		—		—		—
Not graded		—		—		3,090		3,090		—		—		481		481
Total (excluding PCI)	$	1,052,107	$	1,506,397	$	203,056	$	2,761,560	$	806,027	$	1,619,903	$	223,898	$	2,649,828

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


	2019								2018
	Residential				Lease				Residential				Lease
(dollars in thousands)	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	546,630	$	708,528	$	330,988	$	1,586,146	$	562,019	$	610,839	$	263,094	$	1,435,952
Impaired		9,024		376		1,593		10,993		7,270		569		957		8,796
Total (excluding PCI)	$	555,654	$	708,904	$	332,581	$	1,597,139	$	569,289	$	611,408	$	264,051	$	1,444,748

Impaired Loans

Impaired loans include loans on nonaccrual status, loans past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings. Impaired loans at December 31, 2019 and 2018 do not include $42.7 million and $43.0 million, respectively, of PCI loans. The risk of credit loss on acquired loans was recognized as part of the fair value adjustment at the acquisition date.

There was no interest income recognized on nonaccrual loans during 2019, 2018 and 2017 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 $2.2 million, $1.8 million and $860,000 in 2019, 2018 and 2017, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $117,000, $97,000 and $85,000 in 2019, 2018 and 2017, respectively.

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


	2019						2018
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
(dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	4,562	$	4,672	$	3,632	$	7,945	$	8,102	$	4,448
Commercial real estate		14,603		17,765		6,068		7,496		13,844		523
Construction and land development		104		150		14		171		171		54
Residential real estate		5,319		6,138		734		4,055		4,662		554
Consumer		368		488		39		428		444		45
Lease financing		1,258		1,259		278		766		766		361
Total impaired loans with a valuation allowance		26,214		30,472		10,765		20,861		27,989		5,985
Impaired loans with no related valuation allowance:
Commercial		1,716		5,210		—		983		4,392		—
Commercial real estate		8,859		15,716		—		16,372		16,921		—
Construction and land development		1,245		1,252		—		1,136		1,136		—
Residential real estate		3,705		4,413		—		3,215		3,516		—
Consumer		8		9		—		141		145		—
Lease financing		335		335		—		191		191		—
Total impaired loans with no related valuation allowance		15,868		26,935		—		22,038		26,301		—
Total impaired loans:
Commercial		6,278		9,882		3,632		8,928		12,494		4,448
Commercial real estate		23,462		33,481		6,068		23,868		30,765		523
Construction and land development		1,349		1,402		14		1,307		1,307		54
Residential real estate		9,024		10,551		734		7,270		8,178		554
Consumer		376		497		39		569		589		45
Lease financing		1,593		1,594		278		957		957		361
Total impaired loans (excluding PCI)	$	42,082	$	57,407	$	10,765	$	42,899	$	54,290	$	5,985

The difference between a loan’s recorded investment and the unpaid principal balance represents: (1) a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan’s principal balance and management’s assessment that the full collection of the loan balance is not likely and/or (2) payments received on nonaccrual loans that are fully applied to principal on the loan’s recorded investment as compared to being applied to principal and interest on the unpaid customer principal and interest balance. The difference between the recorded investment and the unpaid principal balance was $15.3 million and $11.4 million at December 31, 2019 and 2018, respectively.

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the years ended December 31, 2019, 2018 and 2017 are included in the table below:


	2019				2018				2017
			Interest Income				Interest Income				Interest Income
	Average		Recognized		Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	4,737	$	28	$	8,359	$	30	$	2,969	$	15
Commercial real estate		16,786		77		8,082		45		5,408		70
Construction and land development		113		—		175		3		83		4
Residential real estate		5,528		33		3,855		41		3,854		38
Consumer		505		—		360		—		299		—
Lease financing		1,259		—		766		—		1,064		—
Total impaired loans with a valuation allowance		28,928		138		21,597		119		13,677		127
Impaired loans with no related valuation allowance:
Commercial		2,029		—		1,233		—		2,369		—
Commercial real estate		9,631		12		16,253		22		16,822		—
Construction and land development		1,254		3		1,152		—		815		—
Residential real estate		3,993		17		3,348		22		2,055		3
Consumer		10		1		95		—		13		—
Lease financing		335		—		191		—		282		—
Total impaired loans with no related valuation allowance		17,252		33		22,272		44		22,356		3
Total impaired loans:
Commercial		6,766		28		9,592		30		5,338		15
Commercial real estate		26,417		89		24,335		67		22,230		70
Construction and land development		1,367		3		1,327		3		898		4
Residential real estate		9,521		50		7,203		63		5,909		41
Consumer		515		1		455		—		312		—
Lease financing		1,594		—		957		—		1,346		—
Total impaired loans (excluding PCI)	$	46,180	$	171	$	43,869	$	163	$	36,033	$	130

The aging status of the recorded investment in loans by portfolio (excluding PCI loans) at December 31, 2019 and 2018 are included in the table below:


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
(dollars in thousands)	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
December 31, 2019
Commercial	$	5,910	$	3,086	$	—	$	5,843	$	14,839	$	1,037,268	$	1,052,107
Commercial real estate		2,895		399		—		21,742		25,036		1,481,361		1,506,397
Construction and land development		1,539		72		—		1,304		2,915		200,141		203,056
Residential real estate		588		1,561		145		7,796		10,090		545,564		555,654
Consumer		6,701		4,154		—		341		11,196		697,708		708,904
Lease financing		1,783		1,188		218		1,375		4,564		328,017		332,581
Total loans (excluding PCI)	$	19,416	$	10,460	$	363	$	38,401	$	68,640	$	4,290,059	$	4,358,699

December 31, 2018
Commercial	$	4,013	$	2,581	$	4	$	8,489	$	15,087	$	790,940	$	806,027
Commercial real estate		1,667		945		149		21,494		24,255		1,595,648		1,619,903
Construction and land development		989		—		85		1,171		2,245		221,653		223,898
Residential real estate		1,292		728		566		5,894		8,480		560,809		569,289
Consumer		5,211		2,533		51		388		8,183		603,225		611,408
Lease financing		4,322		932		206		751		6,211		257,840		264,051
Total loans (excluding PCI)	$	17,494	$	7,719	$	1,061	$	38,187	$	64,461	$	4,030,115	$	4,094,576

Troubled Debt Restructurings

Loans modified as TDRs for commercial and commercial real estate loans generally consist of allowing commercial borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans’ contractual terms. TDRs that continue to accrue interest and are greater than $50,000 are individually evaluated for impairment, on a quarterly basis, and transferred to nonaccrual status when it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the contractual terms of the loan. TDRs that subsequently default are individually evaluated for impairment at the time of default. The allowance for loan losses

on TDRs totaled $2.0 million and $557,000 as of December 31, 2019 and 2018, respectively. The Company had no unfunded commitments in connection with TDRs at December 31, 2019 and 2018.

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


	2019						2018
(dollars in thousands)	Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total		Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total
Commercial	$	435	$	369	$	804	$	435	$	406	$	841
Commercial real estate		1,720		9,834		11,554		2,225		9,103		11,328
Construction and land development		45		167		212		51		—		51
Residential real estate		1,083		1,993		3,076		810		853		1,663
Consumer		35		—		35		130		—		130
Lease financing		—		55		55		—		—		—
Total loans (excluding PCI)	$	3,318	$	12,418	$	15,736	$	3,651	$	10,362	$	14,013

(1)	These loans are still accruing interest.

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

The following table presents a summary of loans by portfolio that were restructured during the years ended December 31, 2019, 2018 and 2017 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the years ended December 31, 2019, 2018 and 2017:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the year ended December 31, 2019:
Troubled debt restructurings:
Number of loans		1		3		2		25		5		1		37
Pre-modification outstanding balance	$	249	$	1,924	$	221	$	1,422	$	26	$	55	$	3,897
Post-modification outstanding balance		249		1,322		167		1,322		25		55		3,140

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

For the year ended December 31, 2018:
Troubled debt restructurings:
Number of loans		2		2		—		7		25		—		36
Pre-modification outstanding balance	$	423	$	1,571	$	—	$	708	$	130	$	—	$	2,832
Post-modification outstanding balance		408		1,565		—		696		130		—		2,799

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

For the year ended December 31, 2017:
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	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Purchased Credit Impaired Loans

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

Accretable yield of PCI loans, or income expected to be collected, for the years ended December 31, 2019, 2018 and 2017 were as follows:


(dollars in thousands)	2019		2018		2017
Balance, beginning of period	$	12,240	$	5,732	$	9,035
New loans purchased – HomeStar acquisition		427		—		—
New loans purchased – Alpine acquisition		—		6,095		—
New loans purchased – Centrue acquisition		—		—		1,929
Accretion		(6,423)		(6,092)		(5,546)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		3,785		2,682		120
Reclassification from non-accretable		2,038		3,823		194
Balance, end of period	$	12,067	$	12,240	$	5,732

Accretion recorded as loan interest income totaled $6.4 million, $6.1 million and $5.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Allowance for Loan Losses

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

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

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

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

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

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

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

The following table presents, by loan portfolio, a summary of changes in the allowance for loan losses for the years ended December 31, 2019, 2018 and 2017:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for loan losses		3,852		7,939		(53)		1,392		1,767		2,088		16,985
Charge-offs		(3,412)		(3,339)		(44)		(1,076)		(1,946)		(2,251)		(12,068)
Recoveries		67		949		15		142		667		368		2,208
Balance, end of period	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028

Changes in allowance for loan losses in 2018:
Balance, beginning of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Provision for loan losses		4,941		(207)		(227)		(517)		2,156		3,284		9,430
Charge-offs		(1,236)		(492)		—		(361)		(1,876)		(3,024)		(6,989)
Recoveries		563		378		81		169		530		310		2,031
Balance, end of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903

Changes in allowance for loan losses in 2017:
Balance, beginning of period	$	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
Balance, end of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431

The following table presents, by loan portfolio, details regarding the balance in the allowance for loan losses and the recorded investment in loans at December 31, 2019 and 2018 by impairment evaluation method:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
December 31, 2019:

Allowance for loan losses:
Loans individually evaluated for impairment	$	3,563	$	5,968	$	—	$	290	$	—	$	156	$	9,977
Loans collectively evaluated for impairment		69		100		14		444		39		122		788
Non-impaired loans collectively evaluated for impairment		6,380		3,643		272		1,269		2,500		2,016		16,080
Loans acquired with deteriorated credit quality ⁽¹⁾		19		561		4		496		103		—		1,183
Total allowance for loan losses	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	5,767	$	22,698	$	1,245	$	5,329	$	—	$	697	$	35,736
Impaired loans collectively evaluated for impairment		511		764		104		3,695		376		896		6,346
Non-impaired loans collectively evaluated for impairment		1,045,829		1,482,935		201,707		546,630		708,528		330,988		4,316,617
Loans acquired with deteriorated credit quality ⁽¹⁾		3,078		20,107		5,677		12,637		1,212		—		42,711
Total recorded investment (loan balance)	$	1,055,185	$	1,526,504	$	208,733	$	568,291	$	710,116	$	332,581	$	4,401,410

December 31, 2018:

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

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

PREMISES AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2019

PREMISES AND EQUIPMENT, NET

PREMISES AND EQUIPMENT, NET

Note 6 – Premises and Equipment, Net

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


(dollars in thousands)	2019		2018
Land	$	19,123	$	20,231
Buildings and improvements		77,296		76,141
Furniture and equipment		31,846		29,858
Total		128,265		126,230
Accumulated depreciation		(37,210)		(31,390)
Premises and equipment, net	$	91,055	$	94,840

Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $6.6 million, $6.2 million, and $5.0 million, respectively.

During the third quarter of 2019, the Company committed to a branch network consolidation plan, which included the closing of one facility and consolidation of two additional facilities during the fourth quarter of 2019 as a result of the acquisition of HomeStar, as further discussed in Note 2 to the consolidated financial statements. The Company also planned to consolidate three other existing facilities in other areas of its footprint; one of which closed in

2019 and the remaining two facilities closed in the first quarter of 2020. Consequently, during the year ended December 31, 2019, the Company recorded $3.2 million of asset impairment on banking facilities to be closed, which was recognized in other expense in the consolidated statements of income. Assets held for sale were $4.0 million and $1.7 million at December 31, 2019 and 2018, respectively, which are included in other assets in our consolidated balance sheets.

LEASES

12 Months Ended

Dec. 31, 2019

LEASES

LEASES

Note 7 – Leases

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

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

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

As of December 31, 2019, operating lease ROU assets totaled $14.2 million and operating lease liabilities totaled $15.4 million.

Information related to operating leases for the year ended December 31, 2019 was as follows:


(dollars in thousands)	2019
Operating lease cost	$	2,752
Operating cash flows related to leases		3,241
Right-of-use assets obtained in exchange for lease obligations		18,482
Weighted average remaining lease term		8.01 years
Weighted average discount rate		2.98	%

Net rent expense under operating leases included in occupancy and equipment expense was $2.7 million, $3.2 million and $2.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The projected minimum rental payments under the terms of the leases as of December 31, 2019 are as follows:


(dollars in thousands)	Amount
Year ending December 31:
2020	$	2,814
2021		2,854
2022		2,677
2023		2,120
2024		1,340
Thereafter		5,588
Total future minimum lease payments		17,393
Less imputed interest		(2,024)
Total operating lease liabilities	$	15,369

LOAN SERVICING RIGHTS

12 Months Ended

Dec. 31, 2019

LOAN SERVICING RIGHTS

LOAN SERVICING RIGHTS

Note 8 – Loan Servicing Rights

Commercial FHA Mortgage Loan Servicing

The Company serviced commercial FHA mortgage loans for others with unpaid principal balances of approximately $4.08 billion and $3.98 billion at December 31, 2019 and 2018, respectively. Changes in our commercial FHA mortgage servicing rights were as follows for the years ended December 31, 2019, 2018 and 2017:


(dollars in thousands)	2019		2018		2017
Loan servicing rights:
Balance, beginning of period	$	56,252	$	55,714	$	52,006
Originated servicing		4,124		3,174		6,287
Amortization		(2,739)		(2,636)		(2,579)
Balance, end of period		57,637		56,252		55,714
Valuation allowances:
Balance, beginning of period		2,805		3,254		1,712
Additions		2,698		931		1,542
Reductions		(559)		(1,380)		—
Balance, end of period		4,944		2,805		3,254
Loan servicing rights, net	$	52,693	$	53,447	$	52,460
Fair value:
At beginning of period	$	53,447	$	52,460	$	50,294
At end of period	$	52,693	$	53,447	$	52,460

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


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
December 31, 2019:
Commercial FHA mortgage loans	0.12	%	3.68	%	29.9	8.20	%	$	1,000	10 - 14	%

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

United States Small Business Administration Loan Servicing

As a result of the acquisition of HomeStar, as further discussed in Note 2 to the consolidated financial statements, the Company acquired SBA loan servicing rights. At December 31, 2019, the Company serviced SBA loans for others with unpaid principal balances of $48.2 million. At December 31, 2019, SBA loan servicing rights of $1.1 million are reflected in loan servicing rights in the consolidated balance sheet.

Residential Mortgage Loan Servicing

At December 31, 2019 and 2018, the Company serviced residential mortgage loans for others with unpaid principal balances of $381.6 million and $897.6 million, respectively. During the years ended December 31, 2019 and 2018, the Company sold mortgage servicing rights held for sale of $3.3 million and $10.2 million, respectively. There were no sales of mortgage servicing rights held for sale during the year ended December 31, 2017. During the year ended December 31, 2017, the Company recognized a $4.1 million loss to reflect certain residential mortgage servicing rights classified as held for sale at the lower of their carrying value or fair value less estimated costs to sell, which were sold on January 2, 2018. Subsequent to the sale, the Company transferred all remaining residential mortgage servicing rights to mortgage servicing rights held for sale. At December 31, 2019, total residential mortgage servicing rights of $2.0 million are reflected in mortgage servicing rights held for sale in the consolidated balance sheet.

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2019

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Note 9 – Goodwill and Other Intangible Assets, Net

At December 31, 2019 and 2018, goodwill totaled $171.8 million and $164.7 million, respectively, reflecting an increase of $7.1 million as a result of the acquisition of HomeStar, as further discussed in Note 2 to the consolidated financial statements. 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, 2019 and concluded that no impairment existed as of that date.

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


(dollars in thousands)	2019		2018
Banking	$	156,120	$	149,035
Commercial FHA origination and servicing		10,892		10,892
Wealth management		4,746		4,746
Total goodwill	$	171,758	$	164,673

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


	2019						2018
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
(dollars in thousands)	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	57,012	$	(30,674)	$	26,338	$	52,712	$	(24,803)	$	27,909
Customer relationship intangibles		14,071		(5,523)		8,548		13,771		(4,304)		9,467
Total intangible assets	$	71,083	$	(36,197)	$	34,886	$	66,483	$	(29,107)	$	37,376

In conjunction with the acquisition of HomeStar, the Company recorded $4.3 million of core deposit intangibles and $300,000 of customer relationship intangibles, which are being amortized on an accelerated basis over an estimated useful life of 12 years and six years, respectively.

Amortization of intangible assets was $7.1 million, $7.0 million and $3.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Estimated amortization expense for future years is as follows:


(dollars in thousands)	Amount
Year ending December 31,
2020	$	6,504
2021		5,675
2022		4,900
2023		4,125
2024		3,563
Thereafter		10,119
Total	$	34,886

DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2019

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Note 10 – Derivative Instruments

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

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

The Company issues interest rate lock commitments on originated fixed-rate commercial and residential real estate loans to be sold. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets 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 tables summarize 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, 2019 and 2018:


	Notional Amount				Fair Value Gain
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	222,654	$	264,710	$	3,350	$	4,492
Forward commitments to sell mortgage-backed securities		221,052		276,871		—		—
Total	$	443,706	$	541,581	$	3,350	$	4,492


	Notional Amount				Fair Value Loss
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	—	$	54	$	—	$	—

During the years ended December 31, 2019, 2018 and 2017, the Company recognized net losses of $1.1 million, $2.0 million and $16,000, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Interest Rate Swap Contracts

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

The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $9.0 million and $9.5 million at December 31, 2019 and 2018, respectively. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $306,000 and $145,000 at December 31, 2019 and 2018, respectively, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

DEPOSITS

12 Months Ended

Dec. 31, 2019

DEPOSITS

DEPOSITS

Note 11 – Deposits

The following table summarizes the classification of deposits at December 31, 2019 and 2018:


(dollars in thousands)	2019		2018
Noninterest-bearing demand	$	1,019,472	$	972,164
Interest-bearing:
Checking		1,342,788		1,002,275
Money market		787,662		862,171
Savings		522,456		442,132
Time		871,876		795,428
Total deposits	$	4,544,254	$	4,074,170

Included in time deposits are time certificates of $250,000 or more and brokered certificates of deposits of $122.7 million and $49.7 million as of December 31, 2019, respectively, and $76.0 million and $161.6 million as of December 31, 2018, respectively.

Investment securities with a carrying amount of $234.1 million and $182.4 million were pledged for public deposits at December 31, 2019 and 2018, respectively. Standby letters of credit issued by the FHLB on our behalf of $80.0 million and $120.0 million were pledged for public deposits at December 31, 2019 and 2018, respectively.

As of December 31, 2019, the scheduled maturities of time deposits were as follows:


(dollars in thousands)	Amount
Year ending December 31,
2020	$	507,606
2021		306,376
2022		32,304
2023		18,204
2024		7,367
Thereafter		19
Total	$	871,876

SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2019

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

Note 12 – Short-Term Borrowings

The following table summarizes the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2019 and 2018:


	Repurchase Agreements
(dollars in thousands)	2019			2018
Outstanding at period-end	$	82,029		$	124,235
Average amount outstanding		121,168			138,135
Maximum amount outstanding at any month end		138,907			173,387
Weighted average interest rate:
During period		0.69	%		0.51	%
End of period		0.67	%		0.71	%

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $87.4 million and $132.2 million at December 31, 2019 and 2018, respectively, were pledged for securities sold under agreements to repurchase.

The Company had lines of credit of $21.6 million and $56.8 million at December 31, 2019 and 2018, respectively, from the Federal Reserve Discount Window. The lines are collateralized by a collateral agreement with respect to a pool of commercial real estate loans totaling $24.3 million and $67.6 million at December 31, 2019 and 2018, respectively. There were no outstanding borrowings at December 31, 2019 and 2018.

At December 31, 2019, the Company had federal funds lines of credit totaling $20.0 million. These lines of credit were unused at December 31, 2019.

FHLB ADVANCES AND OTHER BORROWINGS

12 Months Ended

Dec. 31, 2019

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

Note 13 – FHLB Advances and Other Borrowings

The following table summarizes our FHLB advances and other borrowings at December 31, 2019 and 2018:


(dollars in thousands)	2019		2018
Midland States Bancorp, Inc.
Term loan – variable interest rate equal to LIBOR plus 2.25%, which was 4.63% at December 31, 2018	$	—	$	32,840
Series G redeemable preferred stock – 181 shares at $1,000 per share		181		181
Midland States Bank
FHLB advances – fixed rate, fixed term of $28.0 million and $87.7 million, at rates averaging 2.56% and 2.35% at December 31, 2019 and 2018, respectively – maturing through June 2023, and putable fixed rate of $465.0 million and $520.0 million at rates averaging 2.34% and 2.09% at December 31, 2019 and 2018, respectively, – maturing through August 2025 with call provisions through August 2021		493,130		607,610
Total FHLB advances and other borrowings	$	493,311	$	640,631

In May 2017, the Company entered into a loan agreement with another bank for a revolving line of credit in the original principal amount of up to $10.0 million and a term loan in the original principal amount of $40.0 million. The

term loan had a maturity date of May 25, 2020. In September 2019, the Company paid off the term loan and terminated the revolving line of credit.

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 $1.94 billion and $2.22 billion at December 31, 2019 and 2018, respectively.

Contractual payments over the next five years for FHLB advances and other borrowings were as follows:


(dollars in thousands)	Amount
2020	$	3,897
2021		8,385
2022		65,754
2023		235,094
2024		100,000
Thereafter		80,181
Total	$	493,311

SUBORDINATED DEBT

12 Months Ended

Dec. 31, 2019

SUBORDINATED DEBT

SUBORDINATED DEBT

Note 14 – Subordinated Debt

The following table summarizes the Company’s subordinated debt at December 31, 2019 and 2018:


(dollars in thousands)	2019		2018
Subordinated debt issued June 2015 – fixed interest rate of 6.00% through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $38,325 and $40,325 at December 31, 2019 and 2018, respectively – maturing June 18, 2025	$	38,273	$	39,871
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $550 and $15,000 at December 31, 2019 and 2018, respectively – maturing June 18, 2025		544		14,831
Subordinated debt issued October 2017 - fixed interest rate of 6.25% through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 – maturing October 15, 2027		39,496		39,432
Subordinated debt issued September 2019 – fixed interest rate of 5.00% through September 2024 and a variable interest rate equivalent to three month SOFR plus 3.61% thereafter, $72,750 – maturing September 30, 2029		71,549		—
Subordinated debt issued September 2019 – fixed interest rate of 5.50% through September 2029 and a variable interest rate equivalent to three month SOFR plus 4.05% thereafter, $27,250 – maturing September 30, 2034		26,791		—
Total subordinated debt	$	176,653	$	94,134

In June 2015, the Company issued, through a private placement, $55.3 million aggregate principal amount of subordinated debentures. 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 of debt issuance costs, which are being amortized on a straight line basis through the earlier of the redemption option or maturity date of the subordinated debentures. During the fourth quarter of 2019, the Company repurchased $2.0 million of the $40.3 million subordinated debentures and $14.5 million of the $15.0 million subordinated debentures and recognized losses of $1.4 million and $0.4 million, respectively, which included the premium paid for the repurchase and the remaining unamortized debt issuance costs on such repurchases, in other noninterest expense in the consolidated statements of income.

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 $0.6 million of debt issuance costs, which are being amortized on a straight line basis through the maturity of the subordinated debentures.

On September 20, 2019, the Company issued, through a private placement, $100.0 million aggregate principal amount of subordinated debentures. The transaction was structured in two tranches: (1) $72.75 million, maturing on September 30, 2029 with a redemption option on or after September 30, 2024, with a fixed rate of interest of 5.00% for the first five years, payable semiannually in arrears beginning March 30, 2020, and a floating rate of interest equivalent to the three-month Secured Overnight Financing Rate (“SOFR”) plus 361.0 basis points thereafter, payable quarterly in arrears beginning on December 30, 2024; and (2) $27.25 million, maturing on September 30, 2034 with a redemption option on or after September 30, 2029, with a fixed rate of interest of 5.50% for the first ten years, payable semiannually in arrears beginning March 30, 2020, and a floating rate of interest equivalent to the three-month SOFR plus 404.5 basis points thereafter, payable quarterly in arrears beginning on December 30, 2029. The value of the subordinated debentures was reduced by $1.6 million of debt issuance costs, which are being amortized on a straight line basis through the redemption option of the subordinated debentures.

All of the subordinated debentures mentioned above 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, 2019

TRUST PREFERRED DEBENTURES

TRUST PREFERRED DEBENTURES

Note 15 – Trust Preferred Debentures

The following table summarizes the Company’s trust preferred debentures at December 31, 2019 and 2018:


(dollars in thousands)	2019		2018
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 4.68% and 5.23% at December 31, 2019 and 2018, respectively – $10,310 maturing April 23, 2034	$	10,274	$	10,272
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 4.79% and 5.37%, at December 31, 2019 and 2018, respectively – $3,093 maturing January 23, 2034		2,263		2,209
Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 3.64% and 4.54% at December 31, 2019 and 2018, respectively – $20,619 maturing December 31, 2036		14,251		14,074
Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 3.36% and 4.21% at December 31, 2019 and 2018, respectively – $20,619 maturing September 6, 2037		13,428		13,249
Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 4.55% and 5.44% at December 31, 2019 and 2018, respectively - $10,310 maturing June 17, 2034		8,072		7,990
Total trust preferred debentures	$	48,288	$	47,794

On March 26, 2004, the Company formed Midland States Preferred Securities Trust (“Midland Trust”), a statutory trust under the Delaware Statutory Trust Act. Midland Trust issued a pool of $10.0 million of floating rate cumulative trust preferred securities with a liquidation amount of $1,000 per security. The Company issued $10.3 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 the Midland Trust; therefore, the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures, net of unamortized debt issuance costs, 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.

In conjunction with the acquisition of Grant Park Bancshares, Inc. (“Grant Park”) on June 5, 2013, the Company assumed $3.1 million of subordinated debentures that were recorded at a fair value of $1.8 million at the time of acquisition. On December 19, 2003, 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 $3.1 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, net of unamortized purchase discount, 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.

In conjunction with the acquisition of Love Savings Holding Company (“LSHC”) on December 31, 2014, the Company assumed $41.2 million of subordinated debentures that were recorded at a fair value of $26.1 million at the time of acquisition. On November 30, 2006, 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 $20.6 million of subordinated debentures to LSHC Trust III in exchange for ownership of all the common securities of the trust. On June 6, 2007, 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 $20.6 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, net of unamortized purchase discount, 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 Centrue on June 9, 2017, as further discussed in Note 2 to the consolidated financial statements, the Company assumed $10.3 million of subordinated debentures that were recorded at a fair value of $7.6 million at the time of acquisition. In April 2004, Centrue Statutory Trust II (“Centrue Trust II”) issued 10,000 shares of trust preferred securities with a liquidation amount of $1,000 per preferred security. Centrue issued $10.3 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, net of unamortized purchase discount, 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.

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 trust preferred securities, 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 debentures.

All of the subordinated debentures mentioned above may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

INCOME TAXES

12 Months Ended

Dec. 31, 2019

INCOME TAXES

INCOME TAXES

Note 16 – Income Taxes

The components of income taxes for the years ended December 31, 2019, 2018 and 2017 were as follows:


(dollars in thousands)	2019		2018		2017
Federal:
Current	$	2,318	$	55	$	(696)
Deferred		8,287		6,748		11,632
State:
Current		1,761		807		(921)
Deferred		4,321		3,774		400
Total income tax expense	$	16,687	$	11,384	$	10,415

The Company’s income tax expense differed from the statutory federal rate of 21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017 as follows:


(dollars in thousands)	2019		2018		2017
Expected income taxes	$	15,218	$	10,665	$	9,244
Less income tax effect of:
Tax exempt interest, net		(1,362)		(1,441)		(1,635)
State tax, net of federal benefit		4,805		4,028		(110)
Increase in cash surrender value of life insurance policies		(764)		(854)		(969)
Equity-based compensation benefit		(484)		(62)		(1,297)
Non-deductible transaction costs		110		71		389
Valuation allowance		62		(409)		(229)
Effect of federal rate change enacted in 2017		—		—		4,540
Other		(898)		(614)		482
Actual income tax expense	$	16,687	$	11,384	$	10,415

Deferred tax assets, net in the accompanying consolidated balance sheets at December 31, 2019 and 2018 include the following amounts of deferred tax assets and liabilities:


(dollars in thousands)	2019		2018
Assets:
Allowance for loan losses	$	7,708	$	5,748
Deferred compensation		2,332		2,158
Loans		5,386		6,579
Write-down of other real estate owned		469		563
Tax credits		1,049		1,041
Nonaccrual interest		782		730
Unrealized loss on securities		—		802
Stock compensation		588		700
Net operating losses		15,510		17,417
Accrued litigation		—		179
Allowance for repurchase reserves		—		135
Allowance for unfunded commitments		—		319
Fair value adjustment on investments		1,217		1,330
Charitable contributions		—		202
Operating lease liabilities		4,227		—
Other, net		1,122		720
Deferred tax assets		40,390		38,623
Valuation allowance		(62)		—
Deferred tax assets, net of valuation allowance		40,328		38,623
Liabilities:
Premises and equipment		1,735		3,522
Unrealized gain on securities		2,846		—
Mortgage servicing rights		11,436		11,460
Fair value adjustment on trust preferred debentures		4,560		4,694
Federal Home Loan Bank stock dividends		—		391
Deferred loan costs, net of fees		3,539		1,495
Intangible assets		8,380		8,741
Accounting method changes		—		74
Prepaid expenses		708		708
Software development costs		1,638		1,667
Leased equipment		12,313		4,351
Operating lease right-of-use assets		3,912		—
Other, net		539		269
Deferred tax liabilities		51,606		37,372
Deferred tax (liabilities) assets, net	$	(11,278)	$	1,251

At December 31, 2019 and 2018, the accumulation of the 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 $58.8 million of federal net operating loss carryforwards expiring 2021 through 2035, $41.5 million of Illinois post-apportioned net operating loss carryforwards expiring 2023 through 2026, and $58.8 million of Missouri pre-apportioned net operating loss carryforwards expiring 2021 through 2035, at December 31, 2019. The utilization of the federal and Missouri net operating losses are subject to the limitations of Internal Revenue Code Section 382.

The Company has a federal alternative minimum tax credit carryforward of $1.6 million that can be carried forward indefinitely and became a refundable credit with the enactment of the Tax Cuts and Jobs Act (“H.R.1”) on December 22, 2017. As of December 31, 2019 and 2018, this credit is not reflected in deferred tax assets and is presented in income taxes receivable.

The Company has state tax credit carryforwards of $1.3 million with a five year carryforward period, expiring between 2020 and 2024. 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 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 the Company recorded the amount of the write down as a provisional amount at December 31, 2017. The final analysis of the impact of H.R.1 was completed once the Company finalized its 2017 tax returns in the third quarter of 2018. The results of this analysis yielded an immaterial true-up to the $4.5 million provisional estimate previously recorded in 2017.

We had no unrecognized tax benefits as of December 31, 2019 and 2018, and did not recognize any increase of unrecognized benefits during 2019 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, 2019 and 2018.

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. At December 31, 2019, the Company concluded, based on all available evidence, a valuation allowance was needed for the Company’s deferred tax asset related to capital loss carryforwards. A valuation allowance in the amount of $62,000 was established at December 31, 2019 for the estimated capital losses that will not be able to be utilized in the future. 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 2016 through 2018 and by state taxing authorities are 2015 through 2018.

RETIREMENT PLANS

12 Months Ended

Dec. 31, 2019

RETIREMENT PLANS

RETIREMENT PLANS

Note 17 – 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 2019, 2018 and 2017. 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 $1.7 million, $1.8 million and $1.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Certain directors and executive officers participate in a nonqualified deferred compensation arrangement. Through May 1, 2019, we matched 25% of the amount deferred by directors who deferred all of their director fees into a Company stock unit account. At December 31, 2019 and 2018, the accrued liability for these arrangements totaled $5.0 million and $4.2 million, respectively, and was reflected in other liabilities in the consolidated balance sheets.

Expenses associated with these arrangements were $845,000, $754,000 and $659,000 for the years ended December 31, 2019, 2018 and 2017, respectively. During the years ended December 31, 2019, 2018 and 2017, there were distributions made of $122,000, $356,000 and $100,000, respectively.

In November 2015, the Company entered into a supplemental retirement agreement with its former Chief Executive Officer (“Former CEO”). Pursuant to the agreement, the Former CEO received a supplemental retirement payment in 2019 equal to $298,000 and is eligible to receive supplemental retirement payments in each of 2020 and 2021 equal to $238,400 and $178,800, respectively, of his final salary on December 31, 2018 (retirement date). The Company expensed $282,000 and $210,000 for the years ended December 31, 2018 and 2017, 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 Bank who have met prescribed eligibility requirements. The multiple-employer plan operates as a single plan under Internal Revenue Code Section 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 119.55% as of July 1, 2019, 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 2019 and 2018 was $128,000 and $122,000, respectively.

SHARE BASED COMPENSATION

12 Months Ended

Dec. 31, 2019

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Note 18 – Share-Based Compensation

The Company awards select employees and directors certain forms of share-based incentives under a long-term incentive plan approved by the Company’s shareholders. Most recently, on May 3, 2019, the shareholders approved the Midland States Bancorp, Inc. 2019 Long-Term Incentive Plan (“2019 Incentive Plan”). The 2019 Incentive Plan made available 1,000,000 shares 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 stock options, stock appreciation rights, stock awards and cash incentive awards. The awards are granted by the compensation committee, which is comprised of members of the board of directors.

Previously, the Company granted equity awards under the Midland States Bancorp, Inc. Second Amended and Restated 2010 Long-Term Incentive Plan (“2010 Incentive Plan”). The 2010 Incentive Plan, originally effective October 18, 2010, was amended and restated effective February 2, 2016, which made available 2,000,000 shares (the initial 1,000,000 of which were eligible to be granted as incentive stock options) to be issued to select employees and directors in the form of stock options and other equity and cash based awards. Following approval of our 2019 Incentive Plan, no additional awards may be granted from our 2010 Incentive Plan; however, any previously granted award will remain subject to the terms of the 2010 Incentive Plan for so long as they remain outstanding.

Total compensation cost that has been charged against income under the plans was $2.0 million, $1.8 million and $1.8 million for 2019, 2018 and 2017, respectively

Restricted Stock

In 2019 and 2018, the Company granted 129,717 and 138,683 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 grant.

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, 2018	197,717	$	28.61
Granted during the year	129,717		27.67
Vested during the year	(57,652)		28.32
Forfeited during the year	(15,725)		27.88
Nonvested at December 31, 2019	254,057	$	28.24

As of December 31, 2019, there was $6.6 million of total unrecognized compensation cost related to the nonvested shares granted under the plans. The cost is expected to be recognized over a weighted average period of 3.1 years.

The weighted average grant date fair value for restricted stock awards was $27.67, $28.47 and $31.03 during the years ended December 31, 2019, 2018 and 2017, respectively.

Stock Options

The Company last granted stock options in 2017. The fair value of each grant was estimated at the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:


	2017
Dividend yield	2.50	%
Expected volatility	16.63
Risk free interest rate	2.12
Expected life	6.25	years

The summary of our stock option activity during the years ended December 31, 2019 and 2018 is as follows:


	2019					2018
				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	1,006,144	$	19.48			1,148,537	$	19.39
Options granted	—		—			—		—
Options exercised	(360,776)		16.46			(108,344)		16.42
Options forfeited	(22,246)		30.68			(34,049)		26.27
Options outstanding, end of year	623,122	$	20.83	4.8	years	1,006,144	$	19.48	4.9	years
Options exercisable	586,081	$	20.40	4.6	years	885,817	$	18.53	4.6	years
Options vested and expected to vest	619,032	$	20.79	4.8	years	991,774	$	19.38	4.9	years

The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2019 was $5.0 million. As of December 31, 2019, there was $88,000 of total unrecognized compensation cost related to nonvested stock options granted under our 2019 and 2010 Incentive Plans. This cost is expected to be recognized over a period of ten months. The weighted average fair value of options granted during the year ended December 31, 2017 was $4.33.

The total intrinsic value and cash received from options exercised under share-based payment arrangements was $3.6 million and $5.9 million, respectively, for the year ended December 31, 2019, $1.6 million and $1.8 million, respectively, for the year ended December 31, 2018, and $2.3 million and $2.9 million, respectively, for the year ended December 31, 2017.

The following table summarizes information about the Company’s nonvested stock option activity for 2019:


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2018	120,327	$	3.11
Granted	—		—
Vested	(66,924)		2.84
Forfeited	(16,362)		3.88
Nonvested at December 31, 2019	37,041	$	3.26

PREFERRED STOCK

12 Months Ended

Dec. 31, 2019

PREFERRED STOCK

PREFERRED STOCK

Note 19 – Preferred Stock

Series G Preferred Stock

In conjunction with the acquisition of Centrue, 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 13 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

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

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2019

EARNINGS PER SHARE

EARNINGS PER SHARE

Note 20 – Earnings Per Share

Earnings per share are calculated utilizing the two-class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. The diluted earnings per share computation for the years ended December 31, 2019, 2018 and 2017 excluded antidilutive stock options of 91,097, 31,259 and 622, respectively, because the exercise prices of these stock options exceeded the average market prices of the Company’s common shares for those respective years. Presented below are the calculations for basic and diluted earnings per common share for the years ended December 31, 2019, 2018 and 2017:




(dollars in thousands, except share and per share data)	2019		2018		2017
Net income	$	55,784	$	39,421	$	16,056
Preferred dividends declared		(191)		(330)		(184)
Preferred stock, premium amortization		145		189		101
Net income available to common shareholders		55,738		39,280		15,973
Common shareholder dividends		(23,389)		(19,838)		(13,922)
Unvested restricted stock award dividends		(210)		(139)		(86)
Undistributed earnings to unvested restricted stock awards		(267)		(123)		(11)
Undistributed earnings to common shareholders	$	31,872	$	19,180	$	1,954
Basic
Distributed earnings to common shareholders	$	23,389	$	19,838	$	13,922
Undistributed earnings to common shareholders		31,872		19,180		1,954
Total common shareholders earnings, basic	$	55,261	$	39,018	$	15,876
Diluted
Distributed earnings to common shareholders	$	23,389	$	19,838	$	13,922
Undistributed earnings to common shareholders		31,872		19,180		1,954
Total common shareholders earnings		55,261		39,018		15,876
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		2		2		—
Total common shareholders earnings, diluted	$	55,263	$	39,020	$	15,876
Weighted average common shares outstanding, basic		24,288,793		23,130,475		17,781,631
Options		204,638		418,550		501,583
Weighted average common shares outstanding, diluted		24,493,431		23,549,025		18,283,214
Basic earnings per common share	$	2.28	$	1.69	$	0.89
Diluted earnings per common share		2.26		1.66		0.87

CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2019

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

Note 21 – Capital Requirements

The Company’s 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 regulatory capital requirements may result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy

guidelines and the regulatory framework for “prompt corrective action”, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. 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. The capital conservation buffer, which consists of Common Equity Tier 1 capital, is not a minimum capital requirement; however, the capital conservation buffer 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. As of January 1, 2019, in order to not be subject to required restrictions on dividends, share repurchases and discretionary bonus payments, banking organizations must maintain minimum ratios of (i) Common Equity Tier 1 capital to risk-weighted assets of at least 4.5% plus the 2.5% capital conservation buffer, (ii) Tier 1 capital to risk-weighted assets of at least 6.0% plus the 2.5% capital conservation buffer, (iii) Total capital to risk-weighted assets of at least 8.0% plus the 2.5% capital conservation buffer, and (iv) Tier 1 capital to adjusted average consolidated assets of at least 4.0%.

At December 31, 2019, the Company and the Bank exceeded the regulatory minimums to which they were subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized.

At December 31, 2019 and 2018, the Company’s and the Bank’s actual and required capital ratios were as follows:


									Required to be
					Fully Phased-In				Well Capitalized Under
					Regulatory				Prompt Corrective
	Actual				Guidelines Minimum				Action Requirements
(dollars in thousands)	Amount		Ratio		Amount		Ratio			Amount	Ratio
December 31, 2019
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	772,572	14.72	%	$	515,548	10.50	%		N/A	N/A
Midland States Bank		648,291	13.22			515,035	10.50		$	490,509	10.00	%
Common Equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		451,696	9.20			343,699	7.00			N/A	N/A
Midland States Bank		619,019	12.62			343,356	7.00			318,831	6.50
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		516,647	10.52			417,348	8.50			N/A	N/A
Midland States Bank		619,019	12.62			416,933	8.50			392,407	8.00
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		516,647	8.74			236,504	4.00			N/A	N/A
Midland States Bank		619,019	10.48			236,214	4.00			295,267	5.00

December 31, 2018
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	584,409	12.79	%	$	479,781	10.50	%		N/A	N/A
Midland States Bank		583,465	12.76			480,236	10.50		$	457,368	10.00	%
Common Equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		400,480	8.76			319,854	7.00			N/A	N/A
Midland States Bank		561,402	12.27			320,157	7.00			297,289	6.50
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		468,212	10.25			388,394	8.50			N/A	N/A
Midland States Bank		561,402	12.27			388,763	8.50			365,894	8.00
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		468,212	8.53			219,602	4.00			N/A	N/A
Midland States Bank		561,402	10.22			219,622	4.00			274,528	5.00

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958572-112826

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958573-112826

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
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-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958570-112826

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958569-112826

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958577-112826

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958575-112826

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958574-112826

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=117337116&loc=d3e65071-112826

+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2019

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Note 22 – Fair Value of Financial Instruments

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

●

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

●

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

●

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

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment securities available for sale. The fair value of investment securities available for sale are determined by quoted market prices, if available (Level 1). 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). 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). 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. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2019 or 2018 for assets measured at fair value on a recurring basis.

Equity securities. The fair value of equity securities is determined using quoted prices or market prices for similar securities (Level 2).

Loans held for sale. The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2).

Interest rate lock commitments. The fair value of interest rate lock commitments is determined based on derivative valuation models using observable market data as of the measurement date (Level 2).

Interest rate swap contracts. The fair value of interest rate swap contracts is valued by a third party based models that use observable market data as of the measurement date (Level 2).

Loan servicing rights. In accordance with GAAP, the Company records impairment charges on loan servicing rights on a non-recurring basis when the carrying value exceeds the estimated fair value. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are estimated based on current market conditions (Level 3).

Mortgage servicing rights held for sale. The fair value of mortgage servicing rights held for sale is determined 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 and other economic factors which are estimated based on current market conditions, less costs to sell (Level 3). In 2018, the fair value of mortgage servicing rights held for sale was determined by quoted market prices less costs to sell (Level 1).

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

(Level 2). 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 (Level 3). 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.

Assets held for sale. Assets held for sale represent the fair value of the banking facilities that are expected to be sold. The fair value of the assets held for sale was based on estimated market prices from independently prepared current appraisals (Level 2).

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 non-recurring basis at December 31, 2019 and 2018, are summarized below:


	2019
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. government sponsored entities and U.S. agency securities	$	60,020	$	—	$	60,020	$	—
Mortgage-backed securities - agency		324,974		—		324,974		—
Mortgage-backed securities - non-agency		17,148		—		17,148		—
State and municipal securities		124,555		—		124,555		—
Corporate securities		122,736		—		121,781		955
Equity securities		5,621		—		5,621		—
Loans held for sale		16,431		—		16,431		—
Interest rate lock commitments		3,350		—		3,350		—
Interest rate swap contracts		306		—		306		—
Total	$	675,141	$	—	$	674,186	$	955
Liabilities
Interest rate swap contracts	$	306	$	—	$	306	$	—

Assets measured at fair value on a non-recurring basis:
Loan servicing rights	$	53,824	$	—	$	—	$	53,824
Mortgage servicing rights held for sale		1,972		—		—		1,972
Impaired loans		14,693		—		12,518		2,175
Assets held for sale		3,974		—		3,974		—


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

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

The following table presents (gains) losses recognized on assets measured on a non-recurring basis for the years ended December 31, 2019, 2018 and 2017:




(dollars in thousands)	2019		2018		2017
Loan servicing rights	$	2,139	$	—	$	2,324
Mortgage servicing rights held for sale		(490)		458		4,059
Impaired loans		10,259		5,800		7,096
Other real estate owned		16		301		253
Assets held for sale		3,577		—		1,516
Total loss on assets measured on a nonrecurring basis	$	15,501	$	6,559	$	15,248

The following table provides a reconciliation of activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2019 and 2018:


	Corporate Securities
(dollars in thousands)	2019		2018
Balance, beginning of period	$	1,923	$	4,779
Total realized in earnings ⁽¹⁾		52		242
Total unrealized in other comprehensive income		32		(36)
Net settlements (principal and interest)		(1,052)		(3,062)
Balance, end of period	$	955	$	1,923

(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 the fair value measurements of Level 3 assets measured on a non-recurring basis at December 31, 2019 and 2018:

Valuation

Unobservable

(dollars in thousands)

Fair Value

technique

input / assumptions

Range (weighted average)

December 31, 2019

Loan servicing rights:

Commercial MSR

52,693

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.20%)

Discount rate

10.00% - 14.00% (11.02%)

SBA servicing rights

1,131

Discounted cash flow

Prepayment speed

8.31% - 9.21% (8.60%)

Discount rate

No range (11.70%)

MSR held for sale

1,972

Discounted cash flow

Prepayment speed

8.64% - 26.28% (12.42%)

Discount rate

9.50% - 12.50% (10.75%)

Other:

Impaired loans

2,175

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.22%)

age of appraisal and current status

December 31, 2018

Loan servicing rights:

Commercial MSR

53,447

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.24%)

Discount rate

10.00% - 27.00% (11.12%)

Other:

Impaired loans

2,012

Fair value of collateral

Discount for type of property,

5.00% - 7.26% (5.26%)

age of appraisal and current status

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 at December 31, 2019 and 2018:


	2019						2018
	Aggregate				Contractual		Aggregate				Contractual
(dollars in thousands)	fair value		Difference		principal		fair value		Difference		principal
Commercial loans held for sale	$	8,236	$	206	$	8,030	$	22,280	$	595	$	21,685
Residential loans held for sale		8,195		446		7,749		8,121		484		7,637
Total loans held for sale	$	16,431	$	652	$	15,779	$	30,401	$	1,079	$	29,322

The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2019, 2018 and 2017:


(dollars in thousands)	2019		2018		2017
Commercial loans held for sale	$	(389)	$	252	$	(650)
Residential loans held for sale		7		6		(74)
Total loans held for sale	$	(382)	$	258	$	(724)

The carrying values and estimated fair value of financial instruments not carried at fair value at December 31, 2019 and 2018 were as follows:


	2019
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	392,694	$	392,694	$	392,694	$	—	$	—
Federal funds sold		1,811		1,811		1,811		—		—
Nonmarketable equity securities		44,505		44,505		—		44,505		—
Loans, net		4,373,382		4,385,768		—		—		4,385,768
Accrued interest receivable		16,346		16,346		—		16,346		—

Liabilities
Deposits	$	4,544,254	$	4,548,327	$	—	$	4,548,327	$	—
Short-term borrowings		82,029		82,029		—		82,029		—
FHLB and other borrowings		493,311		506,832		—		506,832		—
Subordinated debt		176,653		182,189		—		182,189		—
Trust preferred debentures		48,288		53,811		—		53,811		—
Accrued interest payable		6,400		6,400		—		6,400		—


	2018
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	210,780	$	210,780	$	210,780	$	—	$	—
Federal funds sold		2,920		2,920		2,920		—		—
Nonmarketable equity securities		42,472		42,472		—		42,472		—
Loans, net		4,116,648		4,091,438		—		—		4,091,438
Accrued interest receivable		16,560		16,560		—		16,560		—

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

In accordance with our adoption of ASU 2016-01 in 2018, the methods utilized to measure the fair value of financial instruments at December 31, 2019 and 2018 represent an approximation of exit price; however, an actual exit price may differ.

- 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, 2019

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Note 23 – Commitments, Contingencies and Credit Risk

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

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in

the balance sheet. The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

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


(dollars in thousands)	2019		2018
Commitments to extend credit	$	725,506	$	663,555
Financial guarantees – standby letters of credit		106,678		142,859

The Company establishes a mortgage repurchase liability to reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on the volume of loans sold in 2019 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. As a result of make-whole requests and loan repurchases, the Company incurred losses totaling $11,000 and $17,000 for the years ended December 31, 2018 and 2017, respectively. There were no losses as a result of make-whole requests and loan repurchases for the year ended December 31, 2019. The liability for unresolved repurchase demands totaled $289,000 and $492,000 at December 31, 2019 and 2018, respectively.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 24 – Segment Information

Our business segments are defined as Banking, Wealth Management, 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 wealth management segment consists of trust and fiduciary services, brokerage and retirement planning 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 captive insurance business unit, and the elimination of intercompany transactions.

Selected business segment financial information as of and for the years ended December 31, 2019, 2018 and 2017 were as follows:


					Commercial FHA
				Wealth	Origination and
(dollars in thousands)	Banking			Management	Servicing		Other		Total
December 31, 2019
Net interest income (expense)	$	202,147	$	—	$	(613)	$	(11,719)	$	189,815
Provision for loan losses		16,985		—		—		—		16,985
Noninterest income		39,184		21,832		14,498		(232)		75,282
Noninterest expense		150,366		13,914		10,934		427		175,641
Income (loss) before income taxes (benefit)		73,980		7,918		2,951		(12,378)		72,471
Income taxes (benefit)		18,038		617		1,389		(3,357)		16,687
Net income (loss)	$	55,942	$	7,301	$	1,562	$	(9,021)	$	55,784
Total assets	$	6,000,496	$	20,969	$	91,496	$	(25,944)	$	6,087,017

December 31, 2018
Net interest income (expense)	$	190,883	$	298	$	(422)	$	(10,672)	$	180,087
Provision for loan losses		9,430		—		—		—		9,430
Noninterest income		40,313		20,484		11,457		(463)		71,791
Noninterest expense		165,744		11,680		15,058		(839)		191,643
Income (loss) before income taxes (benefit)		56,022		9,102		(4,023)		(10,296)		50,805
Income taxes (benefit)		14,154		514		(979)		(2,305)		11,384
Net income (loss)	$	41,868	$	8,588	$	(3,044)	$	(7,991)	$	39,421
Total assets	$	5,571,752	$	18,218	$	91,108	$	(43,405)	$	5,637,673

December 31, 2017
Net interest income (expense)	$	135,974	$	524	$	312	$	(7,148)	$	129,662
Provision for loan losses		9,556		—		—		—		9,556
Noninterest income		27,955		13,339		18,570		(502)		59,362
Noninterest expense		129,626		8,823		13,729		819		152,997
Income (loss) before income taxes (benefit)		24,747		5,040		5,153		(8,469)		26,471
Income taxes (benefit)		17,102		423		(1,033)		(6,077)		10,415
Net income (loss)	$	7,645	$	4,617	$	6,186	$	(2,392)	$	16,056
Total assets	$	4,336,301	$	15,979	$	99,685	$	(39,264)	$	4,412,701

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2019

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Note 25 – Related Party Transactions

The Company utilizes the services of a company to act as a general manager for the construction of new 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, 2019, 2018 and 2017, the Company paid $633,000, $418,000 and $20,000, respectively, to this company for work on various projects.

A member of our board of directors has an ownership interest in a building the Company utilizes for office space located in Effingham, Illinois. During the years ended December 31, 2019 and 2018, the Company paid rent on this space of $64,000 and $42,000, respectively.

A former member of our board of directors that resigned in 2018, had an ownership interest in the Company’s office building located in Clayton, Missouri and three of the Bank’s full-service branch facilities as of December 31, 2019. During the years ended December 31, 2018 and 2017, the Company paid rent on these properties of $712,000 and $719,000, respectively.

A member of our board of directors is an executive and board member of a company we utilized for relationship and marketplace studies. During the year ended December 31, 2017, the Company paid $116,000 for these services.

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 31, 2019

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

Note 26 – Revenue From Contracts with Customers

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. The implementation of the new standard did not have a

material impact on the measurement or recognition of revenue. The Company 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. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP.

The Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income in the consolidated statements of income. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended December 31, 2019, 2018 and 2017.


(dollars in thousands)	2019		2018		2017
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	16,114	$	16,099	$	9,751
Investment advisory fees		2,171		2,041		1,364
Investment brokerage fees		1,165		1,065		1,388
Other		2,382		1,308		837
Service charges on deposit accounts:
Nonsufficient fund fees		7,721		7,672		4,193
Other		3,306		2,768		1,782
Interchange revenues		11,992		10,674		5,353
Other income:
Merchant services revenue		1,506		1,650		1,103
Other		3,475		2,935		1,869
Noninterest income - out-of-scope of Topic 606		25,450		25,579		31,722
Total noninterest income	$	75,282	$	71,791	$	59,362

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

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

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

and the related revenue recognized, over the period in which the service is provided. Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.

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

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

PARENT COMPANY ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2019

PARENT COMPANY ONLY FINANCIAL INFORMATION

PARENT COMPANY ONLY FINANCIAL INFORMATION

Note 27 – Parent Company Only Financial Information

The following tables present condensed financial information for Midland States Bancorp, Inc. at December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017:


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2019		2018
Assets:
Cash	$	52,673	$	20,312
Investment in common stock of subsidiaries		832,681		764,483
Accrued income taxes receivable		2,563		—
Other assets		2,371		2,330
Total assets	$	890,288	$	787,125
Liabilities:
Subordinated debt	$	176,653	$	94,134
Trust preferred debentures		48,288		47,794
Other borrowings		181		33,021
Accrued income taxes payable		—		778
Deferred tax liabilities, net		849		972
Other liabilities		2,406		1,901
Total liabilities		228,377		178,600
Shareholders’ equity		661,911		608,525
Total liabilities and shareholders’ equity	$	890,288	$	787,125


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2019		2018		2017
Dividends from subsidiaries	$	43,900	$	17,000	$	19,500
Other income		—		6		4
Interest expense		(11,798)		(10,714)		(7,162)
Other expense		(2,753)		(1,180)		(1,295)
Income before income tax benefit and equity in undistributed income (loss) of subsidiaries		29,349		5,112		11,047
Income tax benefit		3,371		2,312		6,080
Income before equity in undistributed income (loss) of subsidiaries		32,720		7,424		17,127
Equity in undistributed income (loss) of subsidiaries		23,064		31,997		(1,071)
Net income	$	55,784	$	39,421	$	16,056


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2019		2018		2017
Cash flows from operating activities:
Net income	$	55,784	$	39,421	$	16,056
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (income) loss of subsidiaries		(23,064)		(31,997)		1,071
Share-based compensation expense		2,364		1,533		1,384
Change in other assets		(2,604)		3,273		(3,226)
Change in other liabilities		1,528		2,863		1,649
Net cash provided by operating activities		34,008		15,093		16,934
Cash flows from investing activities:
Net cash paid in acquisition		(1,021)		(32,890)		(60,457)
Capital injection to subsidiaries		—		—		(350)
Net cash used in investing activities		(1,021)		(32,890)		(60,807)
Cash flows from financing activities:
Proceeds from issuance of subordinated debt, net of issuance costs		98,265		—		39,354
Payments made on subordinated debt		(17,765)		—		—
Proceeds from other borrowings, net of issuance costs		—		—		39,964
Payments made on other borrowings		(56,475)		(4,286)		(2,857)
Cash dividends paid on preferred stock		(191)		(330)		(184)
Redemption of Series H preferred stock		(2,636)		—		—
Cash dividends paid on common stock		(23,599)		(19,977)		(14,008)
Common stock repurchased		(4,019)		—		—
Proceeds from issuance of common stock under employee benefit plans		5,794		2,278		3,225
Net cash (used in) provided by financing activities		(626)		(22,315)		65,494
Net increase (decrease) in cash		32,361		(40,112)		21,621
Cash:
Beginning of period		20,312		60,424		38,803
End of period	$	52,673	$	20,312	$	60,424

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2019

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

Note 28 – Quarterly Condensed Financial Information (Unaudited)

The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2019 and 2018:


	2019 Quarter Ended
(dollars in thousands, except per share data)	March 31		June 30		September 30		December 31
Interest income	$	59,432	$	60,636	$	65,006	$	64,444
Interest expense		13,831		14,559		15,556		15,757
Net interest income		45,601		46,077		49,450		48,687
Provision for loan losses		3,243		4,076		4,361		5,305
Net interest income after provision for loan losses		42,358		42,001		45,089		43,382
Noninterest income		17,075		19,587		19,606		19,014
Noninterest expense		41,097		40,194		48,025		46,325
Income before income taxes		18,336		21,394		16,670		16,071
Income taxes		4,354		5,039		4,015		3,279
Net income		13,982		16,355		12,655		12,792
Preferred stock dividends and premium amortization		34		34		(22)		—
Net income available to common shareholders	$	13,948	$	16,321	$	12,677	$	12,792
Per common share data:
Basic earnings per common share	$	0.58	$	0.67	$	0.51	$	0.52
Diluted earnings per common share		0.57		0.67		0.51		0.51


	2018 Quarter Ended
(dollars in thousands, except per share data)	March 31		June 30		September 30		December 31
Interest income	$	46,505	$	58,283	$	56,987	$	61,592
Interest expense		8,320		9,997		11,906		13,057
Net interest income		38,185		48,286		45,081		48,535
Provision for loan losses		2,006		1,854		2,103		3,467
Net interest income after provision for loan losses		36,179		46,432		42,978		45,068
Noninterest income		16,502		15,847		18,272		21,170
Noninterest expense		49,499		46,452		50,317		45,375
Income before income taxes		3,182		15,827		10,933		20,863
Income taxes		1,376		3,045		2,436		4,527
Net income		1,806		12,782		8,497		16,336
Preferred stock dividends and premium amortization		36		36		35		34
Net income available to common shareholders	$	1,770	$	12,746	$	8,462	$	16,302
Per common share data:
Basic earnings per common share	$	0.08	$	0.53	$	0.35	$	0.68
Diluted earnings per common share		0.08		0.52		0.35		0.67

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2019
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 2018 and 2017 amounts have been made to conform to the 2019 presentation but do not have an effect on net income or shareholders’ equity.
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.
Subsequent Events	Subsequent Events Management has evaluated subsequent events for recognition and disclosure through February 28, 2020, which is the date the financial statements were available to be issued.
Business Combinations	Business Combinations The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method of accounting, 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, and agency and non-agency mortgage-backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its debt investment securities as available for sale or held to maturity at the time of purchase. 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 (loss) and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. Investments in stock of a publicly traded company or in mutual funds are classified as equity securities. Equity securities are recorded at fair value with unrealized gains and losses recognized in net income. 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; 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 or to the earliest call date 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 noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income (loss).
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”). The Bank is a member of the FHLB system as well as its regional FRB. Members of the FHLB 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 and FRB stock are both 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-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 outstanding principal, net of principal and uncollected interest write-offs, premiums or discounts, and net unamortized deferred fees and costs. 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, unless the loan is well secured and in the process of collection, 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 effective yield 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 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 leased 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 PCI 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 collateral type. 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, loans 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 principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment based upon either the present value of expected future cash flows discounted at the effective interest rate, the 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 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 is charged-off to the allowance if deemed not collectible or 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. 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 and lease losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired loans, (ii) allocations, by classes, on loan and lease portfolios based on historical 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 loans in the Non-PCI 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 classes, on loan and lease portfolios based on historical loss experience and on other factors for the imprecision in the overall allowance methodology. Loans and leases are not evaluated individually for impairment and any individually evaluated loan or lease 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 charge-offs and recoveries and changes in specific reserves. 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 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 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 FHA 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 23 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 exist that indicate that a goodwill impairment test should be performed. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are typically 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	Loan Servicing Rights When loans are sold with servicing retained, a 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. As the Company has not elected to subsequently measure servicing assets under the fair value measurement method, the Company follows the amortization method. Loan servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Loan servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. Loan servicing rights do not trade in an active market with readily observable prices. The fair value of loan 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 distinct portfolios of government-insured residential and commercial mortgages, conventional residential mortgages and Small Business Administration (“SBA”) loans. The Company periodically evaluates its loan 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 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 loan 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 loan servicing rights asset and valuation allowance, precluding subsequent recoveries. We recognize revenue from servicing commercial FHA mortgages, residential mortgages and SBA loans 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, residential mortgage banking revenue and other noninterest income, respectively, 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 (gain) 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, adjusted for other charges or other amounts due that are probable at settlement, 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 sale 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 revenue and residential mortgage banking revenue.
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 $1.2 million at both December 31, 2019 and 2018.
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	Share-Based 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.
Accounting Guidance Adopted in 2019 and Issued But Not Yet Adopted	Accounting Guidance Adopted in 2019 FASB ASU 2016-02, “Leases (Topic 842)” – In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize leases on-balance sheet and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Targeted Improvements.” The new standard established a ROU model that requires a lessee to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. Under the new guidance, leases are classified as either finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of income. The Company adopted the new standard on January 1, 2019, and used the effective date as its date of initial application. A modified retrospective adoption approach is required, applying the new standard to all existing leases in effect at the adoption date and new leases going forward. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to January 1, 2019. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company elected the “package of practical expedients” permitted by ASU 2018-11, which allows us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for ongoing accounting. The Company elected the short-term lease recognition exemption for its office equipment leases. This means, for those leases that qualify, we did not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. At the date of adoption, the Company recorded approximately $12.1 million on its consolidated balance sheet to reflect the ROU assets and associated lease liabilities related to non-cancelable operating lease agreements for office space. The adoption of this guidance did not have a material effect on its consolidated statement of income. Accounting Guidance Issued But Not Yet Adopted FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”).” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better understand their credit loss estimates. This update became effective for the Company on January 1, 2020. The Company is finalizing the economic forecasts and certain other key assumptions used in our CECL model and methodologies, as well as finalizing and validating our internal controls; however, we expect our allowance for credit losses for loans and leases (“ACL”) to increase by an amount in the range of $15.0 million to $25.0 million. A significant portion of this increase is related to the acquired loan portfolio. The ASU eliminates the current accounting model for PCI loans, but requires an allowance be to be recognized for purchased-credit-deteriorated assets, which are assets that have experienced more-than-insignificant deterioration in credit quality since origination. This estimate is subject to change based on continued refinement and validation of the model and methodologies as well as changes in forecasted macroeconomic conditions. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, portfolio duration, and other factors. FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – In August 2018, the FASB issued ASU No. 2018-13 to improve the disclosure requirements on fair value measurements. The amendment removes certain disclosures required by Topic 820 related to transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The update also adds certain disclosure requirements related to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. This update became effective for the Company on January 1, 2020. The Company completed its evaluation and determined the adoption of this guidance will not have a material impact on its consolidated financial statements. FASB ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” – In August 2018, the FASB issued ASU No. 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This update became effective for the Company on January 1, 2020. The Company currently evaluates costs incurred for software developed or obtained for internal use or a hosting arrangement that is a service contract to determine which implementation costs should be capitalized as an asset and which costs should be expensed; therefore, the adoption of this new guidance will not have an impact on its consolidated financial statements.

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2019

ACQUISITIONS

Schedule of allocation of consideration


(dollars in thousands)	HomeStar		Alpine		Centrue
Assets acquired:
Cash and cash equivalents	$	70,900	$	69,459	$	42,461
Investment securities available for sale		54,963		293,428		149,013
Equity securities		2,153		8,372		—
Loans		211,070		786,186		679,582
Loans held for sale		3,562		3,416		531
Premises and equipment		4,049		18,126		17,147
Operating lease right-of-use asset		5,177		—		—
Other real estate owned		1,092		53		4,983
Nonmarketable equity securities		454		2,038		8,168
Accrued interest receivable		1,185		4,414		2,376
Loan servicing rights		1,089		—		1,933
Mortgage servicing rights held for sale		1,701		3,068		—
Intangible assets		4,600		27,400		11,070
Cash surrender value of life insurance policies		—		22,578		36,349
Accrued income taxes receivable		7		—		—
Deferred tax assets, net		3,702		—		34,339
Other assets		1,511		4,770		2,256
Total assets acquired		367,215		1,243,308		990,208
Liabilities assumed:
Deposits		321,740		1,111,130		739,867
Short-term borrowings		—		—		14,434
FHLB advances and other borrowings		31,369		18,127		95,332
Trust preferred debentures		—		—		7,565
Accrued interest payable		115		539		275
Operating lease liabilities		6,241		—		—
Deferred tax liabilities, net		—		1,749		—
Other liabilities		3,475		4,500		3,600
Total liabilities assumed		362,940		1,136,045		861,073
Net assets acquired		4,275		107,263		129,135
Goodwill		7,085		65,964		47,444
Total consideration paid	$	11,360	$	173,227	$	176,579

Intangible assets:
Core deposit intangible	$	4,300	$	21,100	$	11,070
Customer relationship intangible		300		6,300		—
Total intangible assets	$	4,600	$	27,400	$	11,070
Estimated useful lives:
Core deposit intangible		12 years		13 years		8 years
Customer relationship intangible		6 years		13 years		N/A

Schedule of acquired loan data


					Best Estimate at
					Acquisition Date of
	Fair Value		Gross Contractual		Contractual Cash
	of Acquired Loans		Amounts Receivable		Flows Not Expected
(dollars in thousands)	at Acquisition Date		at Acquisition Date		to be Collected
HomeStar:
Acquired receivables subject to ASC 310-30	$	17,553	$	19,587	$	1,607
Acquired receivables not subject to ASC 310-30		193,517		203,693		5,281
Alpine:
Acquired receivables subject to ASC 310-30	$	34,993	$	50,342	$	9,254
Acquired receivables not subject to ASC 310-30		751,193		774,836		4,244
Centrue:
Acquired receivables subject to ASC 310-30	$	11,381	$	20,253	$	7,227
Acquired receivables not subject to ASC 310-30		668,201		821,338		4,835

Schedule of unaudited pro-forma information


(dollars in thousands, except per share data)	2019		2018
Revenue ⁽¹⁾	$	275,179	$	282,648
Net income		58,422		48,318
Diluted earnings per common share		2.34		1.94

(1)	Net interest income plus noninterest income

INVESTMENT SECURITIES (Tables)

12 Months Ended

Dec. 31, 2019

INVESTMENT SECURITIES

Schedule of investment securities classified as available for sale


	2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
(dollars in thousands)	cost		gains		losses		value
Available-for-sale securities:
U.S. government sponsored entities and U.S. agency securities	$	59,600	$	442	$	22	$	60,020
Mortgage-backed securities - agency		321,840		3,368		234		324,974
Mortgage-backed securities - non-agency		17,198		3		53		17,148
State and municipal securities		119,371		5,195		11		124,555
Corporate securities		121,159		2,131		554		122,736
Total available-for-sale securities	$	639,168	$	11,139	$	874	$	649,433


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

Schedule of unrealized losses and fair values for investment securities


	2019
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	value		loss		value		loss		value		loss
Available-for-sale securities:
U.S. government sponsored entities and U.S. agency securities	$	7,200	$	22	$	—	$	—	$	7,200	$	22
Mortgage-backed securities - agency		75,336		170		7,170		64		82,506		234
Mortgage-backed securities - non-agency		11,059		53		—		—		11,059		53
State and municipal securities		1,813		11		—		—		1,813		11
Corporate securities		20,269		481		3,915		73		24,184		554
Total available-for-sale securities	$	115,677	$	737	$	11,085	$	137	$	126,762	$	874


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

Contractual maturity of amortized cost and fair value

c
	Amortized		Fair
(dollars in thousands)	cost		value
Available-for-sale securities:
Within one year	$	37,463	$	37,669
After one year through five years		73,251		75,147
After five years through ten years		169,906		173,900
After ten years		19,510		20,595
Mortgage-backed securities		339,038		342,122
Total available-for-sale securities	$	639,168	$	649,433

Schedule of Proceeds from the sale of available-for-sale investment securities and equity securities, the resulting gross realized gains (losses) and net unrealized gains (losses)


(dollars in thousands)	2019		2018		2017
Available-for-sale securities:
Proceeds from sales	$	33,464	$	20,178	$	22,595
Gross realized gains on sales		786		542		242
Gross realized losses on sales		(190)		(25)		(20)


(dollars in thousands)	2019		2018		2017 ⁽¹⁾
Equity securities:
Proceeds from sales	$	105	$	7,733		N/A
Gross realized gains on sales		78		—		N/A
Gross realized losses on sales		—		(53)		N/A
Net unrealized gains (losses) ⁽²⁾		93		(10)		N/A

(1)	As a result of accounting guidance adopted by the Company in the first quarter of 2018, equity securities were no longer presented within available for sale securities. Prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP.

(2)	Net unrealized gains (losses) on equity securities are recorded in other income in the consolidated statements of income.

LOANS (Tables)

12 Months Ended

Dec. 31, 2019

LOANS

Summary of loans


	2019						2018
	Non-PCI		PCI				Non-PCI		PCI
(dollars in thousands)	Loans		Loans ⁽¹⁾		Total		Loans		Loans ⁽¹⁾		Total
Loans:
Commercial	$	1,052,107	$	3,078	$	1,055,185	$	806,027	$	4,857	$	810,884
Commercial real estate		1,506,397		20,107		1,526,504		1,619,903		19,252		1,639,155
Construction and land development		203,056		5,677		208,733		223,898		8,331		232,229
Total commercial loans		2,761,560		28,862		2,790,422		2,649,828		32,440		2,682,268
Residential real estate		555,654		12,637		568,291		569,289		8,759		578,048
Consumer		708,904		1,212		710,116		611,408		1,776		613,184
Lease financing		332,581		—		332,581		264,051		—		264,051
Total loans	$	4,358,699	$	42,711	$	4,401,410	$	4,094,576	$	42,975	$	4,137,551

(1)	The customers’ unpaid principal balance for PCI loans totaled $51.9 million and $56.9 million as of December 31, 2019 and 2018, respectively.

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


	2019								2018
			Commercial		Construction						Commercial		Construction
			Real		and Land						Real		and Land
(dollars in thousands)	Commercial		Estate		Development		Total		Commercial		Estate		Development		Total
Acceptable credit quality	$	1,005,442	$	1,398,400	$	194,992	$	2,598,834	$	748,296	$	1,536,127	$	218,798	$	2,503,221
Special mention		17,435		18,450		2,420		38,305		35,103		15,306		3,448		53,857
Substandard		23,387		67,805		1,250		92,442		14,139		46,976		—		61,115
Substandard – nonaccrual		5,843		21,742		1,304		28,889		8,489		21,494		1,171		31,154
Doubtful		—		—		—		—		—		—		—		—
Not graded		—		—		3,090		3,090		—		—		481		481
Total (excluding PCI)	$	1,052,107	$	1,506,397	$	203,056	$	2,761,560	$	806,027	$	1,619,903	$	223,898	$	2,649,828


	2019								2018
	Residential				Lease				Residential				Lease
(dollars in thousands)	Real Estate		Consumer		Financing		Total		Real Estate		Consumer		Financing		Total
Performing	$	546,630	$	708,528	$	330,988	$	1,586,146	$	562,019	$	610,839	$	263,094	$	1,435,952
Impaired		9,024		376		1,593		10,993		7,270		569		957		8,796
Total (excluding PCI)	$	555,654	$	708,904	$	332,581	$	1,597,139	$	569,289	$	611,408	$	264,051	$	1,444,748

Summary of impaired loans (excluding PCI loans)

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


	2019						2018
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
(dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	4,562	$	4,672	$	3,632	$	7,945	$	8,102	$	4,448
Commercial real estate		14,603		17,765		6,068		7,496		13,844		523
Construction and land development		104		150		14		171		171		54
Residential real estate		5,319		6,138		734		4,055		4,662		554
Consumer		368		488		39		428		444		45
Lease financing		1,258		1,259		278		766		766		361
Total impaired loans with a valuation allowance		26,214		30,472		10,765		20,861		27,989		5,985
Impaired loans with no related valuation allowance:
Commercial		1,716		5,210		—		983		4,392		—
Commercial real estate		8,859		15,716		—		16,372		16,921		—
Construction and land development		1,245		1,252		—		1,136		1,136		—
Residential real estate		3,705		4,413		—		3,215		3,516		—
Consumer		8		9		—		141		145		—
Lease financing		335		335		—		191		191		—
Total impaired loans with no related valuation allowance		15,868		26,935		—		22,038		26,301		—
Total impaired loans:
Commercial		6,278		9,882		3,632		8,928		12,494		4,448
Commercial real estate		23,462		33,481		6,068		23,868		30,765		523
Construction and land development		1,349		1,402		14		1,307		1,307		54
Residential real estate		9,024		10,551		734		7,270		8,178		554
Consumer		376		497		39		569		589		45
Lease financing		1,593		1,594		278		957		957		361
Total impaired loans (excluding PCI)	$	42,082	$	57,407	$	10,765	$	42,899	$	54,290	$	5,985

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the years ended December 31, 2019, 2018 and 2017 are included in the table below:


	2019				2018				2017
			Interest Income				Interest Income				Interest Income
	Average		Recognized		Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on		Recorded		While on
(dollars in thousands)	Investment		Impaired Status		Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	4,737	$	28	$	8,359	$	30	$	2,969	$	15
Commercial real estate		16,786		77		8,082		45		5,408		70
Construction and land development		113		—		175		3		83		4
Residential real estate		5,528		33		3,855		41		3,854		38
Consumer		505		—		360		—		299		—
Lease financing		1,259		—		766		—		1,064		—
Total impaired loans with a valuation allowance		28,928		138		21,597		119		13,677		127
Impaired loans with no related valuation allowance:
Commercial		2,029		—		1,233		—		2,369		—
Commercial real estate		9,631		12		16,253		22		16,822		—
Construction and land development		1,254		3		1,152		—		815		—
Residential real estate		3,993		17		3,348		22		2,055		3
Consumer		10		1		95		—		13		—
Lease financing		335		—		191		—		282		—
Total impaired loans with no related valuation allowance		17,252		33		22,272		44		22,356		3
Total impaired loans:
Commercial		6,766		28		9,592		30		5,338		15
Commercial real estate		26,417		89		24,335		67		22,230		70
Construction and land development		1,367		3		1,327		3		898		4
Residential real estate		9,521		50		7,203		63		5,909		41
Consumer		515		1		455		—		312		—
Lease financing		1,594		—		957		—		1,346		—
Total impaired loans (excluding PCI)	$	46,180	$	171	$	43,869	$	163	$	36,033	$	130

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

The aging status of the recorded investment in loans by portfolio (excluding PCI loans) at December 31, 2019 and 2018 are included in the table below:


	Accruing Loans
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
(dollars in thousands)	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
December 31, 2019
Commercial	$	5,910	$	3,086	$	—	$	5,843	$	14,839	$	1,037,268	$	1,052,107
Commercial real estate		2,895		399		—		21,742		25,036		1,481,361		1,506,397
Construction and land development		1,539		72		—		1,304		2,915		200,141		203,056
Residential real estate		588		1,561		145		7,796		10,090		545,564		555,654
Consumer		6,701		4,154		—		341		11,196		697,708		708,904
Lease financing		1,783		1,188		218		1,375		4,564		328,017		332,581
Total loans (excluding PCI)	$	19,416	$	10,460	$	363	$	38,401	$	68,640	$	4,290,059	$	4,358,699

December 31, 2018
Commercial	$	4,013	$	2,581	$	4	$	8,489	$	15,087	$	790,940	$	806,027
Commercial real estate		1,667		945		149		21,494		24,255		1,595,648		1,619,903
Construction and land development		989		—		85		1,171		2,245		221,653		223,898
Residential real estate		1,292		728		566		5,894		8,480		560,809		569,289
Consumer		5,211		2,533		51		388		8,183		603,225		611,408
Lease financing		4,322		932		206		751		6,211		257,840		264,051
Total loans (excluding PCI)	$	17,494	$	7,719	$	1,061	$	38,187	$	64,461	$	4,030,115	$	4,094,576

Summary of TDRs loans


	2019						2018
(dollars in thousands)	Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total		Accruing ⁽¹⁾		Non-accrual ⁽²⁾		Total
Commercial	$	435	$	369	$	804	$	435	$	406	$	841
Commercial real estate		1,720		9,834		11,554		2,225		9,103		11,328
Construction and land development		45		167		212		51		—		51
Residential real estate		1,083		1,993		3,076		810		853		1,663
Consumer		35		—		35		130		—		130
Lease financing		—		55		55		—		—		—
Total loans (excluding PCI)	$	3,318	$	12,418	$	15,736	$	3,651	$	10,362	$	14,013

(1)	These loans are still accruing interest.

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


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the year ended December 31, 2019:
Troubled debt restructurings:
Number of loans		1		3		2		25		5		1		37
Pre-modification outstanding balance	$	249	$	1,924	$	221	$	1,422	$	26	$	55	$	3,897
Post-modification outstanding balance		249		1,322		167		1,322		25		55		3,140

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

For the year ended December 31, 2018:
Troubled debt restructurings:
Number of loans		2		2		—		7		25		—		36
Pre-modification outstanding balance	$	423	$	1,571	$	—	$	708	$	130	$	—	$	2,832
Post-modification outstanding balance		408		1,565		—		696		130		—		2,799

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

For the year ended December 31, 2017:
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	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Summary of changes in accretable yield for PCI loans


(dollars in thousands)	2019		2018		2017
Balance, beginning of period	$	12,240	$	5,732	$	9,035
New loans purchased – HomeStar acquisition		427		—		—
New loans purchased – Alpine acquisition		—		6,095		—
New loans purchased – Centrue acquisition		—		—		1,929
Accretion		(6,423)		(6,092)		(5,546)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		3,785		2,682		120
Reclassification from non-accretable		2,038		3,823		194
Balance, end of period	$	12,067	$	12,240	$	5,732

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

The following table presents, by loan portfolio, a summary of changes in the allowance for loan losses for the years ended December 31, 2019, 2018 and 2017:


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for loan losses		3,852		7,939		(53)		1,392		1,767		2,088		16,985
Charge-offs		(3,412)		(3,339)		(44)		(1,076)		(1,946)		(2,251)		(12,068)
Recoveries		67		949		15		142		667		368		2,208
Balance, end of period	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028

Changes in allowance for loan losses in 2018:
Balance, beginning of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431
Provision for loan losses		4,941		(207)		(227)		(517)		2,156		3,284		9,430
Charge-offs		(1,236)		(492)		—		(361)		(1,876)		(3,024)		(6,989)
Recoveries		563		378		81		169		530		310		2,031
Balance, end of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903

Changes in allowance for loan losses in 2017:
Balance, beginning of period	$	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
Balance, end of period	$	5,256	$	5,044	$	518	$	2,750	$	1,344	$	1,519	$	16,431


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
(dollars in thousands)	Commercial		Estate		Development		Estate		Consumer		Financing		Total
December 31, 2019:

Allowance for loan losses:
Loans individually evaluated for impairment	$	3,563	$	5,968	$	—	$	290	$	—	$	156	$	9,977
Loans collectively evaluated for impairment		69		100		14		444		39		122		788
Non-impaired loans collectively evaluated for impairment		6,380		3,643		272		1,269		2,500		2,016		16,080
Loans acquired with deteriorated credit quality ⁽¹⁾		19		561		4		496		103		—		1,183
Total allowance for loan losses	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	5,767	$	22,698	$	1,245	$	5,329	$	—	$	697	$	35,736
Impaired loans collectively evaluated for impairment		511		764		104		3,695		376		896		6,346
Non-impaired loans collectively evaluated for impairment		1,045,829		1,482,935		201,707		546,630		708,528		330,988		4,316,617
Loans acquired with deteriorated credit quality ⁽¹⁾		3,078		20,107		5,677		12,637		1,212		—		42,711
Total recorded investment (loan balance)	$	1,055,185	$	1,526,504	$	208,733	$	568,291	$	710,116	$	332,581	$	4,401,410

December 31, 2018:

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

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

PREMISES AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2019

PREMISES AND EQUIPMENT, NET

Summary of premises and equipment


(dollars in thousands)	2019		2018
Land	$	19,123	$	20,231
Buildings and improvements		77,296		76,141
Furniture and equipment		31,846		29,858
Total		128,265		126,230
Accumulated depreciation		(37,210)		(31,390)
Premises and equipment, net	$	91,055	$	94,840

LEASES (Tables)

12 Months Ended

Dec. 31, 2019

LEASES

Summary of information related to operating leases


(dollars in thousands)	2019
Operating lease cost	$	2,752
Operating cash flows related to leases		3,241
Right-of-use assets obtained in exchange for lease obligations		18,482
Weighted average remaining lease term		8.01 years
Weighted average discount rate		2.98	%

Summary of projected minimum rental payments


(dollars in thousands)	Amount
Year ending December 31:
2020	$	2,814
2021		2,854
2022		2,677
2023		2,120
2024		1,340
Thereafter		5,588
Total future minimum lease payments		17,393
Less imputed interest		(2,024)
Total operating lease liabilities	$	15,369

LOAN SERVICING RIGHTS (Tables)

12 Months Ended

Dec. 31, 2019

LOAN SERVICING RIGHTS

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


(dollars in thousands)	2019		2018		2017
Loan servicing rights:
Balance, beginning of period	$	56,252	$	55,714	$	52,006
Originated servicing		4,124		3,174		6,287
Amortization		(2,739)		(2,636)		(2,579)
Balance, end of period		57,637		56,252		55,714
Valuation allowances:
Balance, beginning of period		2,805		3,254		1,712
Additions		2,698		931		1,542
Reductions		(559)		(1,380)		—
Balance, end of period		4,944		2,805		3,254
Loan servicing rights, net	$	52,693	$	53,447	$	52,460
Fair value:
At beginning of period	$	53,447	$	52,460	$	50,294
At end of period	$	52,693	$	53,447	$	52,460

Schedule of summary of key assumptions


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
December 31, 2019:
Commercial FHA mortgage loans	0.12	%	3.68	%	29.9	8.20	%	$	1,000	10 - 14	%

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

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2019

GOODWILL AND INTANGIBLE ASSETS

Schedule of intangible assets


(dollars in thousands)	2019		2018
Banking	$	156,120	$	149,035
Commercial FHA origination and servicing		10,892		10,892
Wealth management		4,746		4,746
Total goodwill	$	171,758	$	164,673

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


	2019						2018
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
(dollars in thousands)	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	57,012	$	(30,674)	$	26,338	$	52,712	$	(24,803)	$	27,909
Customer relationship intangibles		14,071		(5,523)		8,548		13,771		(4,304)		9,467
Total intangible assets	$	71,083	$	(36,197)	$	34,886	$	66,483	$	(29,107)	$	37,376

Schedule of estimated future amortization expense of intangible assets


(dollars in thousands)	Amount
Year ending December 31,
2020	$	6,504
2021		5,675
2022		4,900
2023		4,125
2024		3,563
Thereafter		10,119
Total	$	34,886

DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2019

DERIVATIVE INSTRUMENTS

Schedule of derivative instruments, fair value and notional amounts


	Notional Amount				Fair Value Gain
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	222,654	$	264,710	$	3,350	$	4,492
Forward commitments to sell mortgage-backed securities		221,052		276,871		—		—
Total	$	443,706	$	541,581	$	3,350	$	4,492


	Notional Amount				Fair Value Loss
(dollars in thousands)	2019		2018		2019		2018
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	—	$	54	$	—	$	—

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2019

DEPOSITS

Schedule summarizes the classification of deposits


(dollars in thousands)	2019		2018
Noninterest-bearing demand	$	1,019,472	$	972,164
Interest-bearing:
Checking		1,342,788		1,002,275
Money market		787,662		862,171
Savings		522,456		442,132
Time		871,876		795,428
Total deposits	$	4,544,254	$	4,074,170

Schedule of maturities of time deposits


(dollars in thousands)	Amount
Year ending December 31,
2020	$	507,606
2021		306,376
2022		32,304
2023		18,204
2024		7,367
Thereafter		19
Total	$	871,876

SHORT-TERM BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2019

SHORT-TERM BORROWINGS

Schedule of short term borrowings


	Repurchase Agreements
(dollars in thousands)	2019			2018
Outstanding at period-end	$	82,029		$	124,235
Average amount outstanding		121,168			138,135
Maximum amount outstanding at any month end		138,907			173,387
Weighted average interest rate:
During period		0.69	%		0.51	%
End of period		0.67	%		0.71	%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2019

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) advances


(dollars in thousands)	2019		2018
Midland States Bancorp, Inc.
Term loan – variable interest rate equal to LIBOR plus 2.25%, which was 4.63% at December 31, 2018	$	—	$	32,840
Series G redeemable preferred stock – 181 shares at $1,000 per share		181		181
Midland States Bank
FHLB advances – fixed rate, fixed term of $28.0 million and $87.7 million, at rates averaging 2.56% and 2.35% at December 31, 2019 and 2018, respectively – maturing through June 2023, and putable fixed rate of $465.0 million and $520.0 million at rates averaging 2.34% and 2.09% at December 31, 2019 and 2018, respectively, – maturing through August 2025 with call provisions through August 2021		493,130		607,610
Total FHLB advances and other borrowings	$	493,311	$	640,631

Schedule of payments over the next five years


(dollars in thousands)	Amount
2020	$	3,897
2021		8,385
2022		65,754
2023		235,094
2024		100,000
Thereafter		80,181
Total	$	493,311

SUBORDINATED DEBT (Tables)

12 Months Ended

Dec. 31, 2019

SUBORDINATED DEBT

Schedule of summary of company's subordinated debt


(dollars in thousands)	2019		2018
Subordinated debt issued June 2015 – fixed interest rate of 6.00% through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $38,325 and $40,325 at December 31, 2019 and 2018, respectively – maturing June 18, 2025	$	38,273	$	39,871
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $550 and $15,000 at December 31, 2019 and 2018, respectively – maturing June 18, 2025		544		14,831
Subordinated debt issued October 2017 - fixed interest rate of 6.25% through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 – maturing October 15, 2027		39,496		39,432
Subordinated debt issued September 2019 – fixed interest rate of 5.00% through September 2024 and a variable interest rate equivalent to three month SOFR plus 3.61% thereafter, $72,750 – maturing September 30, 2029		71,549		—
Subordinated debt issued September 2019 – fixed interest rate of 5.50% through September 2029 and a variable interest rate equivalent to three month SOFR plus 4.05% thereafter, $27,250 – maturing September 30, 2034		26,791		—
Total subordinated debt	$	176,653	$	94,134

TRUST PREFERRED DEBENTURES (Tables)

12 Months Ended

Dec. 31, 2019

TRUST PREFERRED DEBENTURES

Summary of trust preferred debentures


(dollars in thousands)	2019		2018
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 4.68% and 5.23% at December 31, 2019 and 2018, respectively – $10,310 maturing April 23, 2034	$	10,274	$	10,272
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 4.79% and 5.37%, at December 31, 2019 and 2018, respectively – $3,093 maturing January 23, 2034		2,263		2,209
Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 3.64% and 4.54% at December 31, 2019 and 2018, respectively – $20,619 maturing December 31, 2036		14,251		14,074
Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 3.36% and 4.21% at December 31, 2019 and 2018, respectively – $20,619 maturing September 6, 2037		13,428		13,249
Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 4.55% and 5.44% at December 31, 2019 and 2018, respectively - $10,310 maturing June 17, 2034		8,072		7,990
Total trust preferred debentures	$	48,288	$	47,794

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of components of income taxes


(dollars in thousands)	2019		2018		2017
Federal:
Current	$	2,318	$	55	$	(696)
Deferred		8,287		6,748		11,632
State:
Current		1,761		807		(921)
Deferred		4,321		3,774		400
Total income tax expense	$	16,687	$	11,384	$	10,415

Schedule of reconciliation of income tax expense


(dollars in thousands)	2019		2018		2017
Expected income taxes	$	15,218	$	10,665	$	9,244
Less income tax effect of:
Tax exempt interest, net		(1,362)		(1,441)		(1,635)
State tax, net of federal benefit		4,805		4,028		(110)
Increase in cash surrender value of life insurance policies		(764)		(854)		(969)
Equity-based compensation benefit		(484)		(62)		(1,297)
Non-deductible transaction costs		110		71		389
Valuation allowance		62		(409)		(229)
Effect of federal rate change enacted in 2017		—		—		4,540
Other		(898)		(614)		482
Actual income tax expense	$	16,687	$	11,384	$	10,415

Schedule of deferred tax assets, net


(dollars in thousands)	2019		2018
Assets:
Allowance for loan losses	$	7,708	$	5,748
Deferred compensation		2,332		2,158
Loans		5,386		6,579
Write-down of other real estate owned		469		563
Tax credits		1,049		1,041
Nonaccrual interest		782		730
Unrealized loss on securities		—		802
Stock compensation		588		700
Net operating losses		15,510		17,417
Accrued litigation		—		179
Allowance for repurchase reserves		—		135
Allowance for unfunded commitments		—		319
Fair value adjustment on investments		1,217		1,330
Charitable contributions		—		202
Operating lease liabilities		4,227		—
Other, net		1,122		720
Deferred tax assets		40,390		38,623
Valuation allowance		(62)		—
Deferred tax assets, net of valuation allowance		40,328		38,623
Liabilities:
Premises and equipment		1,735		3,522
Unrealized gain on securities		2,846		—
Mortgage servicing rights		11,436		11,460
Fair value adjustment on trust preferred debentures		4,560		4,694
Federal Home Loan Bank stock dividends		—		391
Deferred loan costs, net of fees		3,539		1,495
Intangible assets		8,380		8,741
Accounting method changes		—		74
Prepaid expenses		708		708
Software development costs		1,638		1,667
Leased equipment		12,313		4,351
Operating lease right-of-use assets		3,912		—
Other, net		539		269
Deferred tax liabilities		51,606		37,372
Deferred tax (liabilities) assets, net	$	(11,278)	$	1,251

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2019

SHARE-BASED COMPENSATION

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


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2018	120,327	$	3.11
Granted	—		—
Vested	(66,924)		2.84
Forfeited	(16,362)		3.88
Nonvested at December 31, 2019	37,041	$	3.26

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
Dividend yield	2.50	%
Expected volatility	16.63
Risk free interest rate	2.12
Expected life	6.25	years

Summary of our stock option plan and changes made


	2019					2018
				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	1,006,144	$	19.48			1,148,537	$	19.39
Options granted	—		—			—		—
Options exercised	(360,776)		16.46			(108,344)		16.42
Options forfeited	(22,246)		30.68			(34,049)		26.27
Options outstanding, end of year	623,122	$	20.83	4.8	years	1,006,144	$	19.48	4.9	years
Options exercisable	586,081	$	20.40	4.6	years	885,817	$	18.53	4.6	years
Options vested and expected to vest	619,032	$	20.79	4.8	years	991,774	$	19.38	4.9	years

Summary of the activity for restricted stock awards


		Weighted
		average
	Number	grant date
	outstanding	fair value
Nonvested at December 31, 2018	197,717	$	28.61
Granted during the year	129,717		27.67
Vested during the year	(57,652)		28.32
Forfeited during the year	(15,725)		27.88
Nonvested at December 31, 2019	254,057	$	28.24

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2019

EARNINGS PER SHARE

Schedule of basic and diluted earnings per common share




(dollars in thousands, except share and per share data)	2019		2018		2017
Net income	$	55,784	$	39,421	$	16,056
Preferred dividends declared		(191)		(330)		(184)
Preferred stock, premium amortization		145		189		101
Net income available to common shareholders		55,738		39,280		15,973
Common shareholder dividends		(23,389)		(19,838)		(13,922)
Unvested restricted stock award dividends		(210)		(139)		(86)
Undistributed earnings to unvested restricted stock awards		(267)		(123)		(11)
Undistributed earnings to common shareholders	$	31,872	$	19,180	$	1,954
Basic
Distributed earnings to common shareholders	$	23,389	$	19,838	$	13,922
Undistributed earnings to common shareholders		31,872		19,180		1,954
Total common shareholders earnings, basic	$	55,261	$	39,018	$	15,876
Diluted
Distributed earnings to common shareholders	$	23,389	$	19,838	$	13,922
Undistributed earnings to common shareholders		31,872		19,180		1,954
Total common shareholders earnings		55,261		39,018		15,876
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		2		2		—
Total common shareholders earnings, diluted	$	55,263	$	39,020	$	15,876
Weighted average common shares outstanding, basic		24,288,793		23,130,475		17,781,631
Options		204,638		418,550		501,583
Weighted average common shares outstanding, diluted		24,493,431		23,549,025		18,283,214
Basic earnings per common share	$	2.28	$	1.69	$	0.89
Diluted earnings per common share		2.26		1.66		0.87

CAPITAL REQUIREMENTS (Tables)

12 Months Ended

Dec. 31, 2019

CAPITAL REQUIREMENTS

Schedule of actual and required capital amounts and ratios


									Required to be
					Fully Phased-In				Well Capitalized Under
					Regulatory				Prompt Corrective
	Actual				Guidelines Minimum				Action Requirements
(dollars in thousands)	Amount		Ratio		Amount		Ratio			Amount	Ratio
December 31, 2019
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	772,572	14.72	%	$	515,548	10.50	%		N/A	N/A
Midland States Bank		648,291	13.22			515,035	10.50		$	490,509	10.00	%
Common Equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		451,696	9.20			343,699	7.00			N/A	N/A
Midland States Bank		619,019	12.62			343,356	7.00			318,831	6.50
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		516,647	10.52			417,348	8.50			N/A	N/A
Midland States Bank		619,019	12.62			416,933	8.50			392,407	8.00
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		516,647	8.74			236,504	4.00			N/A	N/A
Midland States Bank		619,019	10.48			236,214	4.00			295,267	5.00

December 31, 2018
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	584,409	12.79	%	$	479,781	10.50	%		N/A	N/A
Midland States Bank		583,465	12.76			480,236	10.50		$	457,368	10.00	%
Common Equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		400,480	8.76			319,854	7.00			N/A	N/A
Midland States Bank		561,402	12.27			320,157	7.00			297,289	6.50
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		468,212	10.25			388,394	8.50			N/A	N/A
Midland States Bank		561,402	12.27			388,763	8.50			365,894	8.00
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		468,212	8.53			219,602	4.00			N/A	N/A
Midland States Bank		561,402	10.22			219,622	4.00			274,528	5.00

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2019

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured and recorded at fair value


	2019
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
(dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. government sponsored entities and U.S. agency securities	$	60,020	$	—	$	60,020	$	—
Mortgage-backed securities - agency		324,974		—		324,974		—
Mortgage-backed securities - non-agency		17,148		—		17,148		—
State and municipal securities		124,555		—		124,555		—
Corporate securities		122,736		—		121,781		955
Equity securities		5,621		—		5,621		—
Loans held for sale		16,431		—		16,431		—
Interest rate lock commitments		3,350		—		3,350		—
Interest rate swap contracts		306		—		306		—
Total	$	675,141	$	—	$	674,186	$	955
Liabilities
Interest rate swap contracts	$	306	$	—	$	306	$	—

Assets measured at fair value on a non-recurring basis:
Loan servicing rights	$	53,824	$	—	$	—	$	53,824
Mortgage servicing rights held for sale		1,972		—		—		1,972
Impaired loans		14,693		—		12,518		2,175
Assets held for sale		3,974		—		3,974		—


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

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

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




(dollars in thousands)	2019		2018		2017
Loan servicing rights	$	2,139	$	—	$	2,324
Mortgage servicing rights held for sale		(490)		458		4,059
Impaired loans		10,259		5,800		7,096
Other real estate owned		16		301		253
Assets held for sale		3,577		—		1,516
Total loss on assets measured on a nonrecurring basis	$	15,501	$	6,559	$	15,248

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


	Corporate Securities
(dollars in thousands)	2019		2018
Balance, beginning of period	$	1,923	$	4,779
Total realized in earnings ⁽¹⁾		52		242
Total unrealized in other comprehensive income		32		(36)
Net settlements (principal and interest)		(1,052)		(3,062)
Balance, end of period	$	955	$	1,923

(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)

Valuation

Unobservable

(dollars in thousands)

Fair Value

technique

input / assumptions

Range (weighted average)

December 31, 2019

Loan servicing rights:

Commercial MSR

52,693

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.20%)

Discount rate

10.00% - 14.00% (11.02%)

SBA servicing rights

1,131

Discounted cash flow

Prepayment speed

8.31% - 9.21% (8.60%)

Discount rate

No range (11.70%)

MSR held for sale

1,972

Discounted cash flow

Prepayment speed

8.64% - 26.28% (12.42%)

Discount rate

9.50% - 12.50% (10.75%)

Other:

Impaired loans

2,175

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.22%)

age of appraisal and current status

December 31, 2018

Loan servicing rights:

Commercial MSR

53,447

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.24%)

Discount rate

10.00% - 27.00% (11.12%)

Other:

Impaired loans

2,012

Fair value of collateral

Discount for type of property,

5.00% - 7.26% (5.26%)

age of appraisal and current status

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


	2019						2018
	Aggregate				Contractual		Aggregate				Contractual
(dollars in thousands)	fair value		Difference		principal		fair value		Difference		principal
Commercial loans held for sale	$	8,236	$	206	$	8,030	$	22,280	$	595	$	21,685
Residential loans held for sale		8,195		446		7,749		8,121		484		7,637
Total loans held for sale	$	16,431	$	652	$	15,779	$	30,401	$	1,079	$	29,322


(dollars in thousands)	2019		2018		2017
Commercial loans held for sale	$	(389)	$	252	$	(650)
Residential loans held for sale		7		6		(74)
Total loans held for sale	$	(382)	$	258	$	(724)

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


	2019
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	392,694	$	392,694	$	392,694	$	—	$	—
Federal funds sold		1,811		1,811		1,811		—		—
Nonmarketable equity securities		44,505		44,505		—		44,505		—
Loans, net		4,373,382		4,385,768		—		—		4,385,768
Accrued interest receivable		16,346		16,346		—		16,346		—

Liabilities
Deposits	$	4,544,254	$	4,548,327	$	—	$	4,548,327	$	—
Short-term borrowings		82,029		82,029		—		82,029		—
FHLB and other borrowings		493,311		506,832		—		506,832		—
Subordinated debt		176,653		182,189		—		182,189		—
Trust preferred debentures		48,288		53,811		—		53,811		—
Accrued interest payable		6,400		6,400		—		6,400		—


	2018
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
	Carrying				assets		inputs		inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	210,780	$	210,780	$	210,780	$	—	$	—
Federal funds sold		2,920		2,920		2,920		—		—
Nonmarketable equity securities		42,472		42,472		—		42,472		—
Loans, net		4,116,648		4,091,438		—		—		4,091,438
Accrued interest receivable		16,560		16,560		—		16,560		—

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

- 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

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables)

12 Months Ended

Dec. 31, 2019

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Schedule of loan commitments


(dollars in thousands)	2019		2018
Commitments to extend credit	$	725,506	$	663,555
Financial guarantees – standby letters of credit		106,678		142,859

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

Schedule of segment financial information


					Commercial FHA
				Wealth	Origination and
(dollars in thousands)	Banking			Management	Servicing		Other		Total
December 31, 2019
Net interest income (expense)	$	202,147	$	—	$	(613)	$	(11,719)	$	189,815
Provision for loan losses		16,985		—		—		—		16,985
Noninterest income		39,184		21,832		14,498		(232)		75,282
Noninterest expense		150,366		13,914		10,934		427		175,641
Income (loss) before income taxes (benefit)		73,980		7,918		2,951		(12,378)		72,471
Income taxes (benefit)		18,038		617		1,389		(3,357)		16,687
Net income (loss)	$	55,942	$	7,301	$	1,562	$	(9,021)	$	55,784
Total assets	$	6,000,496	$	20,969	$	91,496	$	(25,944)	$	6,087,017

December 31, 2018
Net interest income (expense)	$	190,883	$	298	$	(422)	$	(10,672)	$	180,087
Provision for loan losses		9,430		—		—		—		9,430
Noninterest income		40,313		20,484		11,457		(463)		71,791
Noninterest expense		165,744		11,680		15,058		(839)		191,643
Income (loss) before income taxes (benefit)		56,022		9,102		(4,023)		(10,296)		50,805
Income taxes (benefit)		14,154		514		(979)		(2,305)		11,384
Net income (loss)	$	41,868	$	8,588	$	(3,044)	$	(7,991)	$	39,421
Total assets	$	5,571,752	$	18,218	$	91,108	$	(43,405)	$	5,637,673

December 31, 2017
Net interest income (expense)	$	135,974	$	524	$	312	$	(7,148)	$	129,662
Provision for loan losses		9,556		—		—		—		9,556
Noninterest income		27,955		13,339		18,570		(502)		59,362
Noninterest expense		129,626		8,823		13,729		819		152,997
Income (loss) before income taxes (benefit)		24,747		5,040		5,153		(8,469)		26,471
Income taxes (benefit)		17,102		423		(1,033)		(6,077)		10,415
Net income (loss)	$	7,645	$	4,617	$	6,186	$	(2,392)	$	16,056
Total assets	$	4,336,301	$	15,979	$	99,685	$	(39,264)	$	4,412,701

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

12 Months Ended

Dec. 31, 2019

REVENUE FROM CONTRACTS WITH CUSTOMERS

Summary of noninterest income, segregated by revenue


(dollars in thousands)	2019		2018		2017
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	16,114	$	16,099	$	9,751
Investment advisory fees		2,171		2,041		1,364
Investment brokerage fees		1,165		1,065		1,388
Other		2,382		1,308		837
Service charges on deposit accounts:
Nonsufficient fund fees		7,721		7,672		4,193
Other		3,306		2,768		1,782
Interchange revenues		11,992		10,674		5,353
Other income:
Merchant services revenue		1,506		1,650		1,103
Other		3,475		2,935		1,869
Noninterest income - out-of-scope of Topic 606		25,450		25,579		31,722
Total noninterest income	$	75,282	$	71,791	$	59,362

PARENT COMPANY ONLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2019

PARENT COMPANY ONLY FINANCIAL INFORMATION

Schedule of condensed balance sheets


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2019		2018
Assets:
Cash	$	52,673	$	20,312
Investment in common stock of subsidiaries		832,681		764,483
Accrued income taxes receivable		2,563		—
Other assets		2,371		2,330
Total assets	$	890,288	$	787,125
Liabilities:
Subordinated debt	$	176,653	$	94,134
Trust preferred debentures		48,288		47,794
Other borrowings		181		33,021
Accrued income taxes payable		—		778
Deferred tax liabilities, net		849		972
Other liabilities		2,406		1,901
Total liabilities		228,377		178,600
Shareholders’ equity		661,911		608,525
Total liabilities and shareholders’ equity	$	890,288	$	787,125

Schedule of condensed Statement of income


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2019		2018		2017
Dividends from subsidiaries	$	43,900	$	17,000	$	19,500
Other income		—		6		4
Interest expense		(11,798)		(10,714)		(7,162)
Other expense		(2,753)		(1,180)		(1,295)
Income before income tax benefit and equity in undistributed income (loss) of subsidiaries		29,349		5,112		11,047
Income tax benefit		3,371		2,312		6,080
Income before equity in undistributed income (loss) of subsidiaries		32,720		7,424		17,127
Equity in undistributed income (loss) of subsidiaries		23,064		31,997		(1,071)
Net income	$	55,784	$	39,421	$	16,056

Schedule of condensed cash flows


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2019		2018		2017
Cash flows from operating activities:
Net income	$	55,784	$	39,421	$	16,056
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (income) loss of subsidiaries		(23,064)		(31,997)		1,071
Share-based compensation expense		2,364		1,533		1,384
Change in other assets		(2,604)		3,273		(3,226)
Change in other liabilities		1,528		2,863		1,649
Net cash provided by operating activities		34,008		15,093		16,934
Cash flows from investing activities:
Net cash paid in acquisition		(1,021)		(32,890)		(60,457)
Capital injection to subsidiaries		—		—		(350)
Net cash used in investing activities		(1,021)		(32,890)		(60,807)
Cash flows from financing activities:
Proceeds from issuance of subordinated debt, net of issuance costs		98,265		—		39,354
Payments made on subordinated debt		(17,765)		—		—
Proceeds from other borrowings, net of issuance costs		—		—		39,964
Payments made on other borrowings		(56,475)		(4,286)		(2,857)
Cash dividends paid on preferred stock		(191)		(330)		(184)
Redemption of Series H preferred stock		(2,636)		—		—
Cash dividends paid on common stock		(23,599)		(19,977)		(14,008)
Common stock repurchased		(4,019)		—		—
Proceeds from issuance of common stock under employee benefit plans		5,794		2,278		3,225
Net cash (used in) provided by financing activities		(626)		(22,315)		65,494
Net increase (decrease) in cash		32,361		(40,112)		21,621
Cash:
Beginning of period		20,312		60,424		38,803
End of period	$	52,673	$	20,312	$	60,424

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2019

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

Schedule of unaudited quarterly condensed financial information


	2019 Quarter Ended
(dollars in thousands, except per share data)	March 31		June 30		September 30		December 31
Interest income	$	59,432	$	60,636	$	65,006	$	64,444
Interest expense		13,831		14,559		15,556		15,757
Net interest income		45,601		46,077		49,450		48,687
Provision for loan losses		3,243		4,076		4,361		5,305
Net interest income after provision for loan losses		42,358		42,001		45,089		43,382
Noninterest income		17,075		19,587		19,606		19,014
Noninterest expense		41,097		40,194		48,025		46,325
Income before income taxes		18,336		21,394		16,670		16,071
Income taxes		4,354		5,039		4,015		3,279
Net income		13,982		16,355		12,655		12,792
Preferred stock dividends and premium amortization		34		34		(22)		—
Net income available to common shareholders	$	13,948	$	16,321	$	12,677	$	12,792
Per common share data:
Basic earnings per common share	$	0.58	$	0.67	$	0.51	$	0.52
Diluted earnings per common share		0.57		0.67		0.51		0.51


	2018 Quarter Ended
(dollars in thousands, except per share data)	March 31		June 30		September 30		December 31
Interest income	$	46,505	$	58,283	$	56,987	$	61,592
Interest expense		8,320		9,997		11,906		13,057
Net interest income		38,185		48,286		45,081		48,535
Provision for loan losses		2,006		1,854		2,103		3,467
Net interest income after provision for loan losses		36,179		46,432		42,978		45,068
Noninterest income		16,502		15,847		18,272		21,170
Noninterest expense		49,499		46,452		50,317		45,375
Income before income taxes		3,182		15,827		10,933		20,863
Income taxes		1,376		3,045		2,436		4,527
Net income		1,806		12,782		8,497		16,336
Preferred stock dividends and premium amortization		36		36		35		34
Net income available to common shareholders	$	1,770	$	12,746	$	8,462	$	16,302
Per common share data:
Basic earnings per common share	$	0.08	$	0.53	$	0.35	$	0.68
Diluted earnings per common share		0.08		0.52		0.35		0.67

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Jan. 01, 2020 USD ($)	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Indemnification Asset Due from FDIC
Liabilities for unfunded commitments	$ 1,200			$ 1,200
Impact of Recently Issued Accounting Standards
Increase in allowance for credit losses for loans and leases	28,028			$ 20,903	$ 16,431	$ 14,862
ASU 2016-02
Impact of Recently Issued Accounting Standards
Increase in assets and liabilities			$ 12,100
ASU No. 2016-13 \| Restatement
Impact of Recently Issued Accounting Standards
Increase in allowance for credit losses for loans and leases	$ 15,000	$ 25,000
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
Furniture and equipment \| Minimum
Premises and Equipment
Estimated useful lives	3 years
Furniture and equipment \| Maximum
Premises and Equipment
Estimated useful lives	10 years

ACQUISITIONS (Details)					3 Months Ended	12 Months Ended
ACQUISITIONS (Details)	Jul. 17, 2019 USD ($) item shares	Jun. 30, 2018 USD ($)	Feb. 28, 2018 USD ($) item shares	Jun. 09, 2017 USD ($) item shares	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares
Liabilities assumed:
Goodwill					$ 171,758,000	$ 171,758,000	$ 164,673,000
Maximum
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life						20 years
HomeStar Bank
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Number of service banking centers acquired \| item	5
Total consideration	$ 11,400,000
Cash transferred	$ 1,000,000.0
Shares issued \| shares	404,968
Transaction and integration costs	$ 7,400,000
Measurement period adjustment increase in goodwill					$ 684,000
Net loans	211,070,000
Total deposits	321,740,000
Assets acquired:
Cash and cash equivalents	70,900,000
Investment securities available for sale	54,963,000
Equity securities	2,153,000
Loans	211,070,000
Loans held for sale	3,562,000
Premises and equipment	4,049,000
Operating lease right-of-use asset	5,177,000
Other real estate owned	1,092,000
Nonmarketable equity securities	454,000
Accrued interest receivable	1,185,000
Loan servicing rights	1,089,000
Mortgage servicing rights held for sale	1,701,000
Intangible assets	4,600,000
Accrued income taxes receivable	7,000
Deferred tax assets, net	3,702,000
Other assets	1,511,000
Total assets acquired	367,215,000
Liabilities assumed:
Deposits	321,740,000
FHLB advances and other borrowings	31,369,000
Accrued interest payable	115,000
Operating lease liabilities	6,241,000
Other liabilities	3,475,000
Total liabilities assumed	362,940,000
Net assets acquired	4,275,000
Goodwill	7,085,000
Total consideration paid	11,360,000
Intangible assets:
Total intangible assets	4,600,000
HomeStar Bank \| Core deposits
Intangible assets:
Total intangible assets	$ 4,300,000
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	12 years
HomeStar Bank \| Customer relationship
Intangible assets:
Total intangible assets	$ 300,000
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Alpine Bank
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Number of service banking centers acquired \| item			19
Total consideration			$ 173,200,000
Cash transferred			$ 33,300,000
Shares issued \| shares			4,463,200
Transaction and integration costs			$ 22,400,000
Net loans		$ 786,186,000
Total deposits		1,111,130,000
Assets acquired:
Cash and cash equivalents		69,459,000
Investment securities available for sale		293,428,000
Equity securities		8,372,000
Loans		786,186,000
Loans held for sale		3,416,000
Premises and equipment		18,126,000
Other real estate owned		53,000
Nonmarketable equity securities		2,038,000
Accrued interest receivable		4,414,000
Mortgage servicing rights held for sale		3,068,000
Intangible assets		27,400,000
Cash surrender value of life insurance policies		22,578,000
Other assets		4,770,000
Total assets acquired		1,243,308,000
Liabilities assumed:
Deposits		1,111,130,000
FHLB advances and other borrowings		18,127,000
Accrued interest payable		539,000
Deferred tax liabilities, net		1,749,000
Other liabilities		4,500,000
Total liabilities assumed		1,136,045,000
Net assets acquired		107,263,000
Goodwill		65,964,000
Total consideration paid		173,227,000
Business Acquisition, Pro Forma Information
Revenue						$ 275,179,000	282,648,000
Net income						$ 58,422,000	$ 48,318,000
Diluted earnings per common share \| $ / shares						$ 2.34	$ 1.94
Intangible assets:
Total intangible assets		27,400,000
Alpine Bank \| Core deposits
Intangible assets:
Total intangible assets		$ 21,100,000
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		13 years
Alpine Bank \| Customer relationship
Intangible assets:
Total intangible assets		$ 6,300,000
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		13 years
Centrue
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Number of service banking centers acquired \| item				20
Total consideration				$ 176,600,000
Cash transferred				61,000,000.0
Transaction and integration costs				$ 17,900,000
Net loans		$ 679,582,000
Total deposits		739,867,000
Assets acquired:
Cash and cash equivalents		42,461,000
Investment securities available for sale		149,013,000
Loans		679,582,000
Loans held for sale		531,000
Premises and equipment		17,147,000
Other real estate owned		4,983,000
Nonmarketable equity securities		8,168,000
Accrued interest receivable		2,376,000
Loan servicing rights		1,933,000
Intangible assets		11,070,000
Cash surrender value of life insurance policies		36,349,000
Deferred tax assets, net		34,339,000
Other assets		2,256,000
Total assets acquired		990,208,000
Liabilities assumed:
Deposits		739,867,000
Short-term borrowings		14,434,000
FHLB advances and other borrowings		95,332,000
Trust preferred debentures		7,565,000
Accrued interest payable		275,000
Other liabilities		3,600,000
Total liabilities assumed		861,073,000
Net assets acquired		129,135,000
Goodwill		47,444,000
Total consideration paid		176,579,000
Intangible assets:
Total intangible assets		11,070,000
Centrue \| Core deposits
Intangible assets:
Total intangible assets		$ 11,070,000
Estimated useful lives:
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		8 years
Centrue \| Common stock
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Shares issued \| shares				3,219,238
Centrue \| Series G Preferred Stock
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Shares issued \| shares				181
Centrue \| Series H preferred stock
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Shares issued \| shares				2,635.5462
Acquired receivables subject to ASC 310-30 \| HomeStar Bank
Acquired loan data
Fair value of acquired loans at acquisition date	$ 17,553,000
Gross contractual amounts receivable at acquisition date	19,587,000
Best estimate at acquisition date of contractual cash flows not expected to be collected	1,607,000
Acquired receivables subject to ASC 310-30 \| Alpine Bank
Acquired loan data
Fair value of acquired loans at acquisition date			34,993,000
Gross contractual amounts receivable at acquisition date			50,342,000
Best estimate at acquisition date of contractual cash flows not expected to be collected			9,254,000
Acquired receivables subject to ASC 310-30 \| Centrue
Acquired loan data
Fair value of acquired loans at acquisition date		$ 11,381,000
Gross contractual amounts receivable at acquisition date		20,253,000
Best estimate at acquisition date of contractual cash flows not expected to be collected		7,227,000
Acquired receivables not subject to ASC 310-30 [member] \| HomeStar Bank
Acquired loan data
Fair value of acquired loans at acquisition date	193,517,000
Gross contractual amounts receivable at acquisition date	203,693,000
Best estimate at acquisition date of contractual cash flows not expected to be collected	$ 5,281,000
Acquired receivables not subject to ASC 310-30 [member] \| Alpine Bank
Acquired loan data
Fair value of acquired loans at acquisition date			751,193,000
Gross contractual amounts receivable at acquisition date			774,836,000
Best estimate at acquisition date of contractual cash flows not expected to be collected			$ 4,244,000
Acquired receivables not subject to ASC 310-30 [member] \| Centrue
Acquired loan data
Fair value of acquired loans at acquisition date		668,201,000
Gross contractual amounts receivable at acquisition date		821,338,000
Best estimate at acquisition date of contractual cash flows not expected to be collected		$ 4,835,000

CASH AND DUE FROM BANKS (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
CASH AND DUE FROM BANKS
Required Cash Reserve	$ 36.9	$ 33.6

INVESTMENT SECURITIES - Classified (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Available for sale securities
Amortized cost	$ 639,168
Gross unrealized gains	11,139
Gross unrealized losses	874
Fair value	649,433
Equity securities recorded at fair value	5,621	$ 3,334
Other Comprehensive Income (Loss), Transfers from Held-to-maturity to Available-for-Sale Securities, before Tax			$ 3,366
U.S. Treasury securities
Available for sale securities
Amortized cost		25,018
Gross unrealized losses		368
Fair value		24,650
U.S. government sponsored entities and U.S. agency securities
Available for sale securities
Amortized cost	59,600	76,554
Gross unrealized gains	442	17
Gross unrealized losses	22	887
Fair value	60,020	75,684
Agency mortgage-backed securities
Available for sale securities
Amortized cost	321,840	329,690
Gross unrealized gains	3,368	371
Gross unrealized losses	234	3,756
Fair value	324,974	326,305
Non-agency mortgage-backed securities
Available for sale securities
Amortized cost	17,198
Gross unrealized gains	3
Gross unrealized losses	53
Fair value	17,148
State and municipal securities
Available for sale securities
Amortized cost	119,371	156,795
Gross unrealized gains	5,195	3,282
Gross unrealized losses	11	815
Fair value	124,555	159,262
Corporate Securities
Available for sale securities
Amortized cost	121,159	72,302
Gross unrealized gains	2,131	383
Gross unrealized losses	554	1,135
Fair value	$ 122,736	71,550
Corporate Securities
Available for sale securities
Amortized cost		660,359
Gross unrealized gains		4,053
Gross unrealized losses		6,961
Fair value		$ 657,451

INVESTMENT SECURITIES - Continuous unrealized loss position (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) item	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Securities available for sale:
Less than 12 Months, Fair value	$ 115,677	$ 244,251
Less than 12 Months, Unrealized loss	737	1,445
12 Months or more, Fair value	11,085	205,649
12 Months or more, Unrealized loss	137	5,516
Total, Fair value	126,762	449,900
Total, Unrealized loss	$ 874	6,961
Unrealized loss
Debt Securities Available For Sale Unrealized Loss Position Number Of Positions \| item	46
Aggregate depreciation	0.68%
Other than temporary impairment:
Other than temporary impairment, recognized as losses	$ 0	0	$ 0
U.S. Treasury securities
Securities available for sale:
Less than 12 Months, Fair value		5,012
Less than 12 Months, Unrealized loss		1
12 Months or more, Fair value		19,638
12 Months or more, Unrealized loss		367
Total, Fair value		24,650
Total, Unrealized loss		368
U.S. government sponsored entities and U.S. agency securities
Securities available for sale:
Less than 12 Months, Fair value	7,200	51,717
Less than 12 Months, Unrealized loss	22	195
12 Months or more, Fair value		23,223
12 Months or more, Unrealized loss		692
Total, Fair value	7,200	74,940
Total, Unrealized loss	22	887
Agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	75,336	139,115
Less than 12 Months, Unrealized loss	170	528
12 Months or more, Fair value	7,170	126,561
12 Months or more, Unrealized loss	64	3,228
Total, Fair value	82,506	265,676
Total, Unrealized loss	234	3,756
State and municipal securities
Securities available for sale:
Less than 12 Months, Fair value	1,813	15,791
Less than 12 Months, Unrealized loss	11	146
12 Months or more, Fair value		27,692
12 Months or more, Unrealized loss		669
Total, Fair value	1,813	43,483
Total, Unrealized loss	11	815
Corporate Securities
Securities available for sale:
Less than 12 Months, Fair value	20,269	32,616
Less than 12 Months, Unrealized loss	481	575
12 Months or more, Fair value	3,915	8,535
12 Months or more, Unrealized loss	73	560
Total, Fair value	24,184	41,151
Total, Unrealized loss	554	$ 1,135
Non-agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	11,059
Less than 12 Months, Unrealized loss	53
Total, Fair value	11,059
Total, Unrealized loss	$ 53

INVESTMENT SECURITIES - Amortized cost and fair value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amortized cost of available-for-sale securities, by contractual maturity
Within one year	$ 37,463
After one year through five years	73,251
After five years through ten years	169,906
After ten years	19,510
Total, single maturity date	639,168
Fair Value of available-for-sale securities, by contractual maturity
Within one year	37,669
After one year through five years	75,147
After five years through ten years	173,900
After ten years	20,595
Total, single maturity date	649,433
Gross realized gains/losses
Proceeds from sales	33,464	$ 20,178	$ 22,595
Gross realized gains on sales	786	542	242
Gross realized losses on sales	(190)	(25)	$ (20)
Equity securities recorded at fair value	5,621	3,334
Proceeds from sales	105	7,733
Gross realized gains on sales	78
Gross realized losses on sales		(53)
Net unrealized gains (losses)	93	$ (10)
Mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Total, single maturity date	339,038
Fair Value of available-for-sale securities, by contractual maturity
Total, single maturity date	$ 342,122

LOANS - Summary of loans (Details) - USD ($) $ in Thousands	12 Months Ended
LOANS - Summary of loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Summary of loans
Loans	$ 4,401,410	$ 4,137,551
Loans, additional information
Net deferred loan fees	2,200	11,600
Unearned income	39,600	29,200
Loans held for sale	16,431	30,401
Proceeds from sales of loans held for sale	530,530	590,282	$ 815,471
Proceeds from sale of consumer loans held for sale	59,486
Directors, executive officers, principal shareholders and affiliates
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Loans outstanding to related parties	23,000	26,500
New loans to related parties and other additions	3,400	11,100
Repayments from related parties and other reductions	6,900	6,900
Commercial Portfolio
Summary of loans
Loans	2,790,422	2,682,268
Commercial Portfolio \| Commercial
Summary of loans
Loans	1,055,185	810,884
Commercial Portfolio \| Commercial real estate
Summary of loans
Loans	1,526,504	1,639,155
Commercial Portfolio \| Construction and land development
Summary of loans
Loans	208,733	232,229
Other loan portfolio \| Residential real estate
Summary of loans
Loans	568,291	578,048
Other loan portfolio \| Consumer loans held for sale
Summary of loans
Loans	710,116	613,184
Other loan portfolio \| Lease financing
Summary of loans
Loans	332,581	264,051
Commercial and Residential Loan
Loans, additional information
Loans held for sale	16,400	30,400
Commercial real estate and residential real estate loan
Loans, additional information
Proceeds from sales of loans held for sale	530,100	590,300
Consumer loans held for sale
Loans, additional information
Proceeds from sale of consumer loans held for sale	59,500
Non-PCI loans
Summary of loans
Loans	4,358,699	4,094,576
Non-PCI loans \| Commercial Portfolio
Summary of loans
Loans	2,761,560	2,649,828
Non-PCI loans \| Commercial Portfolio \| Commercial
Summary of loans
Loans	1,052,107	806,027
Non-PCI loans \| Commercial Portfolio \| Commercial real estate
Summary of loans
Loans	1,506,397	1,619,903
Non-PCI loans \| Commercial Portfolio \| Construction and land development
Summary of loans
Loans	203,056	223,898
Non-PCI loans \| Other loan portfolio
Summary of loans
Loans	1,597,139	1,444,748
Non-PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	555,654	569,289
Non-PCI loans \| Other loan portfolio \| Consumer loans held for sale
Summary of loans
Loans	708,904	611,408
Non-PCI loans \| Other loan portfolio \| Lease financing
Summary of loans
Loans	332,581	264,051
PCI loans
Summary of loans
Loans	42,711	42,975
Customer outstanding balances	51,900	56,900
PCI loans \| Commercial Portfolio
Summary of loans
Loans	28,862	32,440
PCI loans \| Commercial Portfolio \| Commercial
Summary of loans
Loans	3,078	4,857
PCI loans \| Commercial Portfolio \| Commercial real estate
Summary of loans
Loans	20,107	19,252
PCI loans \| Commercial Portfolio \| Construction and land development
Summary of loans
Loans	5,677	8,331
PCI loans \| Other loan portfolio \| Residential real estate
Summary of loans
Loans	12,637	8,759
PCI loans \| Other loan portfolio \| Consumer loans held for sale
Summary of loans
Loans	$ 1,212	$ 1,776

LOANS - Impaired Loans (Details) - USD ($)	12 Months Ended
LOANS - Impaired Loans (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	2,200,000	1,800,000	860,000
Recognized interest income on loans modified under troubled debt restructurings	117,000	97,000	$ 85,000
PCI loans
Summary of impaired loans
Total impaired loans	42,700,000	43,000,000.0
Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	42,082,000	42,899,000
Commercial Portfolio \| Commercial \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	6,278,000	8,928,000
Commercial Portfolio \| Commercial real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	23,462,000	23,868,000
Commercial Portfolio \| Construction and land development \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	1,349,000	1,307,000
Other loan portfolio \| Residential real estate \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	9,024,000	7,270,000
Other loan portfolio \| Consumer loans held for sale \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	376,000	569,000
Other loan portfolio \| Lease financing \| Non-PCI loans \| Impaired
Summary of impaired loans
Total impaired loans	$ 1,593,000	$ 957,000

LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Impaired loans (excluding PCI loans) by portfolio
Difference between the recorded investment and unpaid principal balance	$ 15,300	$ 11,400
Impaired \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	26,214	20,861
With a valuation allowance, Unpaid Principal Balance	30,472	27,989
With a valuation allowance, Average Annual Recorded Investment	28,928	21,597	$ 13,677
With a related valuation allowance, Interest Income Recognized while on Impaired Status	138	119	127
With no related valuation allowance, Recorded Investment	15,868	22,038
With no related valuation allowance, Unpaid Principal Balance	26,935	26,301
With no related valuation allowance, Average Annual Recorded Investment	17,252	22,272	22,356
With no related valuation allowance, Interest Income Recognized while on Impaired Status	33	44	3
Total impaired loans	42,082	42,899
Total, Unpaid Principal Balance	57,407	54,290
Total, Related Valuation Allowance	10,765	5,985
Total, Average Annual Recorded Investment	46,180	43,869	36,033
Total, Interest Income Recognized While on Impaired Status	171	163	130
Commercial \| Impaired \| Commercial Portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	4,562	7,945
With a valuation allowance, Unpaid Principal Balance	4,672	8,102
With a valuation allowance, Average Annual Recorded Investment	4,737	8,359	2,969
With a related valuation allowance, Interest Income Recognized while on Impaired Status	28	30	15
With no related valuation allowance, Recorded Investment	1,716	983
With no related valuation allowance, Unpaid Principal Balance	5,210	4,392
With no related valuation allowance, Average Annual Recorded Investment	2,029	1,233	2,369
Total impaired loans	6,278	8,928
Total, Unpaid Principal Balance	9,882	12,494
Total, Related Valuation Allowance	3,632	4,448
Total, Average Annual Recorded Investment	6,766	9,592	5,338
Total, Interest Income Recognized While on Impaired Status	28	30	15
Commercial real estate \| Impaired \| Commercial Portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	14,603	7,496
With a valuation allowance, Unpaid Principal Balance	17,765	13,844
With a valuation allowance, Average Annual Recorded Investment	16,786	8,082	5,408
With a related valuation allowance, Interest Income Recognized while on Impaired Status	77	45	70
With no related valuation allowance, Recorded Investment	8,859	16,372
With no related valuation allowance, Unpaid Principal Balance	15,716	16,921
With no related valuation allowance, Average Annual Recorded Investment	9,631	16,253	16,822
With no related valuation allowance, Interest Income Recognized while on Impaired Status	12	22
Total impaired loans	23,462	23,868
Total, Unpaid Principal Balance	33,481	30,765
Total, Related Valuation Allowance	6,068	523
Total, Average Annual Recorded Investment	26,417	24,335	22,230
Total, Interest Income Recognized While on Impaired Status	89	67	70
Construction and land development \| Impaired \| Commercial Portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	104	171
With a valuation allowance, Unpaid Principal Balance	150	171
With a valuation allowance, Average Annual Recorded Investment	113	175	83
With a related valuation allowance, Interest Income Recognized while on Impaired Status		3	4
With no related valuation allowance, Recorded Investment	1,245	1,136
With no related valuation allowance, Unpaid Principal Balance	1,252	1,136
With no related valuation allowance, Average Annual Recorded Investment	1,254	1,152	815
With no related valuation allowance, Interest Income Recognized while on Impaired Status	3
Total impaired loans	1,349	1,307
Total, Unpaid Principal Balance	1,402	1,307
Total, Related Valuation Allowance	14	54
Total, Average Annual Recorded Investment	1,367	1,327	898
Total, Interest Income Recognized While on Impaired Status	3	3	4
Residential real estate \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	5,319	4,055
With a valuation allowance, Unpaid Principal Balance	6,138	4,662
With a valuation allowance, Average Annual Recorded Investment	5,528	3,855	3,854
With a related valuation allowance, Interest Income Recognized while on Impaired Status	33	41	38
With no related valuation allowance, Recorded Investment	3,705	3,215
With no related valuation allowance, Unpaid Principal Balance	4,413	3,516
With no related valuation allowance, Average Annual Recorded Investment	3,993	3,348	2,055
With no related valuation allowance, Interest Income Recognized while on Impaired Status	17	22	3
Total impaired loans	9,024	7,270
Total, Unpaid Principal Balance	10,551	8,178
Total, Related Valuation Allowance	734	554
Total, Average Annual Recorded Investment	9,521	7,203	5,909
Total, Interest Income Recognized While on Impaired Status	50	63	41
Consumer loans held for sale \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	368	428
With a valuation allowance, Unpaid Principal Balance	488	444
With a valuation allowance, Average Annual Recorded Investment	505	360	299
With no related valuation allowance, Recorded Investment	8	141
With no related valuation allowance, Unpaid Principal Balance	9	145
With no related valuation allowance, Average Annual Recorded Investment	10	95	13
With no related valuation allowance, Interest Income Recognized while on Impaired Status	1
Total impaired loans	376	569
Total, Unpaid Principal Balance	497	589
Total, Related Valuation Allowance	39	45
Total, Average Annual Recorded Investment	515	455	312
Total, Interest Income Recognized While on Impaired Status	1
Lease financing \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	1,258	766
With a valuation allowance, Unpaid Principal Balance	1,259	766
With a valuation allowance, Average Annual Recorded Investment	1,259	766	1,064
With no related valuation allowance, Recorded Investment	335	191
With no related valuation allowance, Unpaid Principal Balance	335	191
With no related valuation allowance, Average Annual Recorded Investment	335	191	282
Total impaired loans	1,593	957
Total, Unpaid Principal Balance	1,594	957
Total, Related Valuation Allowance	278	361
Total, Average Annual Recorded Investment	$ 1,594	$ 957	$ 1,346

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	$ 4,401,410	$ 4,137,551
Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	38,401	38,187
Total Past Due	68,640	64,461
Current	4,290,059	4,030,115
Loans and Leases Receivable, Gross, Total	4,358,699	4,094,576
Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	19,416	17,494
Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	10,460	7,719
Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	363	1,061
Commercial Portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,790,422	2,682,268
Commercial Portfolio \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	2,761,560	2,649,828
Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,597,139	1,444,748
Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	10,993	8,796
Commercial \| Commercial Portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,055,185	810,884
Commercial \| Commercial Portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	5,843	8,489
Total Past Due	14,839	15,087
Current	1,037,268	790,940
Loans and Leases Receivable, Gross, Total	1,052,107	806,027
Commercial \| Commercial Portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	5,910	4,013
Commercial \| Commercial Portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	3,086	2,581
Commercial \| Commercial Portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		4
Commercial real estate \| Commercial Portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,526,504	1,639,155
Commercial real estate \| Commercial Portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	21,742	21,494
Total Past Due	25,036	24,255
Current	1,481,361	1,595,648
Loans and Leases Receivable, Gross, Total	1,506,397	1,619,903
Commercial real estate \| Commercial Portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	2,895	1,667
Commercial real estate \| Commercial Portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	399	945
Commercial real estate \| Commercial Portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		149
Construction and land development \| Commercial Portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	208,733	232,229
Construction and land development \| Commercial Portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,304	1,171
Total Past Due	2,915	2,245
Current	200,141	221,653
Loans and Leases Receivable, Gross, Total	203,056	223,898
Construction and land development \| Commercial Portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,539	989
Construction and land development \| Commercial Portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	72
Construction and land development \| Commercial Portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		85
Residential real estate \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	568,291	578,048
Residential real estate \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	7,796	5,894
Total Past Due	10,090	8,480
Current	545,564	560,809
Loans and Leases Receivable, Gross, Total	555,654	569,289
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	9,024	7,270
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	588	1,292
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	1,561	728
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	145	566
Consumer loans held for sale \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	710,116	613,184
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	341	388
Total Past Due	11,196	8,183
Current	697,708	603,225
Loans and Leases Receivable, Gross, Total	708,904	611,408
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	376	569
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	6,701	5,211
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	4,154	2,533
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		51
Lease financing \| Other loan portfolio
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	332,581	264,051
Lease financing \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,375	751
Total Past Due	4,564	6,211
Current	328,017	257,840
Loans and Leases Receivable, Gross, Total	332,581	264,051
Lease financing \| Other loan portfolio \| Non-PCI loans \| Impaired
Aging Status of recorded investment
Loans and Leases Receivable, Gross, Total	1,593	957
Lease financing \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,783	4,322
Lease financing \| Other loan portfolio \| Non-PCI loans \| 60-89 Days Past Due
Aging Status of recorded investment
Past Due	1,188	932
Lease financing \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	$ 218	$ 206

LOANS - TDRs by portfolio (Details) - USD ($)	12 Months Ended
LOANS - TDRs by portfolio (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Troubled debt restructuring
Allowance for loan losses on TDRs	$ 2,000,000.0	$ 557,000
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	3,318,000	3,651,000
TDR's Nonaccrual	12,418,000	10,362,000
Total	15,736,000	14,013,000
Commercial \| Commercial Portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	435,000	435,000
TDR's Nonaccrual	369,000	406,000
Total	804,000	841,000
Commercial real estate \| Commercial Portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	1,720,000	2,225,000
TDR's Nonaccrual	9,834,000	9,103,000
Total	11,554,000	11,328,000
Construction and land development \| Commercial Portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	45,000	51,000
TDR's Nonaccrual	167,000
Total	212,000	51,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	1,083,000	810,000
TDR's Nonaccrual	1,993,000	853,000
Total	3,076,000	1,663,000
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	35,000	130,000
Total	35,000	$ 130,000
Lease financing \| Other loan portfolio \| Non-PCI loans
TDRs by loan portfolio (excluding PCI loans):
TDR's Nonaccrual	55,000
Total	$ 55,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) loan	Dec. 31, 2017 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan	37	36	6
Pre-modification outstanding balance	$ 3,897	$ 2,832	$ 1,213
Post-modification outstanding balance	$ 3,140	$ 2,799	$ 1,130
Commercial \| Commercial Portfolio
Troubled debt restructurings:
Number of loans \| loan	1	2	1
Pre-modification outstanding balance	$ 249	$ 423	$ 362
Post-modification outstanding balance	$ 249	$ 408	$ 299
Commercial real estate \| Commercial Portfolio
Troubled debt restructurings:
Number of loans \| loan	3	2	1
Pre-modification outstanding balance	$ 1,924	$ 1,571	$ 323
Post-modification outstanding balance	$ 1,322	$ 1,565	$ 323
Construction and land development \| Commercial Portfolio
Troubled debt restructurings:
Number of loans \| loan	2
Pre-modification outstanding balance	$ 221
Post-modification outstanding balance	$ 167
Residential real estate \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	25	7	4
Pre-modification outstanding balance	$ 1,422	$ 708	$ 528
Post-modification outstanding balance	$ 1,322	$ 696	$ 508
Consumer loans held for sale \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	5	25
Pre-modification outstanding balance	$ 26	$ 130
Post-modification outstanding balance	$ 25	$ 130
Lease financing \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	1
Pre-modification outstanding balance	$ 55
Post-modification outstanding balance	$ 55

LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Summary of loans
Accretion recorded as loan interest income	$ 43,382	$ 45,089	$ 42,001	$ 42,358	$ 45,068	$ 42,978	$ 46,432	$ 36,179	$ 172,830	$ 170,657	$ 120,106
Changes in the accretable yield for PCI loans
Accretion									(6,400)	(6,100)	(5,500)
PCI loans
Changes in the accretable yield for PCI loans
Balance, beginning of period				$ 12,240				$ 5,732	12,240	5,732	9,035
Accretion									(6,423)	(6,092)	(5,546)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)									3,785	2,682	120
Reclassification from non-accretable									2,038	3,823	194
Balance, end of period	$ 12,067				$ 12,240				12,067	12,240	5,732
Alpine Bank \| PCI loans
Changes in the accretable yield for PCI loans
New loans purchased										$ 6,095
HomeStar Bank \| PCI loans
Changes in the accretable yield for PCI loans
New loans purchased									$ 427
Centrue \| PCI loans
Changes in the accretable yield for PCI loans
New loans purchased											$ 1,929

LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Changes in allowance for loan losses :
Beginning balance				$ 20,903				$ 16,431	$ 20,903	$ 16,431	$ 14,862
Provision for loan losses	$ 5,305	$ 4,361	$ 4,076	$ 3,243	$ 3,467	$ 2,103	$ 1,854	$ 2,006	16,985	9,430	9,556
Allowance for Loan and Lease Losses Write-offs, Net [Abstract]
Loan charge-offs									(12,068)	(6,989)	(9,822)
Loan recoveries									2,208	2,031	1,835
Ending balance	$ 28,028				$ 20,903				$ 28,028	$ 20,903	$ 16,431

LOANS - Allowance for loan losses by loan portfolio and recorded investment (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018
Changes in allowance for loan losses :
Beginning balance				$ 20,903				$ 16,431	$ 20,903	$ 16,431	$ 14,862
Provision for loan losses	$ 5,305	$ 4,361	$ 4,076	3,243	$ 3,467	$ 2,103	$ 1,854	2,006	16,985	9,430	9,556
Charge-offs									(12,068)	(6,989)	(9,822)
Recoveries									2,208	2,031	1,835
Ending balance	28,028				20,903				28,028	20,903	16,431
Allowance for loan losses:
Loans individually evaluated for impairment												$ 9,977	$ 5,492
Loans collectively evaluated for impairment												788	493
Non-impaired loans collectively evaluated for impairment												16,080	13,350
Loans acquired with deteriorated credit quality (1)												1,183	1,568
Total	28,028			20,903	20,903			16,431	20,903	16,431	14,862	28,028	20,903
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												35,736	37,802
Impaired loans collectively evaluated for impairment												6,346	5,097
Non-impaired loans collectively evaluated for impairment												4,316,617	4,051,677
Loans acquired with deteriorated credit quality (1)												42,711	42,975
Loans and Leases Receivable, Gross, Total												4,401,410	4,137,551
PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												42,711	42,975
Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												4,358,699	4,094,576
Commercial Portfolio
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												2,790,422	2,682,268
Commercial Portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												28,862	32,440
Commercial Portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												2,761,560	2,649,828
Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												1,597,139	1,444,748
Commercial \| Commercial Portfolio
Changes in allowance for loan losses :
Beginning balance				9,524					9,524
Ending balance	10,031				9,524				10,031	9,524
Allowance for loan losses:
Loans individually evaluated for impairment												3,563	4,405
Loans collectively evaluated for impairment												69	43
Non-impaired loans collectively evaluated for impairment												6,380	4,971
Loans acquired with deteriorated credit quality (1)												19	105
Total	10,031			9,524	9,524				9,524	9,524		10,031	9,524
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												5,767	8,520
Impaired loans collectively evaluated for impairment												511	408
Non-impaired loans collectively evaluated for impairment												1,045,829	797,099
Loans acquired with deteriorated credit quality (1)												3,078	4,857
Loans and Leases Receivable, Gross, Total												1,055,185	810,884
Commercial \| Commercial Portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												3,078	4,857
Commercial \| Commercial Portfolio \| Non-PCI loans
Changes in allowance for loan losses :
Beginning balance				9,524				5,256	9,524	5,256	5,920
Provision for loan losses									3,852	4,941	(118)
Charge-offs									(3,412)	(1,236)	(737)
Recoveries									67	563	191
Ending balance	10,031				9,524				10,031	9,524	5,256
Allowance for loan losses:
Total	10,031			9,524	9,524			5,256	10,031	5,256	5,920	10,031	9,524
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												1,052,107	806,027
Commercial real estate \| Commercial Portfolio
Changes in allowance for loan losses :
Beginning balance				4,723					4,723
Ending balance	10,272				4,723				10,272	4,723
Allowance for loan losses:
Loans individually evaluated for impairment												5,968	476
Loans collectively evaluated for impairment												100	47
Non-impaired loans collectively evaluated for impairment												3,643	3,356
Loans acquired with deteriorated credit quality (1)												561	844
Total	10,272			4,723	4,723				4,723	4,723		10,272	4,723
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												22,698	23,431
Impaired loans collectively evaluated for impairment												764	437
Non-impaired loans collectively evaluated for impairment												1,482,935	1,596,035
Loans acquired with deteriorated credit quality (1)												20,107	19,252
Loans and Leases Receivable, Gross, Total												1,526,504	1,639,155
Commercial real estate \| Commercial Portfolio \| PCI loans
Changes in allowance for loan losses :
Beginning balance				4,723				5,044	4,723	5,044	3,225
Provision for loan losses									7,939	(207)	7,879
Charge-offs									(3,339)	(492)	(6,552)
Recoveries									949	378	492
Ending balance	10,272				4,723				10,272	4,723	5,044
Allowance for loan losses:
Total	10,272			4,723	4,723			5,044	10,272	5,044	3,225	10,272	4,723
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												20,107	19,252
Commercial real estate \| Commercial Portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												1,506,397	1,619,903
Construction and land development \| Commercial Portfolio
Changes in allowance for loan losses :
Beginning balance				372				518	372	518	345
Provision for loan losses									(53)	(227)	110
Charge-offs									(44)
Recoveries									15	81	63
Ending balance	290				372				290	372	518
Allowance for loan losses:
Loans individually evaluated for impairment													48
Loans collectively evaluated for impairment												14	6
Non-impaired loans collectively evaluated for impairment												272	318
Loans acquired with deteriorated credit quality (1)												4
Total	290			372	372			518	290	518	345	290	372
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												1,245	1,249
Impaired loans collectively evaluated for impairment												104	58
Non-impaired loans collectively evaluated for impairment												201,707	222,591
Loans acquired with deteriorated credit quality (1)												5,677	8,331
Loans and Leases Receivable, Gross, Total												208,733	232,229
Construction and land development \| Commercial Portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												5,677	8,331
Construction and land development \| Commercial Portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												203,056	223,898
Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				2,041					2,041
Ending balance	2,499				2,041				2,499	2,041
Allowance for loan losses:
Loans individually evaluated for impairment												290	233
Loans collectively evaluated for impairment												444	321
Non-impaired loans collectively evaluated for impairment												1,269	1,051
Loans acquired with deteriorated credit quality (1)												496	436
Total	2,499			2,041	2,041				2,041	2,041		2,499	2,041
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												5,329	3,929
Impaired loans collectively evaluated for impairment												3,695	3,341
Non-impaired loans collectively evaluated for impairment												546,630	562,019
Loans acquired with deteriorated credit quality (1)												12,637	8,759
Loans and Leases Receivable, Gross, Total												568,291	578,048
Residential real estate \| Other loan portfolio \| PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												12,637	8,759
Residential real estate \| Other loan portfolio \| Non-PCI loans
Changes in allowance for loan losses :
Beginning balance				2,041				2,750	2,041	2,750	2,929
Provision for loan losses									1,392	(517)	1
Charge-offs									(1,076)	(361)	(698)
Recoveries									142	169	518
Ending balance	2,499				2,041				2,499	2,041	2,750
Allowance for loan losses:
Total	2,499			2,041	2,041			2,750	2,499	2,750	2,929	2,499	2,041
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												555,654	569,289
Consumer loans held for sale \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				2,154					2,154
Ending balance	2,642				2,154				2,642	2,154
Allowance for loan losses:
Loans collectively evaluated for impairment												39	45
Non-impaired loans collectively evaluated for impairment												2,500	1,926
Loans acquired with deteriorated credit quality (1)												103	183
Total	2,642			2,154	2,154				2,154	2,154		2,642	2,154
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment													5
Impaired loans collectively evaluated for impairment												376	564
Non-impaired loans collectively evaluated for impairment												708,528	610,839
Loans acquired with deteriorated credit quality (1)												1,212	1,776
Loans and Leases Receivable, Gross, Total												710,116	613,184
Consumer loans held for sale \| Other loan portfolio \| PCI loans
Changes in allowance for loan losses :
Beginning balance				2,154				1,344	2,154	1,344	930
Provision for loan losses									1,767	2,156	954
Charge-offs									(1,946)	(1,876)	(794)
Recoveries									667	530	254
Ending balance	2,642				2,154				2,642	2,154	1,344
Allowance for loan losses:
Total	2,642			2,154	2,154			1,344	2,642	1,344	930	2,642	2,154
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												1,212	1,776
Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												708,904	611,408
Lease financing \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				2,089				1,519	2,089	1,519	1,513
Provision for loan losses									2,088	3,284	730
Charge-offs									(2,251)	(3,024)	(1,041)
Recoveries									368	310	317
Ending balance	2,294				2,089				2,294	2,089	1,519
Allowance for loan losses:
Loans individually evaluated for impairment												156	330
Loans collectively evaluated for impairment												122	31
Non-impaired loans collectively evaluated for impairment												2,016	1,728
Total	$ 2,294			$ 2,089	$ 2,089			$ 1,519	$ 2,294	$ 1,519	$ 1,513	2,294	2,089
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment												697	668
Impaired loans collectively evaluated for impairment												896	289
Non-impaired loans collectively evaluated for impairment												330,988	263,094
Loans and Leases Receivable, Gross, Total												332,581	264,051
Lease financing \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												332,581	264,051
Performing \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												1,586,146	1,435,952
Performing \| Residential real estate \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												546,630	562,019
Performing \| Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												708,528	610,839
Performing \| Lease financing \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												330,988	263,094
Impaired \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												10,993	8,796
Impaired \| Residential real estate \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												9,024	7,270
Impaired \| Consumer loans held for sale \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												376	569
Impaired \| Lease financing \| Other loan portfolio \| Non-PCI loans
Recorded investment (loan balance):
Loans and Leases Receivable, Gross, Total												$ 1,593	$ 957

PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	12 Months Ended
PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2020 facility	Sep. 30, 2019 facility
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 128,265	$ 126,230
Accumulated depreciation	(37,210)	(31,390)
Premises and equipment, net	91,055	94,840
Depreciation	6,583	6,166	$ 5,014
Number of banking facilities to be closed \| facility					1
Number of banking facilities to be consolidated to HomeStar \| facility					2
Number of banking facilities to be consolidated in other areas \| facility					3
Asset impairment charges	3,200
Assets held for sale	4,000	1,700
Forecast
Property, Plant and Equipment [Line Items]
Number of banking facilities to be closed \| facility				2
Land
Property, Plant and Equipment [Line Items]
Premises and equipment gross	19,123	20,231
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment gross	77,296	76,141
Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 31,846	$ 29,858

LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
LEASES
Renewal term of lease	5 years
Operating lease right-of-use assets	$ 14,224
Operating lease liabilities	15,369
Net rent expense under operating leases	2,700	$ 3,200	$ 2,700
Operating lease cost	2,752
Operating cash flows related to leases	3,241
Right-of-use assets obtained in exchange for lease obligations	$ 18,482
Weighted average remaining lease term	8 years 3 days
Weighted average discount rate	2.98%
Projected minimum rental payments
2020	$ 2,814
2021	2,854
2022	2,677
2023	2,120
2024	1,340
Thereafter	5,588
Total future minimum lease payments	17,393
Less imputed interest	(2,024)
Total operating lease liabilities	$ 15,369
Minimum
LEASES
Remaining lease terms	2 months
Maximum
LEASES
Remaining lease terms	13 years

LOAN SERVICING RIGHTS (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Commercial FHA Mortgage Loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	$ 4,080.0	$ 3,980.0
Residential mortgage loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	$ 381.6	$ 897.6

LOAN SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Mortgage servicing rights:
Balance, beginning of period	$ 56,252	$ 55,714	$ 52,006
Balance, end of period	57,637	56,252	55,714
Valuation allowances:
Balance, beginning of period	2,805	3,254	1,712
Additions	2,698	931	1,542
Reductions	(559)	(1,380)
Balance, end of period	4,944	2,805	3,254
Mortgage servicing rights, net	52,693	53,447	52,460
Fair Value	52,693	53,447	52,460	$ 50,294
Loss on mortgage servicing rights held for sale	490	(458)	(4,059)
Loan servicing rights	53,824	53,447
Mortgage servicing rights held for sale	1,972	3,545
Commercial FHA Mortgage Loans
Mortgage servicing rights:
Originated servicing	4,124	3,174	6,287
Amortization	(2,739)	(2,636)	(2,579)
Valuation allowances:
Mortgage Loans Serviced For Others	4,080,000	3,980,000
Residential mortgage loans
Valuation allowances:
Loss on mortgage servicing rights held for sale			4,100
Sale of mortgage servicing rights held for sale	3,300	10,200	$ 0
Mortgage Loans Serviced For Others	381,600	$ 897,600
Mortgage servicing rights held for sale	2,000
SBA servicing rights
Valuation allowances:
Mortgage Loans Serviced For Others	48,200
Loan servicing rights	$ 1,100

LOAN SERVICING RIGHTS - Summary of key assumptions (Details) - Commercial FHA Mortgage Loans - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Assumptions Used to Estimate Fair Value
Servicing Fee	0.12%	0.13%
Interest Rate	3.68%	3.67%
Remaining Years to Maturity	29 years 10 months 24 days	30 years 1 month 6 days
Prepayment Rate	8.20%	8.24%
Servicing Cost	$ 1,000	$ 1,000
Maximum
Assumptions Used to Estimate Fair Value
Discount Rate		14.00%
Minimum
Assumptions Used to Estimate Fair Value
Discount Rate	10.00%	10.00%

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Jul. 17, 2019	Dec. 31, 2018	Jun. 30, 2018
Goodwill [Line Items]
Goodwill		$ 171,758		$ 164,673
Goodwill, Impairment Loss	$ 0
Alpine Bank
Goodwill [Line Items]
Goodwill					$ 65,964
Centrue
Goodwill [Line Items]
Goodwill					$ 47,444
HomeStar Bank
Goodwill [Line Items]
Goodwill			$ 7,085
Amount of increase in goodwill		7,100
Banking
Goodwill [Line Items]
Goodwill		156,120		149,035
Commercial FHA origination and servicing
Goodwill [Line Items]
Goodwill		10,892		10,892
Wealth management
Goodwill [Line Items]
Goodwill		$ 4,746		$ 4,746

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($)			12 Months Ended
	Jul. 17, 2019	Jun. 30, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite-lived intangible assets
Gross Carrying Amount			$ 71,083,000	$ 66,483,000
Accumulated Amortization			(36,197,000)	(29,107,000)
Total			34,886,000	37,376,000
Amortization of intangible assets			7,090,000	6,956,000	$ 3,325,000
Estimated amortization expense of intangible assets
2020			6,504,000
2021			5,675,000
2022			4,900,000
2023			4,125,000
2024			3,563,000
Thereafter			10,119,000
Core deposits
Finite-lived intangible assets
Gross Carrying Amount			57,012,000	52,712,000
Accumulated Amortization			(30,674,000)	(24,803,000)
Total			26,338,000	27,909,000
Customer relationship
Finite-lived intangible assets
Gross Carrying Amount			14,071,000	13,771,000
Accumulated Amortization			(5,523,000)	(4,304,000)
Total			$ 8,548,000	$ 9,467,000
Alpine Bank
Finite-lived intangible assets
Total intangible assets		$ 27,400,000
Alpine Bank \| Core deposits
Finite-lived intangible assets
Total intangible assets		21,100,000
Alpine Bank \| Customer relationship
Finite-lived intangible assets
Total intangible assets		$ 6,300,000
HomeStar Bank
Finite-lived intangible assets
Total intangible assets	$ 4,600,000
HomeStar Bank \| Core deposits
Finite-lived intangible assets
Total intangible assets	$ 4,300,000
Amortization period	12 years
HomeStar Bank \| Customer relationship
Finite-lived intangible assets
Total intangible assets	$ 300,000
Amortization period	6 years

DERIVATIVE INSTRUMENTS (Details) - USD ($)	12 Months Ended
DERIVATIVE INSTRUMENTS (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	$ 443,706,000	$ 541,581,000
Fair value of asset derivatives	3,350,000	4,492,000
Net gains (losses) recognized on derivative instruments	1,100,000	2,000,000.0	$ 16,000
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	222,654,000	264,710,000
Fair value of asset derivatives	3,350,000	4,492,000
Forward commitments to sell mortgage-backed securities
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	221,052,000	276,871,000
Notional amount, liability derivatives		54,000
Interest rate swap contracts
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount of interest rate swaps	9,000,000.0	9,500,000
Interest rate swap contracts \| Other assets
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Fair value of asset derivatives	$ 306,000	$ 306,000

DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative disclosures
Fair value of asset derivatives	$ 3,350,000	$ 4,492,000
LIBOR
Derivative disclosures
Variable interest rate (as a percent)	4.35%
Interest rate swap contracts
Derivative disclosures
Notional amount of interest rate swaps	$ 9,000,000.0	9,500,000
Interest rate swap contracts \| Other assets
Derivative disclosures
Fair value of asset derivatives	306,000	306,000
Interest rate swap contracts \| Other liabilities.
Derivative disclosures
Fair value of liability derivatives	$ 145,000	$ 145,000

DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Classification of deposits
Noninterest-bearing demand	$ 1,019,472	$ 972,164
Interest-bearing:
Checking	1,342,788	1,002,275
Money market	787,662	862,171
Savings	522,456	442,132
Time	871,876	795,428
Total deposits	4,544,254	4,074,170
Time deposits 250000 or more	122,700	76,000
Brokered certificate of deposit	49,700	161,600
Schedule of maturities of time deposits
2020	507,606
2021	306,376
2022	32,304
2023	18,204
2024	7,367
Thereafter	19
Total	871,876
Investment Securities
Interest-bearing:
Amounts pledged for public deposits	234,100	182,400
Standby Letters of Credit
Interest-bearing:
Amounts pledged for public deposits	$ 80,000	$ 120,000

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Short-term Debt [Line Items]
Outstanding at period-end	$ 82,029	$ 124,235
Average amount outstanding	121,168	138,135
Maximum amount outstanding at any month end	$ 138,907	$ 173,387
Weighted average interest rate:
During period	0.69%	0.51%
End of period	0.67%	0.71%
Short-Term Borrowings
Investment securities pledged/collateralized for secured borrowings	$ 87,400	$ 132,200
Line of credit	0	0
Federal funds lines of credit	20,000
Commercial real estate
Short-Term Borrowings
Loans and Leases Receivable, Gross, Carrying Amount, Commercial	24,300	67,600
Federal Reserve Discount Window
Short-Term Borrowings
Line of credit	$ 21,600	$ 56,800

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	May 31, 2017
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 493,311	$ 640,631
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued		2,636
Preferred stock, par value	$ 2	$ 2
Line of Credit Facility, Maximum Borrowing Capacity	$ 20,000
FHLB advances, collateral for mortgage and home equity line of credit loans	$ 1,940,000	$ 2,220,000
Revolving Credit Facility [Member] \| Maximum
Federal Home Loan Bank Advances, Interest Rate Information
Line of Credit Facility, Maximum Borrowing Capacity			$ 10,000
Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Face Amount			$ 40,000
LIBOR
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate	4.35%
Series G Preferred Stock
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued	181	181
Preferred stock, par value	$ 1,000	$ 1,000
Midland States Bancorp, Inc \| Term loan
FHLB ADVANCES AND OTHER BORROWINGS
Long term debt		$ 32,840
Midland States Bancorp, Inc \| LIBOR \| Term loan
Federal Home Loan Bank Advances, Interest Rate Information
Basis spread on variable rate		2.25%
Interest rate during the period		4.63%
Midland States Bancorp, Inc \| Series G Preferred Stock
FHLB ADVANCES AND OTHER BORROWINGS
Long term debt	$ 181	$ 181
Midland States Bank \| Fixed Rate Term Loan
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	493,130	607,610
Midland States Bank \| Fixed rate, fixed term maturing through June 2023
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 28,000	$ 87,700
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate	2.56%	2.35%
Midland States Bank \| Putable fixed rate loan maturing through August 2025
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 465,000	$ 520,000
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate	2.34%	2.09%

FHLB ADVANCES AND OTHER BORROWINGS - Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
2020	$ 3,897
2021	8,385
2022	65,754
2023	235,094
2024	100,000
Thereafter	80,181
Total	$ 493,311	$ 640,631

SUBORDINATED DEBT (Details) $ in Thousands			1 Months Ended	3 Months Ended	12 Months Ended
SUBORDINATED DEBT (Details) $ in Thousands	Sep. 20, 2019 USD ($) tranche	Oct. 13, 2017 USD ($)	Jun. 30, 2015 USD ($) tranche	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	May 31, 2017 USD ($)
Subordinated Borrowing [Line Items]
Carrying amount				$ 176,653	$ 176,653	$ 94,134
Duration with fixed interest rate					5 years
Number of tranches \| tranche	2		2
Common stock				$ 244	$ 244	238
Repayments of Subordinated Debt					$ 17,765
LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)					4.35%
Subordinate debt
Subordinated Borrowing [Line Items]
Debt issuance costs	$ 1,600	$ 600	$ 900
Subordinate debt, $40,325 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.00%	6.00%
Carrying amount				$ 38,273	$ 38,273	39,871
Variable rate basis					three month LIBOR
Face Amount				38,325	$ 38,325	40,325
Repurchase of debt				2,000	$ 2,000
Losses from debt repurchase				$ 1,400
Subordinate debt, $40,325 maturing June 18, 2025 \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)					4.35%
Subordinate debt, $15,000 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.50%	6.50%
Carrying amount				$ 544	$ 544	14,831
Face Amount				550	550	15,000
Repurchase of debt				14,500	$ 14,500
Losses from debt repurchase				$ 400
Subordinated debt $40,000 maturing October 15, 2027
Subordinated Borrowing [Line Items]
Fixed interest rate				6.25%	6.25%
Carrying amount				$ 39,496	$ 39,496	$ 39,432
Duration with fixed interest rate					5 years
Variable rate basis					three month LIBOR
Face Amount				$ 40,000	$ 40,000
Subordinated debt $40,000 maturing October 15, 2027 \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)		4.229%			4.23%
Subordinate debt, $72,750 maturing September 30, 2029
Subordinated Borrowing [Line Items]
Fixed interest rate				5.00%	5.00%
Carrying amount				$ 71,549	$ 71,549
Duration with fixed interest rate					5 years
Variable rate basis					three month SOFR
Face Amount				$ 72,750	$ 72,750
Subordinate debt, $72,750 maturing September 30, 2029 \| Three month SOFR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)					3.61%
Subordinate debt, $27,250 maturing September 30, 2034
Subordinated Borrowing [Line Items]
Fixed interest rate				5.50%	5.50%
Carrying amount				$ 26,791	$ 26,791
Duration with fixed interest rate					10 years
Variable rate basis					three month SOFR
Face Amount				$ 27,250	$ 27,250
Subordinate debt, $27,250 maturing September 30, 2034 \| Three month SOFR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)					4.045%
Term loan
Subordinated Borrowing [Line Items]
Face Amount							$ 40,000
Private Placement \| Subordinate debt
Subordinated Borrowing [Line Items]
Face Amount	$ 100,000	$ 40,000	$ 55,300

TRUST PREFERRED DEBENTURES (Details) - USD ($)	12 Months Ended
TRUST PREFERRED DEBENTURES (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Jun. 09, 2017	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	$ 48,288,000	$ 47,794,000
LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	4.35%
Centrue
TRUST PREFERRED DEBENTURES
Liquidation amount per security								$ 1,000
Book value of subordinated debentures			$ 10,300,000
Fair value of subordinated debentures			$ 7,600,000
Number of preferred securities issued								10,000
Grant Park Trust
TRUST PREFERRED DEBENTURES
Liquidation amount per security										$ 1,000
Book value of subordinated debentures					$ 3,100,000
Fair value of subordinated debentures					$ 1,800,000
Number of preferred securities issued										3,000
Midland Trust
TRUST PREFERRED DEBENTURES
Pool issued									$ 10,000,000.0
Liquidation amount per security									$ 1,000
LSHC Trust III
TRUST PREFERRED DEBENTURES
Liquidation amount per security							$ 1,000
Book value of subordinated debentures				$ 41,200,000
Fair value of subordinated debentures				$ 26,100,000
Number of preferred securities issued							20,000
LSHC Trust IV
TRUST PREFERRED DEBENTURES
Liquidation amount per security						$ 1,000
Number of preferred securities issued						20,000
Trust preferred debentures maturing April 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 10,274,000	$ 10,272,000
Trust preferred debentures maturing April 23, 2034 \| Midland Trust
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)	4.68%	5.23%
Face Amount								$ 10,310,000	$ 10,300,000
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 January 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 2,263,000	$ 2,209,000
Trust preferred debentures maturing January 23, 2034 \| Grant Park Trust
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)	4.79%	5.37%
Face Amount								3,093,000		$ 3,100,000
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 December 31, 2036
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 14,251,000	$ 14,074,000
Trust preferred debentures maturing December 31, 2036 \| LSHC Trust III
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)	3.64%	4.54%
Face Amount							$ 20,600,000	20,619,000
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	$ 13,428,000	$ 13,249,000
Trust preferred debentures maturing September 6, 2037 \| LSHC Trust IV
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)	3.36%	4.21%
Face Amount						$ 20,600,000		20,619,000
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 June 17, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 8,072,000	$ 7,990,000
Trust Preferred Debentures Maturing June 17, 2034 \| Centrue Bank
TRUST PREFERRED DEBENTURES
Interest rate (as a percent)	4.55%	5.44%
Face Amount								10,310,000
Trust Preferred Debentures Maturing June 17, 2034 \| Centrue Bank \| LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	2.65%
Other assets \| Grant Park Trust
TRUST PREFERRED DEBENTURES
Investment in common stock										$ 93,000
Other assets \| Midland Trust
TRUST PREFERRED DEBENTURES
Investment in common stock									$ 310,000
Other assets \| LSHC Trust IV
TRUST PREFERRED DEBENTURES
Investment in common stock						$ 1,200,000
Other assets \| Centrue Bank
TRUST PREFERRED DEBENTURES
Investment in common stock								$ 310,000

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Federal:
Current									$ 2,318	$ 55	$ (696)
Deferred									8,287	6,748	11,632
State:
Current									1,761	807	(921)
Deferred									4,321	3,774	400
Total income tax expense	$ 3,279	$ 4,015	$ 5,039	$ 4,354	$ 4,527	$ 2,436	$ 3,045	$ 1,376	$ 16,687	$ 11,384	$ 10,415
Effective tax rate									21.00%		35.00%

INCOME TAXES - Statutory federal rate (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
INCOME TAXES
Expected income taxes									$ 15,218	$ 10,665	$ 9,244
Less income tax effect of:
Tax exempt interest, net									(1,362)	(1,441)	(1,635)
State tax, net of federal benefit									4,805	4,028	(110)
Increase in cash surrender value of life insurance policies									(764)	(854)	(969)
Equity-based compensation benefit									(484)	(62)	(1,297)
Non-deductible transaction costs									110	71	389
Valuation allowance									62	(409)	(229)
Effect of federal rate change enacted in 2017											4,540
Other									(898)	(614)	482
Actual income tax expense	$ 3,279	$ 4,015	$ 5,039	$ 4,354	$ 4,527	$ 2,436	$ 3,045	$ 1,376	$ 16,687	$ 11,384	$ 10,415

INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($)		12 Months Ended
	Dec. 22, 2017	Dec. 31, 2019	Dec. 31, 2018
Assets:
Allowance for loan losses		$ 7,708,000	$ 5,748,000
Deferred compensation		2,332,000	2,158,000
Loans		5,386,000	6,579,000
Write-down of other real estate owned		469,000	563,000
Tax credits		1,049,000	1,041,000
Nonaccrual interest		782,000	730,000
Unrealized loss on securities			802,000
Stock compensation		588,000	700,000
Net operating losses		15,510,000	17,417,000
Accrued litigation			179,000
Allowance for repurchase reserves			135,000
Allowance for unfunded commitments			319,000
Fair value adjustment on investments		1,217,000	1,330,000
Charitable Contributions			202,000
Operating lease liabilities		4,227,000
Other, net		1,122,000	720,000
Deferred tax assets		40,390,000	38,623,000
Valuation allowance		(62,000)
Deferred tax assets, net of valuation allowance		40,328,000	38,623,000
Liabilities:
Premises and equipment		1,735,000	3,522,000
Unrealized gain on securities		2,846,000
Mortgage servicing rights		11,436,000	11,460,000
Fair value adjustment on trust preferred debentures		4,560,000	4,694,000
Federal Home Loan Bank stock dividends			391,000
Deferred loan costs, net of fees		3,539,000	1,495,000
Intangible assets		8,380,000	8,741,000
Accounting method changes			74,000
Prepaid expenses		708,000	708,000
Software development costs		1,638,000	1,667,000
Leased equipment		12,313,000	4,351,000
Operating lease right-of-use assets		3,912,000
Other, net		539,000	269,000
Deferred tax liabilities		51,606,000	37,372,000
Deferred tax (liabilities) assets, net		(11,278,000)
Deferred tax (liabilities) assets, net			1,251,000
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
Valuation allowance		62,000
Federal
Assets:
Net operating losses		58,800,000
Liabilities:
Tax credit carryforward		1,600,000
State
Liabilities:
Tax credit carryforward		$ 1,300,000
Period for tax credit carryforward.		5 years
State \| Illinois
Liabilities:
Post-apportioned operating loss carryforward		$ 41,500,000
State \| Missouri
Liabilities:
Pre-apportioned operating loss carryforward		$ 58,800,000

RETIREMENT PLANS (Details) - USD ($)		12 Months Ended
RETIREMENT PLANS (Details) - USD ($)	May 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jul. 01, 2019
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		$ 1,700,000	1,800,000	1,200,000
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		845,000	754,000	659,000
Deferred compensation arrangement, distributions		122,000	356,000	100,000
Former Chief Executive Officer \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability			282,000	$ 210,000
Deferred compensation arrangement, supplement retirement paid		298,000
Deferred compensation arrangement, supplement retirement payments in 2020		238,400
Deferred compensation arrangement, supplement retirement payments in 2021		178,800
Other Postretirement Benefit Plan [Member]
Deferred Compensation Arrangements [Abstract]
Funded status of the plan (market value of assets divided by funding target)					119.55%
Defined benefit plan, minimum required contribution, administrative expense		128,000	122,000
Other liabilities. \| Director \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability		$ 5,000,000.0	$ 4,200,000
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%

SHARE-BASED COMPENSATION - Restricted stock awards (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019
Weighted average grant date fair value
Total unrecognized compensation (in years)	3 years 1 month 6 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)	129,717	138,683
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 28.47	$ 31.03
Nonvested at December 31, 2016 (in dollars per shares)	27.67	28.47	$ 31.03
Total unrecognized compensation				$ 6.6
Weighted average grant date fair value for restricted stock awards	$ 28.47	$ 31.03	$ 31.03	$ 27.67
Compensation cost that has been charged against income	$ 2.0	$ 1.8	$ 1.8
Restricted Stock And Restricted Stock Unit Awards [Member]
Number outstanding
Nonvested at December 31, 2015 (in shares)	197,717
Granted during the year (in shares)	129,717
Vested during the year (in shares)	(57,652)
Forfeited during the year (in shares)	(15,725)
Nonvested at December 31, 2016 (in shares)	254,057	197,717
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 28.61
Granted during the year (in dollars per shares)	27.67
Vested during the year (in dollars per shares)	28.32
Forfeited during the year (in dollars per shares)	27.88
Nonvested at December 31, 2016 (in dollars per shares)	28.24	$ 28.61
Weighted average grant date fair value for restricted stock awards	$ 28.24	$ 28.61		$ 28.24

SHARE-BASED COMPENSATION - Grant date using the Black Scholes (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2019
2010 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued		2,000,000
2019 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued		1,000,000
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%
Expected volatility	16.63%
Risk free interest rate	2.12%
Expected life	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

SHARE-BASED COMPENSATION - stock option plan (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Weighted average exercise price
Total unrecognized compensation (in years)	3 years 1 month 6 days
Stock option
Number of shares
Options outstanding, beginning of year (in shares)	1,006,144	1,148,537
Options exercised (in shares)	(360,776)	(108,344)
Options forfeited (in shares)	(22,246)	(34,049)
Options outstanding, end of year (in shares)	623,122	1,006,144	1,148,537
Options exercisable (in shares)	586,081	885,817
Options vested and expected to vest (in shares)	619,032	991,774
Weighted average exercise price
Options outstanding, beginning of year (in dollars per share)	$ 19.48	$ 19.39
Options exercised (in dollars per share)	16.46	16.42
Options forfeited (in dollars per share)	30.68	26.27
Options outstanding, end of year (in dollars per share)	20.83	19.48	$ 19.39
Options exercisable (in dollars per share)	20.40	18.53
Options vested and expected to vest (in dollars per share)	$ 20.79	$ 19.38
Options outstanding, end of year (in years)	4 years 9 months 18 days	4 years 10 months 24 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)	4 years 9 months 18 days	4 years 10 months 24 days
Aggregate intrinsic value of options outstanding	$ 5,000,000.0
Aggregate intrinsic value of options exercisable	5,000,000
Total unrecognized compensation	$ 88,000
Total unrecognized compensation (in years)	10 months
Weighted average fair value of options granted			$ 4.33
Total intrinsic value from options exercised	$ 3,600,000	$ 1,600,000	$ 2,300,000
Cash received from options exercised	$ 5,900,000	$ 1,800,000	$ 2,900,000

SHARE-BASED COMPENSATION - Nonvested stock option (Details) - Stock option	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of shares
Nonvested at December 31, 2015 (in shares) \| shares	120,327
Vested (in shares) \| shares	(66,924)
Forfeited (in shares) \| shares	(16,362)
Nonvested at December 31, 2016 (in shares) \| shares	37,041
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares) \| $ / shares	$ 3.11
Vested (in dollars per shares) \| $ / shares	2.84
Forfeited (in dollars per shares) \| $ / shares	3.88
Nonvested at December 31, 2016 (in dollars per shares) \| $ / shares	$ 3.26

PREFERRED STOCK (Details) - $ / shares	Jun. 09, 2017	Jul. 29, 2019
Series G Preferred Stock
Dividend rate, per-dollar-amount	$ 60.00
Series H preferred stock
Redemption price per share		$ 1,000

EARNINGS PER SHARE (Details) - shares	12 Months Ended
EARNINGS PER SHARE (Details) - shares	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	91,097	31,259	622

EARNINGS PER SHARE (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EARNINGS PER SHARE
Net income									$ 55,784	$ 39,421	$ 16,056
Preferred dividends declared									(191)	(330)	(184)
Preferred stock, premium amortization									145	189	101
Net income available to common shareholders	$ 12,792	$ 12,677	$ 16,321	$ 13,948	$ 16,302	$ 8,462	$ 12,746	$ 1,770	55,738	39,280	15,973
Common shareholder dividends									(23,389)	(19,838)	(13,922)
Unvested restricted stock award dividends									(210)	(139)	(86)
Undistributed earnings to unvested restricted stock awards									(267)	(123)	(11)
Undistributed earnings to common shareholders									31,872	19,180	1,954
Basic
Distributed earnings to common shareholders									23,389	19,838	13,922
Undistributed earnings to common shareholders									31,872	19,180	1,954
Total common shareholders earnings, basic									55,261	39,018	15,876
Diluted
Distributed earnings to common shareholders									23,389	19,838	13,922
Undistributed earnings to common shareholders									31,872	19,180	1,954
Total common shareholders earnings									55,261	39,018	15,876
Add back:
Undistributed earnings reallocated from unvested restricted stock awards									2	2
Total common shareholders earnings, diluted									$ 55,263	$ 39,020	$ 15,876
Weighted average common shares outstanding, basic (In shares)									24,288,793	23,130,475	17,781,631
Options									204,638	418,550	501,583
Weighted average common shares outstanding, diluted (In shares)									24,493,431	23,549,025	18,283,214
Basic earnings per common share (In dollars per share)	$ 0.52	$ 0.51	$ 0.67	$ 0.58	$ 0.68	$ 0.35	$ 0.53	$ 0.08	$ 2.28	$ 1.69	$ 0.89
Diluted earnings per common share (In dollars per share)	$ 0.51	$ 0.51	$ 0.67	$ 0.57	$ 0.67	$ 0.35	$ 0.52	$ 0.08	$ 2.26	$ 1.66	$ 0.87

CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Dec. 31, 2019	Dec. 31, 2018
Capital requirements and restrictions on dividends
Minimum capital conservation buffer percentage	2.50%
Total Capital (to Risk Weighted Assets): Actual Amount		$ 772,572	$ 584,409
Total Capital (to Risk Weighted Assets): Actual Ratio		14.72%	12.79%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount		$ 515,548	$ 479,781
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio		10.50%	10.50%
Tier I Capital (to Risk Weighted Assets): Actual Amount		$ 516,647	$ 400,480
Tier I Capital (to Risk Weighted Assets): Actual Ratio		10.52%	8.76%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount		$ 417,348	$ 319,854
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio		8.50%	7.00%
Common Equity Tier 1 capital (to risk-weighted assets): Actual Amount		$ 451,696	$ 468,212
Common Equity Tier 1 capital (to risk-weighted assets): Actual Ratio		9.20%	10.25%
Common Equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount		$ 343,699	$ 388,394
Common Equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio		7.00%	8.50%
Tier I Capital (to Average Assets): Actual Amount		$ 516,647	$ 468,212
Tier I Capital (to Average Assets): Actual Ratio		8.74%	8.53%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount		$ 236,504	$ 219,602
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio		4.00%	4.00%
Minimum
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	8.00%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	6.00%
Common Equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio	4.50%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio	4.00%
Midland States Bank
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Actual Amount		$ 648,291	$ 583,465
Total Capital (to Risk Weighted Assets): Actual Ratio		13.22%	12.76%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount		$ 515,035	$ 480,236
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio		10.50%	10.50%
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements		$ 490,509	$ 457,368
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		$ 619,019	$ 561,402
Tier I Capital (to Risk Weighted Assets): Actual Ratio		12.62%	12.27%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount		$ 416,933	$ 320,157
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio		8.50%	7.00%
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements		$ 392,407	$ 297,289
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements		8.00%	6.50%
Common Equity Tier 1 capital (to risk-weighted assets): Actual Amount		$ 619,019	$ 561,402
Common Equity Tier 1 capital (to risk-weighted assets): Actual Ratio		12.62%	12.27%
Common Equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount		$ 343,356	$ 388,763
Common Equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio		7.00%	8.50%
Common Equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements		$ 318,831	$ 365,894
Common Equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements		6.50%	8.00%
Tier I Capital (to Average Assets): Actual Amount		$ 619,019	$ 561,402
Tier I Capital (to Average Assets): Actual Ratio		10.48%	10.22%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount		$ 236,214	$ 219,622
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		$ 295,267	$ 274,528
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			24 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019
Assets and liabilities measured at fair value on a recurring basis:
Transfer of assets between level 1 to 2	$ 0			$ 0
Transfer of assets between level 2 to 1	0			0
Transfer of assets into level 3				0
Transfer of assets out of level 3				0
Assets
Investment securities available for sale	649,433			649,433
Equity securities recorded at fair value	5,621	$ 3,334		5,621
Loans held for sale	16,431	30,401		16,431
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	1,972	3,545		1,972
Losses recognized on assets measured on non-recurring basis
Loans servicing rights	2,139	(449)	$ 2,324
Mortgage servicing rights held for sale	(490)	458	4,059
Impaired loans	10,259	5,800	7,096
Other real estate owned	16	301	253
Assets held for sale	3,577		1,516
Total loss on assets measured on a nonrecurring basis	15,501	6,559	$ 15,248
U.S. Treasury securities
Assets
Investment securities available for sale		24,650
U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale	60,020	75,684		60,020
Agency mortgage-backed securities
Assets
Investment securities available for sale	324,974	326,305		324,974
Non-agency mortgage-backed securities
Assets
Investment securities available for sale	17,148			17,148
State and municipal securities
Assets
Investment securities available for sale	124,555	159,262		124,555
Corporate Securities
Assets
Investment securities available for sale	122,736	71,550		122,736
Corporate Securities
Assets
Investment securities available for sale		657,451
Recurring member
Assets
Loans held for sale	16,431	30,401		16,431
Total Assets	675,141	695,823		675,141
Recurring member \| U.S. Treasury securities
Assets
Investment securities available for sale	60,020	24,650		60,020
Recurring member \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale		75,684
Recurring member \| Agency mortgage-backed securities
Assets
Investment securities available for sale	324,974	326,305		324,974
Recurring member \| Non-agency mortgage-backed securities
Assets
Investment securities available for sale	17,148			17,148
Recurring member \| State and municipal securities
Assets
Investment securities available for sale	124,555	159,262		124,555
Recurring member \| Corporate Securities
Assets
Investment securities available for sale	122,736	71,550		122,736
Recurring member \| Corporate Securities
Assets
Equity securities recorded at fair value	5,621	3,334		5,621
Recurring member \| Interest rate lock commitments
Assets
Derivative Assets	3,350	4,492		3,350
Recurring member \| Interest rate swap contracts
Assets
Derivative Assets	306	145		306
Liabilities
Derivative liability	306	145		306
Recurring member \| Level 1
Assets
Total Assets		24,650
Recurring member \| Level 1 \| U.S. Treasury securities
Assets
Investment securities available for sale		24,650
Recurring member \| Level 2
Assets
Loans held for sale	16,431	30,401		16,431
Total Assets	674,186	669,250		674,186
Recurring member \| Level 2 \| U.S. Treasury securities
Assets
Investment securities available for sale	60,020			60,020
Recurring member \| Level 2 \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale		75,684
Recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Investment securities available for sale	324,974	326,305		324,974
Recurring member \| Level 2 \| Non-agency mortgage-backed securities
Assets
Investment securities available for sale	17,148			17,148
Recurring member \| Level 2 \| State and municipal securities
Assets
Investment securities available for sale	124,555	159,262		124,555
Recurring member \| Level 2 \| Corporate Securities
Assets
Investment securities available for sale	121,781	69,627		121,781
Recurring member \| Level 2 \| Corporate Securities
Assets
Equity securities recorded at fair value	5,621	3,334		5,621
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	3,350	4,492		3,350
Recurring member \| Level 2 \| Interest rate swap contracts
Assets
Derivative Assets	306	145		306
Liabilities
Derivative liability	306	145		306
Recurring member \| Level 3
Assets
Total Assets	955	1,923		955
Recurring member \| Level 3 \| Corporate Securities
Assets
Investment securities available for sale	955	1,923		955
Non recurring member
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	53,824	53,447		53,824
Mortgage servicing rights held for sale	1,972	3,545		1,972
Impaired loans	14,693	11,238		14,693
Other real estate owned		1,439
Assets held for sale	3,974	1,687		3,974
Non recurring member \| Level 1
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale		3,545
Non recurring member \| Level 2
Assets measured at fair value on a non-recurring basis:
Impaired loans	12,518	9,226		12,518
Other real estate owned		1,439
Assets held for sale	3,974	1,687		3,974
Non recurring member \| Level 3
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	53,824	53,447		53,824
Mortgage servicing rights held for sale	1,972			1,972
Impaired loans	$ 2,175	$ 2,012		$ 2,175

FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - Corporate Securities - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 1,923	$ 4,779
Total realized in earnings	52	242
Total unrealized in other comprehensive income	32	(36)
Net settlements (principal and interest)	(1,052)	(3,062)
Balance, end of period	$ 955	$ 1,923

FAIR VALUE OF FINANCIAL INSTRUMENTS- Quantitative Information (Details) - Non recurring member $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	$ 53,824	$ 53,447
Impaired loans	14,693	11,238
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	53,824	53,447
Impaired loans	$ 2,175	$ 2,012
Level 3 \| Loan servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation technique for servicing asset	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation technique for servicing asset	us-gaap:ValuationTechniqueFairValueOfCollateralMember
Level 3 \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation technique for impaired loans	us-gaap:ValuationTechniqueFairValueOfCollateralMember	us-gaap:ValuationTechniqueFairValueOfCollateralMember
Level 3 \| Discounted cash flow \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	$ 52,693	$ 53,447
Level 3 \| Discounted cash flow \| SBA servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	1,131
Level 3 \| Discounted cash flow \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	1,972
Level 3 \| Fair value of collateral \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	$ 2,175	$ 2,012
Minimum \| Level 3 \| Prepayment speed \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.00	8.00
Minimum \| Level 3 \| Prepayment speed \| SBA servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.31
Minimum \| Level 3 \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.64
Minimum \| Level 3 \| Discount rate \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	10.00	10.00
Minimum \| Level 3 \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	9.50
Minimum \| Level 3 \| Measurement Input Discount Rate For Type Of Property Age Of Appraisal And Current Status [Member] \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for impaired loans	4.32	5.00
Maximum \| Level 3 \| Prepayment speed \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	18.00	18.00
Maximum \| Level 3 \| Prepayment speed \| SBA servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	9.21
Maximum \| Level 3 \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	26.28
Maximum \| Level 3 \| Discount rate \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	14.00	27.00
Maximum \| Level 3 \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	12.50
Maximum \| Level 3 \| Measurement Input Discount Rate For Type Of Property Age Of Appraisal And Current Status [Member] \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for impaired loans	8.00	7.26
Weighted average \| Level 3 \| Prepayment speed \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.20	8.24
Weighted average \| Level 3 \| Prepayment speed \| SBA servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.60
Weighted average \| Level 3 \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	12.42
Weighted average \| Level 3 \| Discount rate \| Commercial MSR
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	11.02	11.12
Weighted average \| Level 3 \| Discount rate \| SBA servicing rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	11.70
Weighted average \| Level 3 \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	10.75
Weighted average \| Level 3 \| Measurement Input Discount Rate For Type Of Property Age Of Appraisal And Current Status [Member] \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for impaired loans	5.22	5.26

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, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	$ 16,431	$ 30,401
Difference	652	1,079
Contractual principal	15,779	29,322
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(382)	258	$ (724)
Commercial Portfolio
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	8,236	22,280
Difference	206	595
Contractual principal	8,030	21,685
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(389)	252	(650)
Residential loans held for sale
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	8,195	8,121
Difference	446	484
Contractual principal	7,749	7,637
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	$ 7	$ 6	$ (74)

FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets
Investment securities available for sale	$ 649,433
Equity securities recorded at fair value	5,621	$ 3,334
Loans held for sale	16,431	30,401
Accrued interest receivable	16,346	16,560
Liabilities
Trust preferred debentures	48,288	47,794
Accrued interest payable	6,400	4,855
Level 1
Assets
Cash and due from banks	392,694	210,780
Federal funds sold	1,811	2,920
Level 2
Assets
Nonmarketable equity securities	44,505	42,472
Accrued interest receivable	16,346	16,560
Liabilities
Deposits	4,548,327	4,069,098
Short-term borrowings	82,029	124,235
FHLB and other borrowings	506,832	641,050
Subordinated debt	182,189	91,926
Trust preferred debentures	53,811	56,805
Accrued interest payable	6,400
Level 3
Assets
Loans, net	4,385,768	4,091,438
Carrying value
Assets
Cash and due from banks	392,694	210,780
Federal funds sold	1,811	2,920
Nonmarketable equity securities	44,505	42,472
Loans, net	4,373,382	4,116,648
Accrued interest receivable	16,346	16,560
Liabilities
Deposits	4,544,254	4,074,170
Short-term borrowings	82,029	124,235
FHLB and other borrowings	493,311	640,631
Subordinated debt	176,653	94,134
Trust preferred debentures	48,288	47,794
Accrued interest payable	6,400
Fair value
Assets
Cash and due from banks	392,694	210,780
Federal funds sold	1,811	2,920
Nonmarketable equity securities	44,505	42,472
Loans, net	4,385,768	4,091,438
Accrued interest receivable	16,346	16,560
Liabilities
Deposits	4,548,327	4,069,098
Short-term borrowings	82,029	124,235
FHLB and other borrowings	506,832	641,050
Subordinated debt	182,189	91,926
Trust preferred debentures	53,811	56,805
Accrued interest payable	6,400
Interest rate swap contracts \| Level 2
Liabilities
Accrued interest payable		4,855
Interest rate swap contracts \| Carrying value
Liabilities
Accrued interest payable		4,855
Interest rate swap contracts \| Fair value
Liabilities
Accrued interest payable		4,855
Corporate Securities
Assets
Investment securities available for sale	$ 122,736	$ 71,550

COMMITMENTS, CONTINGENCIES AND CREDIT RISK - Maturities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Anticipated material loss	$ 0
Losses as a result of make whole requests and loan repurchases	0	$ 11,000	$ 17,000
Liability for unresolved repurchase demands	289,000	492,000
Commitments to extend credit
Loan commitments	725,506,000	663,555,000
Financial guarantees - standby letters of credit
Loan commitments	$ 106,678,000	$ 142,859,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 48,687	$ 49,450	$ 46,077	$ 45,601	$ 48,535	$ 45,081	$ 48,286	$ 38,185	$ 189,815	$ 180,087	$ 129,662
Provision for loan losses	5,305	4,361	4,076	3,243	3,467	2,103	1,854	2,006	16,985	9,430	9,556
Noninterest income	19,014	19,606	19,587	17,075	21,170	18,272	15,847	16,502	75,282	71,791	59,362
Noninterest expense	46,325	48,025	40,194	41,097	45,375	50,317	46,452	49,499	175,641	191,643	152,997
Income (loss) before income taxes (benefit)	16,071	16,670	21,394	18,336	20,863	10,933	15,827	3,182	72,471	50,805	26,471
Income taxes (benefit)	3,279	$ 4,015	$ 5,039	$ 4,354	4,527	$ 2,436	$ 3,045	$ 1,376	16,687	11,384	10,415
Net income (loss)									55,784	39,421	16,056
Total assets	6,087,017				5,637,673				6,087,017	5,637,673	4,412,701
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)									202,147	190,883	135,974
Provision for loan losses									16,985	9,430	9,556
Noninterest income									39,184	40,313	27,955
Noninterest expense									150,366	165,744	129,626
Income (loss) before income taxes (benefit)									73,980	56,022	24,747
Income taxes (benefit)									18,038	14,154	17,102
Net income (loss)									55,942	41,868	7,645
Total assets	6,000,496				5,571,752				6,000,496	5,571,752	4,336,301
Wealth management
Segment Reporting Information [Line Items]
Net interest income (expense)										298	524
Noninterest income									21,832	20,484	13,339
Noninterest expense									13,914	11,680	8,823
Income (loss) before income taxes (benefit)									7,918	9,102	5,040
Income taxes (benefit)									617	514	423
Net income (loss)									7,301	8,588	4,617
Total assets	20,969				18,218				20,969	18,218	15,979
Commercial FHA origination and servicing
Segment Reporting Information [Line Items]
Net interest income (expense)									(613)	(422)	312
Noninterest income									14,498	11,457	18,570
Noninterest expense									10,934	15,058	13,729
Income (loss) before income taxes (benefit)									2,951	(4,023)	5,153
Income taxes (benefit)									1,389	(979)	(1,033)
Net income (loss)									1,562	(3,044)	6,186
Total assets	91,496				91,108				91,496	91,108	99,685
Other
Segment Reporting Information [Line Items]
Net interest income (expense)									(11,719)	(10,672)	(7,148)
Noninterest income									(232)	(463)	(502)
Noninterest expense									427	(839)	819
Income (loss) before income taxes (benefit)									(12,378)	(10,296)	(8,469)
Income taxes (benefit)									(3,357)	(2,305)	(6,077)
Net income (loss)									(9,021)	(7,991)	(2,392)
Total assets	$ (25,944)				$ (43,405)				$ (25,944)	$ (43,405)	$ (39,264)

RELATED PARTY TRANSACTIONS (Details)	12 Months Ended
RELATED PARTY TRANSACTIONS (Details)	Dec. 31, 2019 USD ($) item	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
Rent paid		$ 712,000	$ 719,000
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	$ 633,000	418,000	$ 20,000
Related Party Operating Lease Member
Related Party Transaction [Line Items]
Rent paid	$ 64,000	$ 42,000

REVENUE FROM CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Noninterest income - out-of-scope of Topic 606									$ 25,450
Total noninterest income	$ 19,014	$ 19,606	$ 19,587	$ 17,075	$ 21,170	$ 18,272	$ 15,847	$ 16,502	75,282	$ 71,791	$ 59,362
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - out-of-scope of Topic 606										25,579	31,722
Total noninterest income										71,791	59,362
Trust management/administration fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									16,114
Trust management/administration fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										16,099	9,751
Investment advisory fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									2,171
Investment advisory fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										2,041	1,364
Investment brokerage fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									1,165
Investment brokerage fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										1,065	1,388
Other
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									2,382
Other \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										1,308	837
Nonsufficient fund fees
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									7,721
Nonsufficient fund fees \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										7,672	4,193
Other
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									3,306
Other \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										2,768	1,782
Interchange revenues
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									11,992
Interchange revenues \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										10,674	5,353
Merchant services revenue
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									1,506
Merchant services revenue \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										1,650	1,103
Other.
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606									$ 3,475
Other. \| Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606										$ 2,935	$ 1,869

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Financial Information (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets
Accrued income taxes receivable	$ 6,362	$ 8,809
Other assets	63,545	50,900
Total assets	6,087,017	5,637,673	$ 4,412,701
Liabilities:
Subordinated debt	176,653	94,134
Trust preferred debentures	48,288	47,794
Deferred tax liabilities, net	11,278
Other liabilities	47,524	43,329
Total liabilities	5,425,106	5,029,148
Shareholders' equity	661,911	608,525	$ 449,545	$ 321,770
Total liabilities and shareholders' equity	6,087,017	5,637,673
Midland States Bancorp, Inc
Assets
Cash	52,673	20,312
Investment in common stock of subsidiaries	832,681	764,483
Accrued income taxes receivable	2,563
Other assets	2,371	2,330
Total assets	890,288	787,125
Liabilities:
Subordinated debt	176,653	94,134
Trust preferred debentures	48,288	47,794
Other borrowings	181	33,021
Accrued income taxes payable		778
Deferred tax liabilities, net	849	972
Other liabilities	2,406	1,901
Total liabilities	228,377	178,600
Shareholders' equity	661,911	608,525
Total liabilities and shareholders' equity	$ 890,288	$ 787,125

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Condensed Statements of Income
Interest expense	$ (15,757)	$ (15,556)	$ (14,559)	$ (13,831)	$ (13,057)	$ (11,906)	$ (9,997)	$ (8,320)	$ (59,703)	$ (43,280)	$ (23,451)
Income before income tax benefit and equity in undistributed income (loss) of subsidiaries	16,071	16,670	21,394	18,336	20,863	10,933	15,827	3,182	72,471	50,805	26,471
Income tax benefit	$ (3,279)	$ (4,015)	$ (5,039)	$ (4,354)	$ (4,527)	$ (2,436)	$ (3,045)	$ (1,376)	(16,687)	(11,384)	(10,415)
Net income									55,784	39,421	16,056
Midland States Bancorp, Inc
Condensed Statements of Income
Dividends received from subsidiaries									43,900	17,000	19,500
Other income										6	4
Interest expense									(11,798)	(10,714)	(7,162)
Other expense									(2,753)	(1,180)	(1,295)
Income before income tax benefit and equity in undistributed income (loss) of subsidiaries									29,349	5,112	11,047
Income tax benefit									3,371	2,312	6,080
Income before equity in undistributed income (loss) of subsidiaries									32,720	7,424	17,127
Equity in undistributed (loss) income of subsidiaries									23,064	31,997	(1,071)
Net income									$ 55,784	$ 39,421	$ 16,056

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net income	$ 12,792	$ 12,655	$ 16,355	$ 13,982	$ 16,336	$ 8,497	$ 12,782	$ 1,806	$ 55,784	$ 39,421	$ 16,056
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation expense									2,364	1,533	1,384
Change in other assets									(8,470)	(5,712)	3,673
Change in other liabilities									3,656	3,783	(2,835)
Net cash provided by operating activities									119,406	97,060	70,449
Cash flows from investing activities:
Net cash acquired (paid) in acquisitions									69,879	36,153	(18,519)
Net cash provided by (used in) investing activities									54,459	(6,661)	(234,607)
Cash flows from financing activities:
Proceeds from issuance of subordinated debt, net of issuance costs									98,265		39,354
Payments made on subordinated debt									(17,765)
Proceeds from other borrowings, net of issuance costs											39,964
Payments made on other borrowings									(32,857)	(4,286)	(3,198)
Cash dividends paid on preferred stock									(191)	(330)	(184)
Redemption of Series H preferred stock									(2,636)
Cash dividends paid on common stock									(23,599)	(19,977)	(14,008)
Common stock repurchased									(4,019)
Proceeds from issuance of common stock under employee benefit plans									5,794	2,278	3,225
Net cash provided by (used in) financing activities									6,940	(91,901)	188,644
Cash and cash equivalents:
Beginning of year				213,700					213,700
End of year	394,505				213,700				394,505	213,700
Midland States Bancorp, Inc
Cash flows from operating activities:
Net income									55,784	39,421	16,056
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed loss (income) of subsidiaries									(23,064)	(31,997)	1,071
Share-based compensation expense									2,364	1,533	1,384
Change in other assets									(2,604)	3,273	(3,226)
Change in other liabilities									1,528	2,863	1,649
Net cash provided by operating activities									34,008	15,093	16,934
Cash flows from investing activities:
Net cash acquired (paid) in acquisitions									(1,021)	(32,890)	(60,457)
Capital injection to subsidiaries											(350)
Net cash provided by (used in) investing activities									(1,021)	(32,890)	(60,807)
Cash flows from financing activities:
Proceeds from issuance of subordinated debt, net of issuance costs									98,265		39,354
Payments made on subordinated debt									(17,765)
Proceeds from other borrowings, net of issuance costs											39,964
Payments made on other borrowings									(56,475)	(4,286)	(2,857)
Cash dividends paid on preferred stock									(191)	(330)	(184)
Redemption of Series H preferred stock									(2,636)
Cash dividends paid on common stock									(23,599)	(19,977)	(14,008)
Common stock repurchased									(4,019)
Proceeds from issuance of common stock under employee benefit plans									5,794	2,278	3,225
Net cash provided by (used in) financing activities									(626)	(22,315)	65,494
Net increase (decrease) in cash									32,361	(40,112)	21,621
Cash and cash equivalents:
Beginning of year				$ 20,312				$ 60,424	20,312	60,424	38,803
End of year	$ 52,673				$ 20,312				$ 52,673	$ 20,312	$ 60,424

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)
Interest income	$ 64,444	$ 65,006	$ 60,636	$ 59,432	$ 61,592	$ 56,987	$ 58,283	$ 46,505	$ 249,518	$ 223,367	$ 153,113
Interest expense	15,757	15,556	14,559	13,831	13,057	11,906	9,997	8,320	59,703	43,280	23,451
Net interest income	48,687	49,450	46,077	45,601	48,535	45,081	48,286	38,185	189,815	180,087	129,662
Provision for loan losses	5,305	4,361	4,076	3,243	3,467	2,103	1,854	2,006	16,985	9,430	9,556
Net interest income after provision for loan losses	43,382	45,089	42,001	42,358	45,068	42,978	46,432	36,179	172,830	170,657	120,106
Noninterest income	19,014	19,606	19,587	17,075	21,170	18,272	15,847	16,502	75,282	71,791	59,362
Noninterest expense	46,325	48,025	40,194	41,097	45,375	50,317	46,452	49,499	175,641	191,643	152,997
Income (loss) before income taxes (benefit)	16,071	16,670	21,394	18,336	20,863	10,933	15,827	3,182	72,471	50,805	26,471
Income taxes	3,279	4,015	5,039	4,354	4,527	2,436	3,045	1,376	16,687	11,384	10,415
Net income	12,792	12,655	16,355	13,982	16,336	8,497	12,782	1,806	55,784	39,421	16,056
Preferred stock dividends and premium amortization		(22)	34	34	34	35	36	36
Net income available to common shareholders	$ 12,792	$ 12,677	$ 16,321	$ 13,948	$ 16,302	$ 8,462	$ 12,746	$ 1,770	$ 55,738	$ 39,280	$ 15,973
Per common share data:
Basic earnings per common share (In dollars per share)	$ 0.52	$ 0.51	$ 0.67	$ 0.58	$ 0.68	$ 0.35	$ 0.53	$ 0.08	$ 2.28	$ 1.69	$ 0.89
Diluted earnings per common share (In dollars per share)	$ 0.51	$ 0.51	$ 0.67	$ 0.57	$ 0.67	$ 0.35	$ 0.52	$ 0.08	$ 2.26	$ 1.66	$ 0.87

LOANS - Risk category (Details) $ in Thousands	12 Months Ended
LOANS - Risk category (Details) $ in Thousands	Dec. 31, 2019 USD ($) region	Dec. 31, 2018 USD ($)
Risk category
Number of main regions \| region	4
Loans and Leases Receivable, Gross, Total	$ 4,401,410	$ 4,137,551
Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	2,790,422	2,682,268
Non-PCI loans
Risk category
Loans and Leases Receivable, Gross, Total	4,358,699	4,094,576
Non-PCI loans \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	2,761,560	2,649,828
Non-PCI loans \| Commercial Portfolio \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	2,598,834	2,503,221
Non-PCI loans \| Commercial Portfolio \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	38,305	53,857
Non-PCI loans \| Commercial Portfolio \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	92,442	61,115
Non-PCI loans \| Commercial Portfolio \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	28,889	31,154
Non-PCI loans \| Commercial Portfolio \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	3,090	481
Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,597,139	1,444,748
Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	1,586,146	1,435,952
Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	10,993	8,796
Commercial \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,055,185	810,884
Commercial \| Non-PCI loans \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,052,107	806,027
Commercial \| Non-PCI loans \| Commercial Portfolio \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	1,005,442	748,296
Commercial \| Non-PCI loans \| Commercial Portfolio \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	17,435	35,103
Commercial \| Non-PCI loans \| Commercial Portfolio \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	23,387	14,139
Commercial \| Non-PCI loans \| Commercial Portfolio \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	5,843	8,489
Commercial real estate \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,526,504	1,639,155
Commercial real estate \| Non-PCI loans \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	1,506,397	1,619,903
Commercial real estate \| Non-PCI loans \| Commercial Portfolio \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	1,398,400	1,536,127
Commercial real estate \| Non-PCI loans \| Commercial Portfolio \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	18,450	15,306
Commercial real estate \| Non-PCI loans \| Commercial Portfolio \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	67,805	46,976
Commercial real estate \| Non-PCI loans \| Commercial Portfolio \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	21,742	21,494
Construction and land development \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	208,733	232,229
Construction and land development \| Non-PCI loans \| Commercial Portfolio
Risk category
Loans and Leases Receivable, Gross, Total	203,056	223,898
Construction and land development \| Non-PCI loans \| Commercial Portfolio \| Acceptable credit quality
Risk category
Loans and Leases Receivable, Gross, Total	194,992	218,798
Construction and land development \| Non-PCI loans \| Commercial Portfolio \| Special mention
Risk category
Loans and Leases Receivable, Gross, Total	2,420	3,448
Construction and land development \| Non-PCI loans \| Commercial Portfolio \| Substandard
Risk category
Loans and Leases Receivable, Gross, Total	1,250
Construction and land development \| Non-PCI loans \| Commercial Portfolio \| Substandard - nonaccrual
Risk category
Loans and Leases Receivable, Gross, Total	1,304	1,171
Construction and land development \| Non-PCI loans \| Commercial Portfolio \| Not graded
Risk category
Loans and Leases Receivable, Gross, Total	3,090	481
Residential real estate \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	568,291	578,048
Residential real estate \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	555,654	569,289
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	546,630	562,019
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	9,024	7,270
Consumer loans held for sale \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	710,116	613,184
Consumer loans held for sale \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	708,904	611,408
Consumer loans held for sale \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	708,528	610,839
Consumer loans held for sale \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	376	569
Lease financing \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	332,581	264,051
Lease financing \| Non-PCI loans \| Other loan portfolio
Risk category
Loans and Leases Receivable, Gross, Total	332,581	264,051
Lease financing \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Loans and Leases Receivable, Gross, Total	330,988	263,094
Lease financing \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Loans and Leases Receivable, Gross, Total	$ 1,593	$ 957