0001466026-20-000007 | 10-Q | XBRL Viewer | Midland States Bancorp INC

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Oct. 31, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-35272
Entity Registrant Name	MIDLAND STATES BANCORP, INC.
Entity Incorporation, State or Country Code	IL
Entity Tax Identification Number	37-1233196
Entity Address, Address Line One	1201 Network Centre Drive
Entity Address, City or Town	Effingham
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	62401
City Area Code	217
Local Phone Number	342-7321
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	MSBI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		22,471,653
Entity Central Index Key	0001466026
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and due from banks	$ 459,473	$ 392,694
Federal funds sold	1,723	1,811
Cash and cash equivalents	461,196	394,505
Investment securities available for sale, at fair value (allowance for credit losses of $308 at September 30, 2020)	609,831	649,433
Equity securities, at fair value	9,143	5,621
Loans	4,941,466	4,401,410
Allowance for credit losses on loans	(52,771)	(28,028)
Total loans, net	4,888,695	4,373,382
Loans held for sale	62,500	16,431
Premises and equipment, net	74,967	91,055
Operating lease right-of-use asset	9,459	14,224
Other real estate owned	15,961	6,745
Nonmarketable equity securities	50,765	44,505
Accrued interest receivable	25,061	16,346
Loan servicing rights, at lower of cost or fair value	42,465	53,824
Mortgage servicing rights held for sale	1,308	1,972
Goodwill	161,904	171,758
Other intangible assets, net	29,938	34,886
Cash surrender value of life insurance policies	145,112	142,423
Accrued income taxes receivable	0	6,362
Other assets	111,740	63,545
Total assets	6,700,045	6,087,017
Deposits:
Noninterest-bearing	1,355,188	1,019,472
Interest-bearing	3,673,548	3,524,782
Total deposits	5,028,736	4,544,254
Short-term borrowings	58,625	82,029
FHLB advances and other borrowings	693,640	493,311
Subordinated debt	169,702	176,653
Trust preferred debentures	48,682	48,288
Accrued interest payable	4,051	6,400
Accrued income taxes payable	606	0
Deferred tax liabilities, net	6,834	11,278
Operating lease liabilities	12,428	15,369
Other liabilities	54,861	47,524
Total liabilities	6,078,165	5,425,106
Shareholders’ Equity:
Common stock, $0.01 par value; 40,000,000 shares authorized; 22,602,844 and 24,420,345 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	226	244
Capital surplus	458,209	488,305
Retained earnings	154,026	165,920
Accumulated other comprehensive income	9,419	7,442
Total shareholders’ equity	621,880	661,911
Total liabilities and shareholders’ equity	$ 6,700,045	$ 6,087,017

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Investment securities, available-for-sale, allowance for credit loss	$ 308
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	22,602,844	24,420,345
Common stock, shares outstanding (in shares)	22,602,844	24,420,345

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest income:
Loans: Taxable	$ 54,151	$ 57,162	$ 160,863	$ 162,065
Loans: Tax exempt	770	877	2,391	2,769
Loans held for sale	329	241	1,524	991
Investment securities:
Taxable	3,424	3,725	11,390	11,014
Tax exempt	850	1,011	2,699	3,138
Nonmarketable equity securities	672	592	1,957	1,810
Federal funds sold and cash investments	118	1,398	1,352	3,287
Total interest income	60,314	65,006	182,176	185,074
Interest expense:
Deposits	4,212	9,320	18,133	25,120
Short-term borrowings	28	212	157	659
FHLB advances and other borrowings	3,220	3,524	9,092	10,912
Subordinated debt	2,365	1,671	7,355	4,699
Trust preferred debentures	509	829	1,819	2,556
Total interest expense	10,334	15,556	36,556	43,946
Net interest income	49,980	49,450	145,620	141,128
Provision for credit losses on loans	10,970	4,361	33,149	11,680
Net interest income after provision for credit losses on loans	39,010	45,089	112,471	129,448
Noninterest income:
Wealth management revenue	5,559	5,998	16,934	16,455
Commercial FHA revenue	926	3,954	5,607	11,607
Residential mortgage banking revenue	3,049	720	7,527	2,165
Service charges on deposit accounts	2,092	3,008	6,454	8,167
Interchange revenue	3,283	3,249	9,129	8,939
Gain on sales of investment securities, net	1,721	25	1,721	39
(Loss) gain on sales of other real estate owned	(12)	44	(6)	98
Impairment on commercial mortgage servicing rights	(1,418)	(1,060)	(9,993)	(526)
Bank owned life insurance	897	916	2,689	2,727
Other income	2,822	2,752	6,851	6,597
Total noninterest income	18,919	19,606	46,913	56,268
Noninterest expense:
Salaries and employee benefits	21,118	25,083	62,921	68,256
Occupancy and equipment	4,866	4,793	14,021	14,157
Data processing	5,396	5,271	16,030	14,817
FDIC insurance	1,098	(37)	1,652	765
Professional	1,861	2,348	5,322	6,831
Marketing	738	815	2,513	3,167
Communications	916	937	3,152	2,585
Loan expense	621	660	1,868	1,636
Other real estate owned	267	131	1,779	325
Amortization of intangible assets	1,557	1,803	4,948	5,286
Loss (gain) on mortgage servicing rights held for sale	188	(70)	1,075	(585)
Impairment related to branch optimization	12,651	3,229	12,857	3,229
Other expense	3,382	3,062	9,978	8,847
Total noninterest expense	54,659	48,025	138,116	129,316
Income before income taxes	3,270	16,670	21,268	56,400
Income taxes	3,184	4,015	7,064	13,408
Net income	86	12,655	14,204	42,992
Preferred stock dividends and premium amortization	0	(22)	0	46
Net income available to common shareholders	$ 86	$ 12,677	$ 14,204	$ 42,946
Per common share data:
Basic earnings per common share (in dollars per share)	$ 0.00	$ 0.51	$ 0.59	$ 1.76
Diluted earnings per common share (in dollars per share)	$ 0.00	$ 0.51	$ 0.59	$ 1.75
Weighted average common shares outstanding (in shares)	22,937,837	24,488,422	23,567,000	24,190,574
Weighted average diluted common shares outstanding (in shares)	22,937,837	24,684,529	23,578,518	24,400,063

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 86	$ 12,655	$ 14,204	$ 42,992
Investment securities available for sale:
Unrealized (losses) gains that occurred during the period	(134)	1,368	5,260	14,174
Provision for credit loss expense	181	0	308	0
Reclassification adjustment for realized net gains on sales of investment securities, included in net income	(1,721)	(25)	(1,721)	(39)
Income tax effect	460	(357)	(1,058)	(3,875)
Change in investment securities available for sale, net of tax	(1,214)	986	2,789	10,260
Cash flow hedges:
Net unrealized derivative losses on cash flow hedges	(137)	0	(1,120)	0
Income tax benefit	38	0	308	0
Change in cash flow hedges, net of tax	(99)	0	(812)	0
Other comprehensive (loss) income, net of tax	(1,313)	986	1,977	10,260
Total comprehensive (loss) income	$ (1,227)	$ 13,641	$ 16,181	$ 53,252

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Preferred stock	Common stock	Capital surplus	Retained earnings	Accumulated other comprehensive income (loss)	Cumulative effect of adjustment	Cumulative effect of adjustment Retained earnings	Adjusted Balance	Adjusted Balance Preferred stock	Adjusted Balance Common stock	Adjusted Balance Capital surplus	Adjusted Balance Retained earnings	Adjusted Balance Accumulated other comprehensive income (loss)
Beginning Balance at Dec. 31, 2018	$ 608,525	$ 2,781	$ 238	$ 473,833	$ 133,781	$ (2,108)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	42,992				42,992
Other comprehensive income (loss)	10,260					10,260
Acquisition of HomeStar Financial Group, Inc.	10,339		4	10,335
Common dividends declared	(17,625)				(17,625)
Common stock repurchased	(1,832)		(1)	(1,831)
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	1,791			1,791
Issuance of common stock under employee benefit plans	3,899		2	3,897
Ending Balance at Sep. 30, 2019	655,522	0	243	488,025	159,102	8,152
Beginning Balance at Jun. 30, 2019	639,888	2,684	239	477,412	152,387	7,166
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	12,655				12,655
Other comprehensive income (loss)	986					986
Acquisition of HomeStar Financial Group, Inc.	10,339		4	10,335
Common dividends declared	(5,962)				(5,962)
Common stock repurchased	(1,832)		(1)	(1,831)
Preferred dividends declared	(26)				(26)
Preferred stock, premium amortization	48	(48)			48
Redemption of Series H preferred stock	(2,636)	(2,636)
Share-based compensation expense	452			452
Issuance of common stock under employee benefit plans	1,658		1	1,657
Ending Balance at Sep. 30, 2019	655,522	0	243	488,025	159,102	8,152
Beginning Balance at Dec. 31, 2019	661,911	0	244	488,305	165,920	7,442	$ (7,172)	$ (7,172)	$ 654,739	$ 0	$ 244	$ 488,305	$ 158,748	$ 7,442
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	14,204				14,204
Other comprehensive income (loss)	1,977					1,977
Common dividends declared	(18,926)				(18,926)
Common stock repurchased	(32,730)		(19)	(32,711)	0
Preferred dividends declared	0
Preferred stock, premium amortization	0
Share-based compensation expense	1,624			1,624
Issuance of common stock under employee benefit plans	992		1	991
Ending Balance at Sep. 30, 2020	621,880	0	226	458,209	154,026	9,419
Beginning Balance at Jun. 30, 2020	633,589	0	229	462,577	160,051	10,732
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	86				86
Other comprehensive income (loss)	(1,313)					(1,313)
Common dividends declared	(6,111)				(6,111)
Common stock repurchased	(5,011)		(4)	(5,007)
Preferred dividends declared	0
Preferred stock, premium amortization	0
Share-based compensation expense	406			406
Issuance of common stock under employee benefit plans	234		1	233
Ending Balance at Sep. 30, 2020	$ 621,880	$ 0	$ 226	$ 458,209	$ 154,026	$ 9,419

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Stockholders' Equity [Abstract]
Common dividend declared, per share (in dollars per share)	$ 0.2675	$ 0.2425	$ 0.8025	$ 0.7275

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income	$ 14,204	$ 42,992
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	34,303	11,680
Depreciation on premises and equipment	5,499	4,947
Amortization of intangible assets	4,948	5,286
Amortization of operating lease right-of-use asset	2,179	2,153
Amortization of loan servicing rights	2,544	2,079
Share-based compensation expense	1,624	1,791
Increase in cash surrender value of life insurance	(2,689)	(2,727)
Investment securities amortization, net	2,445	2,842
Provision for deferred income taxes	(3,518)	0
Gain on sales of investment securities, net	(1,721)	(39)
Loss (gain) on sales of other real estate owned	6	(98)
Impairment on other real estate owned	1,282	16
Origination of loans held for sale	(500,684)	(400,974)
Proceeds from sales of loans held for sale	855,015	766,639
Gain on loans sold and held for sale	(12,128)	(11,580)
Impairment of commercial mortgage servicing rights	9,993	526
Loss (gain) on mortgage servicing rights held for sale	1,075	(585)
Impairment related to branch optimization	12,857	3,229
Net change in operating assets and liabilities:
Accrued interest receivable	(8,715)	560
Other assets	(14,292)	(4,554)
Accrued expenses and other liabilities	1,633	21,921
Net cash provided by operating activities	405,860	446,104
Cash flows from investing activities:
Purchases of investment securities available for sale	(134,799)	(115,847)
Proceeds from sales of investment securities available for sale	0	29,490
Maturities of and payments on investment securities available for sale	154,107	152,252
Purchases of equity securities	(3,280)	(71)
Proceeds from sales of equity securities	0	105
Net increase in loans	(959,915)	(423,747)
Proceeds from sale of commercial FHA origination platform	7,500	0
Proceeds from sales of premises and equipment	7	458
Purchases of premises and equipment	(1,989)	(4,084)
Purchases of nonmarketable equity securities	(6,260)	(13,197)
Proceeds from sales of nonmarketable equity securities	0	10,702
Proceeds from sales of mortgage servicing rights held for sale	0	3,288
Proceeds from sales of other real estate owned	1,900	1,393
Net cash acquired in acquisition	0	69,879
Net cash used in investing activities	(942,729)	(289,379)
Cash flows from financing activities:
Net increase in deposits	484,482	49,261
Net decrease in short-term borrowings	(23,404)	(1,941)
Proceeds from FHLB borrowings	304,000	360,000
Payments made on FHLB borrowings and other borrowings	(103,604)	(448,448)
Proceeds from issuance of subordinated debt, net of issuance costs	0	98,434
Payments made on subordinated debt	(7,250)	0
Cash dividends paid on preferred stock	0	(191)
Redemption of Series H preferred stock	0	(2,636)
Cash dividends paid on common stock	(18,926)	(17,625)
Common stock repurchased	(32,730)	(1,832)
Proceeds from issuance of common stock under employee benefit plans	992	3,899
Net cash provided by financing activities	603,560	38,921
Net increase in cash and cash equivalents	66,691	195,646
Cash and cash equivalents:
Beginning of period	394,505	213,700
End of period	461,196	409,346
Cash payments for:
Interest paid on deposits and borrowed funds	38,905	41,984
Income tax paid, net of refunds	2,562	612
Supplemental disclosures of noncash investing and financing activities:
Transfer of loans to loans held for sale	390,628	410,590
Transfer of loans to other real estate owned	12,359	1,793
Transfer of premises and equipment, net to assets held for sale	11,344	952
Pending settlements on securities sold (purchased), net	$ 23,151	$ (5,241)

BUSINESS DESCRIPTION	9 Months Ended
BUSINESS DESCRIPTION	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS DESCRIPTION	BUSINESS DESCRIPTION Midland States Bancorp, Inc. (the “Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Its wholly owned banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri and provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, multifamily and healthcare facility Federal Housing Administration (“FHA”) loan servicing is provided through Love Funding Corporation (“Love Funding”), our non-bank subsidiary. On August 28, 2020, the Company announced that it had completed the sale of its commercial FHA origination platform to Dwight Capital, a nationwide mortgage banking firm headquartered in New York. The Bank will continue to service Love Funding’s current servicing portfolio of approximately $3.73 billion, which includes approximately $340.1 million in low-cost deposits. 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 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 credit losses on loans and income tax expense.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company are unaudited and should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2020. The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. A discussion of these policies can be found in Note 1 – Summary of Significant Accounting Policies included in the Company's 2019 Annual Report on Form 10-K. Since December 31, 2019, the Company has adopted ASU No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. See “Accounting Guidance Adopted in 2020” for additional information. 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. These estimates and assumptions are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including the effects of the Coronavirus Disease 2019 (“COVID-19”) pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020, which provides a variety of provisions, including, among other things, a small business lending program to originate paycheck protection loans, temporary relief for the community bank leverage ratio, and temporary relief for community banks related to troubled debt restructurings. 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 financial condition and results of operations for the interim periods presented herein, have been included. Certain reclassifications of 2019 amounts have been made to conform to the 2020 presentation. Management has evaluated subsequent events for potential recognition or disclosure. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or any other period.

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity,

other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited balance sheets.

Accounting Guidance Adopted in 2020

FASB ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – On January 1, 2020, the Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet (“OBS”) credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar agreements). In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance, rather than as a write-down, on available-for-sale debt securities management does not intend to sell or believe that it is not more likely than not they will be required to sell.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and OBS credit exposures. Results for reporting periods beginning after December 31, 2019, are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to retained earnings of $7.2 million as of January 1, 2020 for the cumulative effect of adopting ASC 326.

The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”), previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2020, the amortized cost basis of the PCD assets was adjusted to reflect the addition of $4.2 million of allowance for credit losses (“ACL”) on loans. The noncredit discount of $2.9 million, based on the adjusted amortized cost basis, will be accreted into interest income at the effective interest rate as of January 1, 2020.

The following table illustrates the impact of ASC 326.


	January 1, 2020
(dollars in thousands)	As Reported Under ASC 326		Pre-ASC 326 Adoption		Impact of ASC 326 Adoption
Assets:
Loans
Commercial	$	1,056,986	$	1,055,185	$	1,801
Commercial real estate	1,528,119		1,526,504		1,615
Construction and land development	209,551		208,733		818
Residential real estate	570,882		568,291		2,591
Consumer	710,646		710,116		530
Lease Financing	332,581		332,581		—
Allowance for credit losses on loans	(40,811)		(28,028)		(12,783)
Liabilities:
Allowance for credit losses on unfunded commitments	(1,507)		(1,244)		(263)

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, fair value hedge accounting adjustments, and deferred loan fees and costs. Accrued interest receivable totaled $20.7 million at September 30, 2020 and was reported in accrued interest receivable on the consolidated balance sheets. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the effective yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued and the loan is placed on nonaccrual status at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Mortgage loans are charged off at 180 days past due, and commercial loans are charged off to the extent principal or interest is deemed uncollectible. Consumer

and credit card loans continue to accrue interest until they are charged off or at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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 approximately level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method.

Purchased Credit Deteriorated Loans

The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An ACL on loans is determined using the same methodology as other loans held for investment. The initial ACL on loans determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and ACL on loans becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the ACL on loans are recorded through provision expense.

Allowance for Credit Losses on Loans

The ACL on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the loan balance is confirmed to no longer be collectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, changes in unemployment rates, property values or relevant factors.

The Company considers the following when estimating credit losses: 1) available information relevant to assessing the collectability of cash flows including internal information, external information or a combination of both relating to past events, current conditions and reasonable and supportable forecasts; 2) relevant qualitative and quantitative factors relating to the environment in which the Bank operates and factors specific to the borrower; 3) off-balance-sheet credit exposures; and 4) credit enhancements.

ACL on loans is measured on a collective basis and reflects impairment in groups of loans aggregated on the basis of similar risk characteristics which may include any one or a combination of the following: internal credit ratings, risk ratings or classification, financial asset type, collateral type, size, industry of the borrower, historical or expected credit loss patterns, and reasonable and supportable forecast periods. The ACL for a specific portfolio segment is computed by multiplying the loss rate by the amortized cost balance of the segment. As appropriate, newer credit products or portfolios with limited historical loss may use applicable external data for determining the ACL until experience justifies that sufficient product maturity supports the estimate of expected credit losses.

Specific reserves reflect expected credit losses on loans identified for evaluation or individually considered nonperforming, including troubled debt restructurings and receivables where the Company has determined foreclosure is probable. These loans no longer have similar risk characteristics to collectively evaluated loans due to changes in credit risk, borrower circumstances, recognition of write-offs, or cash collections that have been fully applied to principal on the basis of nonaccrual policies. At a minimum, the population of loans subject to individual evaluation include individual loans and leases where it is probable we will be unable to collect all amounts due, according to the original contractual terms. These include, nonaccrual loans with an effective balance greater than $500,000, accruing loans 90 days past due or greater with an effective

balance greater than $100,000, specialty lending relationships and other loans as determined by management. ACL for consumer and residential loans are, primarily, determined by meaningful pools of similar loans and are evaluated on a quarterly basis.

The provision for credit losses on loans on individually evaluated loans is recognized on the basis of the present value of expected future cash flows discounted at the effective interest rate, the fair value of collateral adjusted for estimated costs to sell, or the observable market price as of the relevant date.

The table below identifies the Company’s loan portfolio segments and classes.


Segment			Class
Commercial			Commercial Commercial Other
Commercial Real Estate			Commercial Real Estate Non-Owner Occupied Commercial Real Estate Owner Occupied Multi-Family Farmland
Construction and Land Development			Construction and Land Development
Residential Real Estate			Residential First Lien Other Residential
Consumer			Consumer Consumer Other
Lease Financing			Lease Financing

The principal risks to each segment 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 nonperforming. As such, repayment of such loans is often more sensitive than other types of loans to adverse conditions in the general economy.

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

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

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

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

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

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. The Company applies the collateral-dependent practical expedient, to calculate the ACL on loans for an individually evaluated collateral-dependent loan by measuring the fair value of collateral at the reporting date, regardless of whether foreclosure is probable. Fair value of collateral is adjusted for costs to sell when repayment or satisfaction of the loan depends on the sale of the collateral. ACL on loans adjustments for estimated costs to sell are not appropriate when the repayment of the collateral-dependent loan is expected from the operation of the collateral.

Determining the Contractual Term

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

Troubled Debt Restructurings (“TDR”)

A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a TDR. The ACL on loans considered to be a TDR is measured using the same method as all other loans held for investment, except that the original interest rate is used to discount the expected cash flows, not the rate specified within the restructuring.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on OBS credit exposures is adjusted as a provision for credit loss expense included in other expense on the consolidated income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Expected utilization rates are compared to the current funded portion of the total commitment amount as a practical expedient for funded exposure at default.

Allowance for Credit Losses on Available-For-Sale Securities

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available for sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recorded in other comprehensive income.

Changes in the ACL are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

FASB ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" - Effective January 1, 2020, the Company adopted the provisions of ASU 2017-04 which simplifies goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit.

In the second quarter of 2020, the Company performed a Step 1 impairment analysis of its goodwill, as an unprecedented decline in economic conditions triggered by the COVID-19 pandemic caused a significant decline in stock market valuations, including our stock price. These events indicated that goodwill may be impaired. As a result of the analysis, we concluded that the Company's estimated fair value was greater than its book value and impairment of goodwill was not

required. The Company performed a Step 0 qualitative analysis as of August 31, accelerating its annual measurement date from the previous date of September 30. The Company concluded that its estimated fair value was greater than its book value and impairment of goodwill was not required. No events or circumstances since the August 31, 2020 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists.

FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – On January 1, 2020, the Company adopted the provision of ASU 2018-13, which modifies 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, the Company may disclose other quantitative information in lieu of the weighted average if we determine that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The adoption of this new guidance did not have a material impact on our consolidated financial statements.

DISPOSITIONS AND ACQUISITIONS	9 Months Ended
DISPOSITIONS AND ACQUISITIONS	Sep. 30, 2020
Business Combinations [Abstract]
DISPOSITIONS AND ACQUISITIONS	DISPOSITIONS AND ACQUISITIONS Commercial FHA Origination Platform On August 28, 2020, the Company announced that it had completed the sale of its commercial FHA origination platform to Dwight Capital, a nationwide mortgage banking firm headquartered in New York. The Bank will continue to service Love Funding’s current servicing portfolio of approximately $3.73 billion, which includes approximately $340.1 million in low-cost deposits. HomeStar Financial Group, Inc. On July 17, 2019, the Company completed its acquisition of HomeStar Financial Group, Inc. ("HomeStar"), and its wholly owned subsidiary, HomeStar Bank and Financial Services ("HomeStar Bank"), which operated five full-service banking centers in northern Illinois. In aggregate, 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 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 were expensed as incurred. As of July 17, 2020, the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of HomeStar, resulting in no material change to acquisition accounting adjustments.

INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

Investment Securities Available for Sale

Investment securities as of September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses on investments		Fair value
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	32,276	$	461	$	20	$	—	$	32,717
Mortgage-backed securities - agency	282,389		6,796		6		—		289,179
Mortgage-backed securities - non-agency	23,712		260		—		—		23,972
State and municipal securities	120,998		7,009		3		2		128,002
Corporate securities	136,652		1,375		1,760		306		135,961
Total available for sale securities	$	596,027	$	15,901	$	1,789	$	308	$	609,831


	December 31, 2019
(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses on investments	Fair value
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	59,600	$	442	$	22	N/A	$	60,020
Mortgage-backed securities - agency	321,840		3,368		234		N/A	324,974
Mortgage-backed securities - non-agency	17,198		3		53		N/A	17,148
State and municipal securities	119,371		5,195		11		N/A	124,555
Corporate securities	121,159		2,131		554		N/A	122,736
Total available for sale securities	$	639,168	$	11,139	$	874	N/A	$	649,433

The following is a summary of the amortized cost and fair value of the investment securities available for sale, by maturity, at September 30, 2020. 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 investment securities available for sale are based on final contractual maturity.


(dollars in thousands)	Amortized cost		Fair value
Investment securities available for sale
Within one year	$	28,407	$	28,730
After one year through five years	63,844		66,583
After five years through ten years	171,593		173,883
After ten years	26,082		27,484
Mortgage-backed securities	306,101		313,151
Total available for sale securities	$	596,027	$	609,831

Proceeds and gross realized gains and losses on sales on investment securities available for sale for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Investment securities available for sale
Proceeds from sales(1)	$	28,256	$	1,025	$	28,256	$	29,490
Gross realized gains on sales	1,721		25		1,721		151
Gross realized losses on sales	—		—		—		(190)

_____________________________________________________

(1)Proceeds from sales of investment securities available for sale as of September 30, 2020 were pending settlement.

The table below presents a rollforward by major security type for the three and nine months ended September 30, 2020 of the ACL on investment securities available for sale held at period end:


(dollars in thousands)	State and municipal securities		Corporate securities
Change in allowance for credit losses on investment securities for the three months ended September 30, 2020:
Balance, beginning of period	$	1	$	126

Additions	1		243
Reductions	—		(63)

Balance, end of period	$	2	$	306
Change in allowance for credit losses on investment securities for the nine months ended September 30, 2020:
Balance, beginning of period	$	—	$	—
Impact of adopting ASC 326	—		—
Additions	20		389
Reductions	(18)		(83)

Balance, end of period	$	2	$	306

Unrealized losses and fair values for investment securities available for sale as of September 30, 2020, for which an ACL has not been recorded, and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:


	September 30, 2020
	Less than 12 Months				12 Months or more				Total
(dollars in thousands)	Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	9,980	$	20	$	—	$	—	$	9,980	$	20
Mortgage-backed securities - agency	2,502		6		—		—		2,502		6

Corporate securities	27,916		868		—		—		27,916		868
Total available for sale securities	$	40,398	$	894	$	—	$	—	$	40,398	$	894


	December 31, 2019
	Less than 12 Months				12 Months or more				Total
(dollars in thousands)	Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss
Investment securities available for sale
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

For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and other market conditions, 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 September 30, 2020, 16 investment securities available for sale had unrealized losses with aggregate depreciation of 2.17% from their amortized cost basis. The unrealized losses related principally to the fluctuations in the current 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 intend to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery.

Equity Securities

Equity securities are recorded at fair value and totaled $9.1 million and $5.6 million at September 30, 2020 and December 31, 2019, respectively.

Proceeds and gross realized gains on sales of equity securities as well as net unrealized gains on equity securities for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Equity securities
Proceeds from sales	$	—	$	—	$	—	$	105
Gross realized gains on sales	—		—		—		78

Net unrealized gains	135		54		317		92

Net unrealized gains on equity securities were recorded as other income in the consolidated statements of income.

LOANS

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

LOANS

The following table presents total loans outstanding by portfolio class, as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Commercial:
Commercial	$	729,745	$	628,056
Commercial other	813,412		427,129
Commercial real estate:
Commercial real estate non-owner occupied	824,311		825,874
Commercial real estate owner occupied	442,692		464,601
Multi-family	149,290		146,795
Farmland	80,465		89,234
Construction and land development	177,894		208,733
Total commercial loans	3,217,809		2,790,422
Residential real estate:
Residential first lien	380,402		456,107
Other residential	90,427		112,184
Consumer:
Consumer	82,912		100,732
Consumer other	774,382		609,384
Lease financing	395,534		332,581
Total loans, gross	$	4,941,466	$	4,401,410

Total loans include net deferred loan fees of $3.9 million and $2.2 million at September 30, 2020 and December 31, 2019, respectively, and unearned income of $45.1 million and $39.6 million within the lease financing portfolio at September 30, 2020 and December 31, 2019, respectively.

At September 30, 2020, the Company had commercial real estate, residential real estate and consumer loans held for sale totaling $62.5 million compared to $16.4 million at December 31, 2019. During the three and nine months ended September 30, 2020, the Company sold commercial real estate, residential real estate and consumer loans with proceeds totaling $384.7 million and $855.0 million, respectively. During the three and nine months ended September 30, 2019, the Company sold commercial real estate, residential real estate and consumer loans with proceeds totaling $218.8 million and $761.7 million, respectively.

The aggregate loans outstanding to the Company’s directors, executive officers, principal shareholders and their affiliates totaled $20.6 million and $23.0 million at September 30, 2020 and December 31, 2019, respectively. The new loans, other additions, repayments and other reductions for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Beginning balance	$	23,806	$	24,473	$	22,989	$	26,536
New loans and other additions	17		143		2,559		3,205
Repayments and other reductions	(3,249)		(1,259)		(4,974)		(6,384)
Ending balance	$	20,574	$	23,357	$	20,574	$	23,357

The following table represents, by loan portfolio segment, a summary of changes in the ACL on loans for the three and nine months ended September 30, 2020 and 2019:


	Commercial Loan Portfolio						Other Loan Portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
Changes in allowance for credit losses on loans for the three months ended September 30, 2020:
Balance, beginning of period	$	12,213	$	20,296	$	1,512	$	4,830	$	2,087	$	6,155	$	47,093

Provision for credit losses on loans	6,513		4,518		534		(184)		422		(833)		10,970

Charge-offs	(913)		(3,462)		(250)		(101)		(307)		(628)		(5,661)
Recoveries	47		37		6		34		125		120		369
Balance, end of period	$	17,860	$	21,389	$	1,802	$	4,579	$	2,327	$	4,814	$	52,771

Changes in allowance for credit losses on loans for the nine months ended September 30, 2020:
Balance, beginning of period	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028
Impact of adopting ASC 326	2,327		4,104		724		1,211		(594)		774		8,546
Provision for credit losses on loans	9,132		18,661		233		226		994		3,903		33,149
Initial PCD Allowance	1,045		1,311		809		1,015		57		—		4,237
Charge-offs	(4,763)		(13,081)		(324)		(496)		(1,271)		(2,414)		(22,349)
Recoveries	88		122		70		124		499		257		1,160
Balance, end of period	$	17,860	$	21,389	$	1,802	$	4,579	$	2,327	$	4,814	$	52,771

Changes in allowance for credit losses on loans for the three months ended September 30, 2019:
Balance, beginning of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925
Provision for credit losses on loans	1,619		2,211		(13)		(101)		402		243		4,361
Charge-offs	(2,971)		(2,611)		—		(79)		(519)		(394)		(6,574)
Recoveries	16		854		3		39		165		128		1,205
Balance, end of period	$	8,779	$	9,093	$	306	$	2,283	$	2,267	$	2,189	$	24,917

Changes in allowance for credit losses on loans for the nine months ended September 30, 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for credit losses on loans	2,295		6,418		(35)		587		1,057		1,358		11,680
Charge-offs	(3,085)		(2,938)		(44)		(455)		(1,540)		(1,544)		(9,606)
Recoveries	45		890		13		110		596		286		1,940
Balance, end of period	$	8,779	$	9,093	$	306	$	2,283	$	2,267	$	2,189	$	24,917

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


	Commercial Loan Portfolio						Other Loan Portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
Allowance for credit losses on loans:
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 credit losses on loans	$	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

_______________________________________________________

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

The Company utilizes the Probability of Default (“PD”)/Loss Given Default (“LGD”) methodology in determining expected future credit losses. PD is the risk that the borrower will be unable or unwilling to repay its debt in full or on time. The risk of default is derived by analyzing the obligor’s capacity to repay the debt in accordance with contractual terms. PD is generally associated with financial characteristics such as inadequate cash flow to service debt, declining revenues or operating margins, high leverage, declining or marginal liquidity, and the inability to successfully implement a business plan. In addition to these quantifiable factors, the borrower’s willingness to repay also must be evaluated.

As a method for estimating the allowance, it is a form of migration analysis that combines the estimated probability of loans experiencing default events and the losses ultimately associated with the loans experiencing those defaults. The LGD component is the percentage of defaulted loan balance that is ultimately charged off. Multiplying one by the other gives the Company its loss rate, which is then applied to the loan portfolio balance to determine expected future losses.

Within the model, the LGD approach produces segmented LGD estimates using a loss curve methodology, which is based on historical net losses from charge-off and recovery information. The main principle of a loss curve model is that the loss follows a steady timing schedule based on how long the defaulted loan has been on the books.

The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2012 through the current period, on a monthly basis. When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data.

Historical data is evaluated in multiple components of the expected credit loss, including the reasonable and supportable forecast and the post-reversion period of each loan segment. The historical experience is used to infer probability of default and loss given default in the reasonable and supportable forecast period. In the post-reversion period, long-term average loss rates are segmented by loan pool.

Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit-related analytics as deemed appropriate. Management attempts to quantify qualitative reserves whenever possible.

For the initial implementation, the Company’s CECL estimate applied a 12-month forecast that incorporated macroeconomic trends (i.e., unemployment, real estate prices, etc.), political environment, and historical loss experience. Management also took into consideration forecast assumptions used in budgeting, capital planning and stress testing. These considerations influenced the selection of a 12-month period, combined with a 12-month reversion period, for a 24-month period before historic loss experience is applied to the expected loss estimate, consistently for every loan pool.

The Company segments the loan portfolio into pools based on the following risk characteristics: financial asset type, collateral type, loan characteristics, credit characteristics, outstanding loan balances, contractual terms and prepayment assumptions, industry of borrower and concentrations, historical or expected credit loss patterns, and reasonable and supportable forecast periods.

Within the PD segmentation, credit metrics are identified to further segment the financial assets. The Company utilizes risk ratings for the commercial portfolios and days past due for the consumer and the lease financing portfolios.

The Company has defined five transitioning risk states for each asset pool within the expected credit loss model. The below table illustrates the transition matrix:


Risk state	Commercial loans risk rating	Consumer loans and equipment finance loans and leases days past due
1	0-5	0-14
2	6	15-29
3	7	30-59
4	8	60-89
Default	9+ and nonaccrual	90+ and nonaccrual

Expected Credit Losses

In calculating expected credit losses, the Company individually evaluates loans on nonaccrual status and loans past due 90 days or more and still accruing interest. The following table presents amortized cost basis of individually evaluated loans on nonaccrual status as of September 30, 2020 and December 31, 2019:


	September 30, 2020				December 31, 2019
(dollars in thousands)	Nonaccrual		Nonaccrual with no allowance for credit loss		Nonaccrual		Nonaccrual with no allowance for credit loss
Commercial:
Commercial	$	2,844	$	380	$	1,492	$	119
Commercial other	1,558		—		4,351		1,519
Commercial real estate:
Commercial real estate non-owner occupied	12,852		7,277		10,915		4,572
Commercial real estate owner occupied	14,044		9,563		4,396		2,648
Multi-family	10,331		2,325		6,231		1,430
Farmland	—		—		200		150
Construction and land development	7,214		5,035		1,304		1,245
Total commercial loans	48,843		24,580		28,889		11,683
Residential real estate:
Residential first lien	8,720		845		6,140		2,416
Other residential	2,339		—		1,656		912
Consumer:
Consumer	392		—		341		7

Lease financing	2,691		—		1,375		116
Total loans	$	62,985	$	25,425	$	38,401	$	15,134

During the first quarter of 2020, as part of the adoption of CECL, $9.8 million of PCD loans were reclassified to nonaccrual loans.

There was no interest income recognized on nonaccrual loans during the three and nine months ended September 30, 2020 and 2019 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 $636,000 and $2.6 million for the three and nine months ended September 30, 2020, respectively. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $532,000 and $1.9 million for the three and nine months ended September 30, 2019, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $17,000 and $46,000 for the three and nine months ended September 30, 2020, respectively, and $26,000 and $89,000 for the comparable periods in 2019, respectively.

Collateral Dependent Financial Assets

A collateral dependent financial loan relies solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with a loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of protection provided by the cash flow and value of any underlying collateral. However, as other sources of repayment become inadequate over time, the significance of the collateral’s value increases and the loan may become collateral dependent.

The table below presents the value of collateral dependent loans by loan class as of September 30, 2020:


(dollars in thousands)	September 30, 2020


Commercial real estate:
Commercial real estate non-owner occupied	$	8,389
Commercial real estate owner occupied	824
Multi-family	10,196
Construction and land development	5,032


Total collateral dependent loans	$	24,441

The aging status of the recorded investment in loans by portfolio as of September 30, 2020 was as follows:


	Accruing Loans
(dollars in thousands)	30-59 days past due		60-89 days past due		Past due 90 days or more		Total past due		Nonaccrual		Current		Total
Commercial:
Commercial	$	469	$	232	$	—	$	701	$	2,844	$	726,200	$	729,745
Commercial Other	4,046		2,409		906		7,361		1,558		804,493		813,412
Commercial real estate:
Commercial real estate non-owner occupied	2,990		306		—		3,296		12,852		808,163		824,311
Commercial real estate owner occupied	2,157		—		—		2,157		14,044		426,491		442,692
Multi-family	62		—		—		62		10,331		138,897		149,290
Farmland	90		—		—		90		—		80,375		80,465
Construction and land development	205		131		—		336		7,214		170,344		177,894
Total commercial loans	10,019		3,078		906		14,003		48,843		3,154,963		3,217,809
Residential real estate:
Residential first lien	—		572		402		974		8,720		370,708		380,402
Other residential	612		33		—		645		2,339		87,443		90,427
Consumer:
Consumer	248		19		—		267		392		82,253		82,912
Consumer Other	5,272		3,283		—		8,555		—		765,827		774,382
Lease financing	3,777		1,275		497		5,549		2,691		387,294		395,534
Total loans	$	19,928	$	8,260	$	1,805	$	29,993	$	62,985	$	4,848,488	$	4,941,466

The aging status of the recorded investment in loans by portfolio (excluding PCI) as of December 31, 2019 was as follows:


	Accruing Loans
(dollars in thousands)	30-59 days past due		60-89 days past due		Past due 90 days or more		Total past due		Nonaccrual		Current		Total
Commercial	$	5,910	$	3,086	$	—	$	8,996	$	5,843	$	1,037,268	$	1,052,107
Commercial real estate	2,895		399		—		3,294		21,742		1,481,361		1,506,397
Construction and land development	1,539		72		—		1,611		1,304		200,141		203,056
Residential real estate	588		1,561		145		2,294		7,796		545,564		555,654
Consumer	6,701		4,154		—		10,855		341		697,708		708,904
Lease financing	1,783		1,188		218		3,189		1,375		328,017		332,581
Total loans (excluding PCI)	$	19,416	$	10,460	$	363	$	30,239	$	38,401	$	4,290,059	$	4,358,699

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 CARES Act provides all banks with the option to elect either or both of the following from March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the termination of the national emergency declared by President Trump on March 13, 2020:

(i) to suspend the requirements under GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR; and/or

(ii) to suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

If a bank elects, which the Bank has, a suspension noted above, the suspension (i) will be effective for the term of the loan modification, but solely with respect to any modification, including a forbearance arrangement, an interest rate modification, a repayment plan, and any other similar arrangement that defers or delays the payment of principal or interest, that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019; and (ii) will not apply to any adverse impact on the credit of a borrower that is not related to the COVID–19 pandemic.

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 as of September 30, 2020 and December 31, 2019:


	September 30, 2020						December 31, 2019 (3)
(dollars in thousands)	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	447	$	610	$	1,057	$	435	$	369	$	804
Commercial real estate	874		4,879		5,753		1,720		9,834		11,554
Construction and land development	40		977		1,017		45		167		212
Residential real estate	1,264		3,565		4,829		1,083		1,993		3,076
Consumer	28		—		28		35		—		35
Lease financing	—		42		42		—		55		55
Total loans	$	2,653	$	10,073	$	12,726	$	3,318	$	12,418	$	15,736

________________________________________________________

(1)These loans are still accruing interest.

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

(3)TDRs as of December 31, 2019 exclude PCI loans.

The ACL on TDRs totaled $1.2 million and $2.0 million at September 30, 2020 and December 31, 2019, respectively. The Company had no unfunded commitments in connection with TDRs at September 30, 2020 nor December 31, 2019.

The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2020 and 2019. There were no loans modified as TDRs within the previous twelve months that subsequently defaulted during the three or nine months ended September 30, 2020 or the three or nine months ended September 30, 2019:


	Commercial loan portfolio						Other loan portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
For the three months ended September 30, 2020
Troubled debt restructurings:
Number of loans	—		2		1		9		2		—		14
Pre-modification outstanding balance	$	—	$	164	$	526	$	1,037	$	9	$	—	$	1,736
Post-modification outstanding balance	—		129		494		1,025		9		—		1,657




For the nine months ended September 30, 2020
Troubled debt restructurings:
Number of loans	2		4		3		20		2		—		31
Pre-modification outstanding balance	$	432	$	797	$	1,010	$	2,055	$	9	$	—	$	4,303
Post-modification outstanding balance	429		735		966		1,928		9		—		4,067




For the three months ended September 30, 2019
Troubled debt restructurings:
Number of loans	—		—		1		7		—		—		8
Pre-modification outstanding balance	$	—	$	—	$	159	$	361	$	—	$	—	$	520
Post-modification outstanding balance	—		—		155		347		—		—		502




For the nine months ended For the nine months ended September 30, 2019
Troubled debt restructurings:
Number of loans	1		3		2		16		2		—		24
Pre-modification outstanding balance	$	249	$	1,924	$	221	$	691	$	15	$	—	$	3,100
Post-modification outstanding balance	249		1,837		170		664		8		—		2,928

The outstanding balance of modifications made as a result of COVID-19, that were not considered TDRs, totaled $279.3 million at September 30, 2020.

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.

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

Loans in the commercial loan portfolio tend to be larger and more complex than those in the other loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship

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

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

Credit Quality Indicators

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

The Company considers all loans with Risk Grades of 1 – 6 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans with Risk Grades of 7 are considered “watch credits” categorized as special mention 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. Risk Grade 8 is categorized as substandard, 9 as substandard – nonaccrual and 10 as doubtful. 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 tables present the recorded investment of the commercial loan portfolio by risk category as of September 30, 2020 and December 31, 2019:


			September 30, 2020
			Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)			2020		2019		2018		2017		2016		Prior		Revolving loans		Total
Commercial	Commercial	Acceptable credit quality	$	85,245	$	104,496	$	36,765	$	42,402	$	28,848	$	55,073	$	329,667	$	682,496
		Special mention	326		3,208		5,610		165		647		4,155		14,395		28,506
		Substandard	—		297		1,361		19		291		4,653		9,211		15,832
		Substandard – nonaccrual	—		7		140		990		183		423		1,101		2,844
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		67		—		—		—		—		—		67
		Subtotal	85,571		108,075		43,876		43,576		29,969		64,304		354,374		729,745

	Commercial other	Acceptable credit quality	458,131		182,184		63,581		865		505		831		93,739		799,836
		Special mention	152		302		560		37		68		—		2,651		3,770
		Substandard	230		124		660		4		34		—		6,860		7,912
		Substandard – nonaccrual	270		1,088		191		—		3		—		6		1,558
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	240		96		—		—		—		—		—		336
		Subtotal	459,023		183,794		64,992		906		610		831		103,256		813,412

Commercial real estate	Non-owner occupied	Acceptable credit quality	71,791		110,858		70,537		111,386		119,283		174,832		9,286		667,973
		Special mention	—		20,073		3,332		10,377		10,489		21,382		—		65,653
		Substandard	7,475		5,533		14,096		5,596		12,433		32,408		250		77,791
		Substandard – nonaccrual	—		300		234		3,241		3,448		5,629		—		12,852
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	42		—		—		—		—		—		—		42
		Subtotal	79,308		136,764		88,199		130,600		145,653		234,251		9,536		824,311

	Owner occupied	Acceptable credit quality	48,819		55,658		38,548		57,512		69,572		109,261		4,348		383,718
		Special mention	1,384		4,067		1,157		4,196		1,318		16,547		—		28,669
		Substandard	540		357		796		766		4,616		8,809		377		16,261
		Substandard – nonaccrual	388		197		170		244		—		12,645		400		14,044
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	51,131		60,279		40,671		62,718		75,506		147,262		5,125		442,692

	Multi-family	Acceptable credit quality	8,641		7,752		20,919		28,778		18,592		27,689		693		113,064
		Special mention	468		—		7,625		—		—		1,781		—		9,874
		Substandard	—		10,982		1,000		—		3,964		75		—		16,021
		Substandard – nonaccrual	—		—		—		—		7,879		2,452		—		10,331
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	9,109		18,734		29,544		28,778		30,435		31,997		693		149,290

	Farmland	Acceptable credit quality	12,520		8,362		4,112		9,628		7,321		26,866		2,542		71,351
		Special mention	204		111		181		38		1,158		1,089		—		2,781
		Substandard	2,109		313		812		409		18		2,285		387		6,333
		Substandard – nonaccrual	—		—		—		—		—		—		—		—
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	14,833		8,786		5,105		10,075		8,497		30,240		2,929		80,465

Construction and land development		Acceptable credit quality	23,098		84,245		13,596		3,678		2,570		7,754		16,554		151,495
		Special mention	1,386		10,823		458		—		—		9		—		12,676
		Substandard	—		696		—		—		—		915		—		1,611
		Substandard – nonaccrual	—		244		—		2,094		154		4,722		—		7,214
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	431		4,467		—		—		—		—		—		4,898
		Subtotal	24,915		100,475		14,054		5,772		2,724		13,400		16,554		177,894

Total
		Acceptable credit quality	708,245		553,555		248,058		254,249		246,691		402,306		456,829		2,869,933
		Special mention	3,920		38,584		18,923		14,813		13,680		44,963		17,046		151,929
		Substandard	10,354		18,302		18,725		6,794		21,356		49,145		17,085		141,761
		Substandard – nonaccrual	658		1,836		735		6,569		11,667		25,871		1,507		48,843
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	713		4,630		—		—		—		—		—		5,343
Total commercial loans			$	723,890	$	616,907	$	286,441	$	282,425	$	293,394	$	522,285	$	492,467	$	3,217,809


	December 31, 2019
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Total
Acceptable credit quality	$	1,005,442	$	1,398,400	$	194,992	$	2,598,834
Special mention	17,435		18,450		2,420		38,305
Substandard	23,387		67,805		1,250		92,442
Substandard – nonaccrual	5,843		21,742		1,304		28,889
Doubtful	—		—		—		—
Not graded	—		—		3,090		3,090
Total (excluding PCI)	$	1,052,107	$	1,506,397	$	203,056	$	2,761,560

The Company evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, 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 nonperforming for purposes of credit quality evaluation. The following tables present the recorded investment of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming as of September 30, 2020 and December 31, 2019:


			September 30, 2020
			Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)			2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
Residential real estate	Residential first lien	Performing	$	24,789	$	27,808	$	54,228	$	108,493	$	91,674	$	63,049	$	505	$	370,546
		Nonperforming	—		201		772		963		718		7,202		—		9,856
		Subtotal	24,789		28,009		55,000		109,456		92,392		70,251		505		380,402

	Other residential	Performing	699		2,715		3,642		2,341		1,510		2,043		74,608		87,558
		Nonperforming	—		14		22		165		8		176		2,484		2,869
		Subtotal	699		2,729		3,664		2,506		1,518		2,219		77,092		90,427

Consumer	Consumer	Performing	22,404		16,063		19,008		10,488		7,047		4,858		2,624		82,492
		Nonperforming	7		13		46		91		76		185		2		420
		Subtotal	22,411		16,076		19,054		10,579		7,123		5,043		2,626		82,912

	Consumer other	Performing	518,726		193,439		27,724		7,315		6,143		2,823		18,212		774,382
		Nonperforming	—		—		—		—		—		—		—		—
		Subtotal	518,726		193,439		27,724		7,315		6,143		2,823		18,212		774,382

Leases financing		Performing	137,546		134,196		76,511		25,241		16,437		2,415		—		392,346
		Nonperforming	480		452		1,581		374		209		92		—		3,188
		Subtotal	138,026		134,648		78,092		25,615		16,646		2,507		—		395,534

Total
		Performing	704,164		374,221		181,113		153,878		122,811		75,188		95,949		1,707,324
		Nonperforming	487		680		2,421		1,593		1,011		7,655		2,486		16,333
Total other loans			$	704,651	$	374,901	$	183,534	$	155,471	$	123,822	$	82,843	$	98,435	$	1,723,657


	December 31, 2019
(dollars in thousands)	Residential real estate		Consumer		Lease financing		Total
Performing	$	546,630	$	708,528	$	330,988	$	1,586,146
Nonperforming	9,024		376		1,593		10,993
Total (excluding PCI)	$	555,654	$	708,904	$	332,581	$	1,597,139

PREMISES AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT, NET

A summary of premises and equipment as of September 30, 2020 and December 31, 2019 is as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Land	$	16,158	$	19,123
Buildings and improvements	66,067		77,296
Furniture and equipment	32,475		31,846
Total	114,700		128,265
Accumulated depreciation	(39,733)		(37,210)
Premises and equipment, net	$	74,967	$	91,055

Depreciation expense of $2.2 million and $5.5 million was recorded for the three and nine months ended September 30, 2020, respectively, and $1.8 million and $4.9 million for the comparable periods in 2019, respectively.

In September 2020, the Company announced a series of planned branch and corporate office reductions as part of our ongoing efforts to enhance efficiencies and financial performance. As part of these reductions, we will close or consolidate 13 branches and vacate approximately 23,000 square feet of corporate office space by the end of 2020. As a result of this plan, the Company recorded $12.7 million of asset impairment on existing bank facilities and corporate offices, which was recognized in other expense in the consolidated statements of income, and reclassified $2.3 million of branch and corporate office related assets as held for sale from premises and equipment, net to other assets on the consolidated balance sheet as of September 30, 2020.

LEASES

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

LEASES

The Company has operating leases for banking centers and operating facilities. Our leases have remaining lease terms of 1 month to 13 years, some of which may include options to extend the lease terms for up to an additional 10 years. The options to extend are included if they are reasonably certain to be exercised.

The Company had operating lease right-of-use assets of $9.5 million and $14.2 million as of September 30, 2020 and December 31, 2019, respectively and operating lease liabilities of $12.4 million and $15.4 million at the same dates, respectively.

Information related to operating leases for the three and nine months ended September 30, 2020 and 2019 was as follows:



(dollars in thousands)	Three Months Ended September 30, 2020			Nine Months Ended September 30, 2020
Operating lease cost	$	883		$	2,453
Operating cash flows from leases	942			2,669
Right-of-use assets obtained in exchange for lease obligations	96			1,536
Right-of-use assets derecognized due to terminations or impairment	(4,440)			(4,453)
Weighted average remaining lease term	8.3 years			8.3 years
Weighted average discount rate	2.89		%	2.89		%



(dollars in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	835		$	2,250
Operating cash flows from leases	887			2,370
Right-of-use assets obtained in exchange for lease obligations	6,434			18,715
Weighted average remaining lease term	8.4 years			8.4 years
Weighted average discount rate	2.98		%	2.98		%

The projected minimum rental payments under the terms of the leases as of September 30, 2020 were as follows:


(dollars in thousands)	Amount
Year ending December 31:
2020 remaining	$	394
2021	2,346
2022	2,189
2023	1,900
2024	1,545
Thereafter	5,686
Total future minimum lease payments	14,060
Less imputed interest	(1,632)
Total operating lease liabilities	$	12,428

LOAN SERVICING RIGHTS

9 Months Ended

Sep. 30, 2020

Transfers and Servicing [Abstract]

LOAN SERVICING RIGHTS

Commercial FHA Mortgage Loan Servicing

The Company serviced commercial FHA mortgage loans for others with unpaid principal balances of $3.73 billion and $4.08 billion at September 30, 2020 and December 31, 2019, respectively. Changes in our commercial FHA loan servicing rights for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Loan servicing rights:
Balance, beginning of period	$	56,751	$	56,462	$	57,637	$	56,252
Originated servicing	341		526		998		2,089
Amortization	(814)		(684)		(2,357)		(2,037)
Balance, end of period	$	56,278	$	56,304	$	56,278	$	56,304
Valuation allowances:
Balance, beginning of period	$	13,519	$	2,271	$	4,944	$	2,805
Impairment	1,418		1,060		9,993		1,085
Recapture	—		—		—		(559)
Balance, end of period	$	14,937	$	3,331	$	14,937	$	3,331
Loan servicing rights, net	$	41,341	$	52,973	$	41,341	$	52,973
Fair value:
At beginning of period	$	43,232	$	54,191	$	52,693	$	53,447
At end of period	$	41,341	$	52,973	$	41,341	$	52,973

The fair value of commercial FHA loan servicing rights is determined using key assumptions, representing both general economic and other published information, including the assumed earnings rates related to escrow and replacement reserves, and the weighted average characteristics of the commercial portfolio, including the prepayment rate and discount rate. The prepayment rate considers 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. The weighted average prepayment rate was 8.18% and

8.20% at September 30, 2020 and December 31, 2019, respectively, while the weighted average discount rate was 11.45% and 11.02% for the same periods, respectively.

United States Small Business Administration (“SBA”) Loan Servicing

At September 30, 2020 and December 31, 2019, the Company serviced SBA loans for others with unpaid principal balances of $48.3 million and $48.2 million, respectively. At both September 30, 2020 and 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 September 30, 2020 and December 31, 2019, the Company serviced residential mortgage loans for others with unpaid principal balances of $384.2 million and $381.6 million, respectively. At September 30, 2020 and December 31, 2019, total residential mortgage servicing rights of $1.3 million and $2.0 million, respectively, are reflected in mortgage servicing rights held for sale in the consolidated balance sheet.

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill by segment at September 30, 2020 and December 31, 2019 is summarized as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Banking	$	157,158	$	156,120
Commercial FHA origination and servicing	—		10,892
Wealth management	4,746		4,746
Total goodwill	$	161,904	$	171,758

On August 28, 2020, the Company announced that it had completed the sale of its commercial FHA origination platform to Dwight Capital, a nationwide mortgage banking firm headquartered in New York. The Company will continue to service its current servicing portfolio of approximately $3.73 billion. As a result of this sale, the $10.9 million of goodwill recorded at the Commercial FHA origination and servicing segment was derecognized.

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of September 30, 2020 and December 31, 2019 are summarized as follows:


	September 30, 2020						December 31, 2019
(dollars in thousands)	Gross carrying amount		Accumulated amortization		Total		Gross carrying amount		Accumulated amortization		Total
Core deposit intangibles	$	57,012	$	(34,737)	$	22,275	$	57,012	$	(30,674)	$	26,338
Customer relationship intangibles	14,071		(6,408)		7,663		14,071		(5,523)		8,548
Total intangible assets	$	71,083	$	(41,145)	$	29,938	$	71,083	$	(36,197)	$	34,886

Amortization of intangible assets was $1.6 million and $4.9 million for the three and nine months ended September 30, 2020, respectively, and $1.8 million and $5.3 million for the comparable periods in 2019, respectively.

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

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

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

The Company issues interest rate lock commitments on originated fixed-rate commercial and residential real estate loans to be sold. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities

are included in other assets or other liabilities in the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount and estimated fair values at September 30, 2020 and December 31, 2019:


	Notional amount				Fair value gain
(dollars in thousands)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Derivative instruments (included in other assets):
Interest rate lock commitments	$	214,403	$	222,654	$	2,996	$	3,350
Forward commitments to sell mortgage-backed securities	153,864		221,052		—		—
Total	$	368,267	$	443,706	$	2,996	$	3,350


	Notional amount				Fair value loss
(dollars in thousands)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Derivative instruments (included in other liabilities):
Forward commitments to sell mortgage-backed securities	$	45,613	$	—	$	74	$	—

During the three and nine months ended September 30, 2020 the Company recognized net losses of $1.7 million and $428,000, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

During the three and nine months ended September 30, 2019, the Company recognized net gains of $513,000 and net losses of $188,000, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Cash Flow Hedges

In the second quarter of 2020, the Company entered into interest rate swap agreements, which qualify as cash flow hedges, to manage the risk of changes in future cash flows due to interest rate fluctuations. These derivative financial instruments at September 30, 2020 consisted of $100.0 million notional amount of receive-fixed, pay-variable interest rate swaps on certain Federal Home Loan Bank (“FHLB”) advances. The interest rate swaps have an average remaining life of 5.5 years, a weighted average pay rate of 0.57% and a weighted average receive rate of 0.23%. In addition, the Company has entered into $140.0 million notional amount of future starting receive-fixed, pay-variable interest rate swaps on certain FHLB or other fixed-rate advances. These swaps are effective beginning in April 2023. The Company pays or receives the net interest amount quarterly based on the respective hedge agreement and includes the amount as part of FHLB advances interest expense on the consolidated statements of income.

Quarterly, the effectiveness evaluation is based on the fluctuation of the interest the Company pays to the FHLB for the debt as compared to the three-month London Inter-bank Offered Rate ("LIBOR") interest received from the counterparty. At September 30, 2020, the $1.1 million fair value of the cash flow hedges was included in other liabilities in the consolidated balance sheets. The tax effected amount of $812,000 was included in accumulated other comprehensive income. There were no amounts recorded in the consolidated statements of income for the three or nine months ended September 30, 2020, related to ineffectiveness.

Interest Rate Swap Contracts not Designated as Hedges

The Company entered into interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity. The swaps are offset by contracts simultaneously purchased by the Company from other financial dealer institutions with equal and offsetting terms. Because of the equal and offsetting 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 the customer derivative instruments and the offsetting counterparty derivative instruments were $8.6 million and $9.0 million at September 30, 2020 and December 31, 2019, respectively. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $899,000 and $306,000 at September 30, 2020 and December 31, 2019, respectively, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.

DEPOSITS

9 Months Ended

Sep. 30, 2020

Deposits [Abstract]

DEPOSITS

The following table summarizes the classification of deposits as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Noninterest-bearing demand	$	1,355,188	$	1,019,472
Interest-bearing:
Checking	1,581,216		1,342,788
Money market	826,454		787,662
Savings	580,748		522,456
Time	685,130		871,876
Total deposits	$	5,028,736	$	4,544,254

SHORT-TERM BORROWINGS

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

SHORT-TERM BORROWINGS

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of September 30, 2020 and December 31, 2019:


	Repurchase agreements
(dollars in thousands)	September 30, 2020			December 31, 2019
Outstanding at period-end	$	58,625		$	82,029
Average amount outstanding	59,592			121,168
Maximum amount outstanding at any month end	77,136			138,907
Weighted average interest rate:
During period	0.35		%	0.69		%
End of period	0.14		%	0.67		%

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 $72.0 million and $87.4 million at September 30, 2020 and December 31, 2019, respectively, were pledged for securities sold under agreements to repurchase.

The Company had available lines of credit of $52.7 million and $21.6 million at September 30, 2020 and December 31, 2019, 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 $66.4 million and $24.3 million at September 30, 2020 and December 31, 2019, respectively. There were no outstanding borrowings at September 30, 2020 and December 31, 2019.

At September 30, 2020, the Company had PPP loans available to be pledged to the Paycheck Protection Program Liquidity Facility (“Facility”) that would allow the Company to borrow up to $250.0 million. However, no PPP loans were pledged as of September 30, 2020. Under the Facility, the Company can pledge its PPP loans to the Federal Reserve Bank as collateral for available advances. PPP loans pledged as collateral to secure extensions of credit under the Facility are valued at the principal amount of the PPP loan.

At September 30, 2020, the Company had available federal funds lines of credit totaling $20.0 million. These lines of credit were unused at September 30, 2020.

FHLB ADVANCES AND OTHER BORROWINGS

9 Months Ended

Sep. 30, 2020

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

The following table summarizes our FHLB advances and other borrowings as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Midland States Bancorp, Inc.
Series G redeemable preferred stock - 181 shares at $1,000 per share	$	181	$	181
Midland States Bank
FHLB advances – fixed rate, fixed term of $128.5 million and $28.1 million, at rates averaging 0.71% and 2.56% at September 30, 2020 and December 31, 2019, respectively – maturing through June 2023	128,459		28,130
FHLB advances – putable fixed rate of $565.0 million and $465.0 million, at rates averaging 2.02% and 2.34% at September 30, 2020 and December 31, 2019, respectively – maturing through February 2030 with call provisions through August 2021	565,000		465,000
Total FHLB advances and other borrowings	$	693,640	$	493,311

The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $1.90 billion and $1.94 billion at September 30, 2020 and December 31, 2019, respectively.

SUBORDINATED DEBT

9 Months Ended

Sep. 30, 2020

Subordinated Borrowings [Abstract]

SUBORDINATED DEBT

The following table summarizes the Company’s subordinated debt as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Subordinated debt issued June 2015 – fixed interest rate of 6.00% through June 18, 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $31,075 and $38,325 at September 30, 2020 and December 31, 2019, respectively - maturing June 18, 2025	$	31,075	$	38,273
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $550 - maturing June 18, 2025	545		544
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	39,545		39,496
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	71,721		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	26,816		26,791
Total subordinated debt	$	169,702	$	176,653

During the first quarter of 2020, the Company repurchased $7.3 million of the $38.3 million subordinated debentures issued in June 2015 with a fixed interest rate of 6.00% for the first five years, and a floating rate of interest equivalent to the three-month LIBOR plus 435 basis points thereafter. The Company recognized losses of $193,000 on the repurchase, which included the premium paid for the repurchase and the remaining unamortized debt issuance costs on the repurchase, in other noninterest expense in the consolidated statements of income.

The subordinated debentures may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHAREEarnings per share are calculated utilizing the two-class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the

weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. The diluted earnings per share computation for the three and nine months ended September 30, 2020 excluded antidilutive stock options of 595,660 and 492,443, respectively, and 91,943 for both of the comparable periods in 2019, because the exercise prices of these stock options exceeded the average market prices of the Company’s common shares for those respective periods. Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands, except per share data)	2020		2019		2020		2019
Net income	$	86	$	12,655	$	14,204	$	42,992
Preferred dividends declared	—		(26)		—		(191)
Preferred stock, premium amortization	—		48		—		145
Net income available to common shareholders	86		12,677		14,204		42,946
Common shareholder dividends	(6,047)		(5,914)		(18,732)		(17,481)
Unvested restricted stock award dividends	(64)		(48)		(194)		(144)
Undistributed earnings to unvested restricted stock awards	—		(52)		—		(202)
Undistributed earnings to common shareholders	$	(6,025)	$	6,663	$	(4,722)	$	25,119
Basic
Distributed earnings to common shareholders	$	6,047	$	5,914	$	18,732	$	17,481
Undistributed earnings to common shareholders	(6,025)		6,663		(4,722)		25,119
Total common shareholders earnings, basic	$	22	$	12,577	$	14,010	$	42,600
Diluted
Distributed earnings to common shareholders	$	6,047	$	5,914	$	18,732	$	17,481
Undistributed earnings to common shareholders	(6,025)		6,663		(4,722)		25,119
Total common shareholders earnings	22		12,577		14,010		42,600
Add back:
Undistributed earnings reallocated from unvested restricted stock awards	—		1		—		2
Total common shareholders earnings, diluted	$	22	$	12,578	$	14,010	$	42,602
Weighted average common shares outstanding, basic	22,937,837		24,488,422		23,567,000		24,190,574
Options	—		196,107		11,518		209,489
Weighted average common shares outstanding, diluted	22,937,837		24,684,529		23,578,518		24,400,063
Basic earnings per common share	$	0.00	$	0.51	$	0.59	$	1.76
Diluted earnings per common share	0.00		0.51		0.59		1.75

FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

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

Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis as of September 30, 2020 and December 31, 2019, are summarized below:


	September 30, 2020
(dollars in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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	$	32,717	$	—	$	32,717	$	—
Mortgage-backed securities - agency	289,179		—		289,179		—
Mortgage-backed securities - non-agency	23,972		—		23,972		—
State and municipal securities	128,002		—		128,002		—
Corporate securities	135,961		—		135,001		960
Equity securities	9,143		—		9,143		—
Loans held for sale	62,500				62,500		—
Interest rate lock commitments	2,996		—		2,996		—
Interest rate swap contracts	899		—		899		—
Total	$	685,369	$	—	$	684,409	$	960
Liabilities
Forward commitments to sell mortgage-backed securities	$	74	$	—	$	74	$	—
Interest rate swap contracts	2,019		—		2,019		—
Total	$	2,093	$	—	$	2,093	$	—

Assets measured at fair value on a non-recurring basis:
Loan servicing rights	$	42,465	$	—	$	—	$	42,465
Mortgage servicing rights held for sale	1,308		—		—		1,308
Nonperforming loans	26,596		—		26,596		—
Other real estate owned	3,287		—		3,287		—
Assets held for sale	4,585		—		4,585		—


	December 31, 2019
(dollars in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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
Nonperforming loans	14,693		—		12,518		2,175
Assets held for sale	3,974		—		3,974		—

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 three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Balance, beginning of period	$	921	$	935	$	955	$	1,923
Total realized in earnings (1)	—		6		8		48
Total unrealized in other comprehensive income (2)	39		(7)		5		5
Net settlements (principal and interest)	—		(6)		(8)		(1,048)
Balance, end of period	$	960	$	928	$	960	$	928

________________________________________________________________

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

(2)Represents change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period.

The following table provides quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured at fair value on a recurring basis at September 30, 2020 and December 31, 2019:

(dollars in thousands)

Fair value

Valuation
technique

Unobservable
input / assumptions

Range (weighted average)(1)

September 30, 2020

Corporate securities

960

Consensus pricing

Net market price

(2.5)% - 2.5% (0%)

December 31, 2019

Corporate securities

955

Consensus pricing

Net market price

(2.0)% - 2.5% (1.5%)

___________________________________________________________________

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

The significant unobservable inputs used in the fair value measurement of the Company’s corporate securities is net market price. The corporate securities are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. Significant changes in any of the inputs in isolation would result in a significant change to the fair value measurement. Generally, net market price increases when market interest rates decline and declines when market interest rates increase.

The following table presents gains (losses) recognized on assets measured on a nonrecurring basis for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Loan servicing rights	$	(1,418)	$	(1,060)	$	(9,993)	$	(526)
Mortgage servicing rights held for sale	(188)		70		(1,075)		585
Nonperforming loans	(5,467)		(6,187)		(21,681)		(8,420)
Other real estate owned	(25)		—		(1,282)		(16)
Assets held for sale	(10,197)		(3,139)		(10,403)		(3,139)
Total gains (losses) on assets measured on a nonrecurring basis	$	(17,295)	$	(10,316)	$	(44,434)	$	(11,516)

The following tables present quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured on a nonrecurring basis at September 30, 2020 and December 31, 2019:

(dollars in thousands)

Fair value

Valuation
technique

Unobservable
input / assumptions

Range (weighted average)(1)

September 30, 2020

Loan servicing rights:

Commercial

41,341

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.18%)

Discount rate

10.00% - 27.00% (11.45%)

SBA

1,124

Discounted cash flow

Prepayment speed

8.31% - 9.21% (8.60%)

Discount rate

No range (11.70%)

MSR held for sale

1,308

Discounted cash flow

Prepayment speed

13.44% - 26.28% (20.28%)

Discount rate

9.00% - 11.50% (10.13%)

December 31, 2019

Loan servicing rights:

Commercial

52,693

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.20%)

Discount rate

10.00% - 14.00% (11.02%)

SBA

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:

Nonperforming loans

2,175

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.22%)

age of appraisal and current status

_____________________________________________________________

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Loan Servicing Rights. In accordance with GAAP, the Company must record 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 loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are estimated based on current market conditions. The determination of fair value of servicing rights relies upon Level 3 inputs.

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

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

The Company has elected the fair value option for newly originated commercial and residential loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option

to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.

The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of September 30, 2020 and December 31, 2019:


	September 30, 2020						December 31, 2019
(dollars in thousands)	Aggregate fair value		Difference		Contractual principal		Aggregate fair value		Difference		Contractual principal
Commercial loans held for sale	$	8,610	$	167	$	8,443	$	8,236	$	206	$	8,030
Residential loans held for sale	19,629		1,044		18,585		8,195		446		7,749
Consumer loans held for sale	34,261		—		34,261		—		—		—
Total loans held for sale	$	62,500	$	1,211	$	61,289	$	16,431	$	652	$	15,779

The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Commercial loans held for sale	$	(156)	$	(169)	$	(38)	$	(463)
Residential loans held for sale	(114)		52		555		33
Total loans held for sale	$	(270)	$	(117)	$	517	$	(430)

The carrying values and estimated fair value of certain financial instruments not carried at fair value at September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
(dollars in thousands)	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Cash and due from banks	$	459,473	$	459,473	$	459,473	$	—	$	—
Federal funds sold	1,723		1,723		1,723		—		—
Nonmarketable equity securities	50,765		50,765		—		50,765		—
Loans, net	4,888,695		4,954,066		—		—		4,954,066
Accrued interest receivable	25,061		25,061		—		25,061		—

Liabilities
Deposits	$	5,028,736	$	5,038,033	$	—	$	5,038,033	$	—
Short-term borrowings	58,625		58,625		—		58,625		—
FHLB and other borrowings	693,640		729,192		—		729,192		—
Subordinated debt	169,702		175,392		—		175,392		—
Trust preferred debentures	48,682		49,245		—		49,245		—
Accrued interest payable	4,051		4,051		—		4,051


	December 31, 2019
(dollars in thousands)	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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		—

- 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

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

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

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

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The commitments are principally tied to variable rates. Loan commitments as of September 30, 2020 and December 31, 2019 were as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Commitments to extend credit	$	966,620	$	725,506
Financial guarantees – standby letters of credit	15,036		106,678

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted as a provision for credit loss expense included in other expense on the consolidated income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Expected utilization rates are compared to the current funded portion of the total commitment amount as a practical expedient for funded exposure at default. At September 30, 2020, the ACL for off-balance sheet credit exposures was $2.4 million.

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 2020 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. There were no losses as a result of make-whole requests and loan repurchases for the three and nine months ended September 30, 2020 and 2019. The liability for unresolved repurchase demands totaled $327,000 and $289,000 at September 30, 2020 and December 31, 2019, respectively.

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATIONOur 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 for the three and nine months ended September 30, 2020 and 2019 were as follows:


(dollars in thousands)	Banking		Wealth Management		Commercial FHA Origination and Servicing		Other		Total
Three Months Ended September 30, 2020
Net interest income (expense)	$	52,867	$	—	$	(25)	$	(2,862)	$	49,980
Provision for credit losses on loans	10,970		—		—		—		10,970
Noninterest income	13,905		5,559		(477)		(68)		18,919
Noninterest expense	49,562		3,599		1,796		(298)		54,659
Income (loss) before income taxes (benefit)	6,240		1,960		(2,298)		(2,632)		3,270
Income taxes (benefit)	205		541		2,330		108		3,184
Net income (loss)	$	6,035	$	1,419	$	(4,628)	$	(2,740)	$	86
Total assets	$	6,627,239	$	27,165	$	74,698	$	(29,057)	$	6,700,045
Nine Months Ended September 30, 2020
Net interest income (expense)	$	154,844	$	—	$	(97)	$	(9,127)	$	145,620
Provision for credit losses on loans	33,149		—		—		—		33,149
Noninterest income	34,465		16,934		(4,296)		(190)		46,913
Noninterest expense	121,930		11,110		5,846		(770)		138,116
Income (loss) before income taxes (benefit)	34,230		5,824		(10,239)		(8,547)		21,268
Income taxes (benefit)	7,185		1,623		110		(1,854)		7,064
Net income (loss)	$	27,045	$	4,201	$	(10,349)	$	(6,693)	$	14,204
Total assets	$	6,627,239	$	27,165	$	74,698	$	(29,057)	$	6,700,045
Three Months Ended September 30, 2019
Net interest income (expense)	$	52,445	$	—	$	(203)	$	(2,792)	$	49,450
Provision for credit losses on loans	4,361		—		—		—		4,361
Noninterest income	10,827		5,998		2,840		(59)		19,606
Noninterest expense	42,125		3,616		2,520		(236)		48,025
Income (loss) before income taxes (benefit)	16,786		2,382		117		(2,615)		16,670
Income taxes (benefit)	3,018		561		585		(149)		4,015
Net income (loss)	$	13,768	$	1,821	$	(468)	$	(2,466)	$	12,655
Total assets	$	6,038,409	$	19,903	$	79,201	$	(23,609)	$	6,113,904
Nine Months Ended September 30, 2019
Net interest income (expense)	$	149,893	$	—	$	(517)	$	(8,248)	$	141,128
Provision for credit losses on loans	11,680		—		—		—		11,680
Noninterest income	28,792		16,455		11,194		(173)		56,268
Noninterest expense	110,852		11,089		8,335		(960)		129,316
Income (loss) before income taxes (benefit)	56,153		5,366		2,342		(7,461)		56,400
Income taxes (benefit)	12,627		1,397		1,207		(1,823)		13,408
Net income (loss)	$	43,526	$	3,969	$	1,135	$	(5,638)	$	42,992
Total assets	$	6,038,409	$	19,903	$	79,201	$	(23,609)	$	6,113,904

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2020
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONSA member of our board of directors has ownership in a building the Company utilizes for office space located in Effingham, Illinois. During the three and nine months ended September 30, 2020, the Company paid rent on this space of $43,000 and $76,000, respectively.

REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

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 three and nine months ended September 30, 2020 and 2019.


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	4,054	$	4,397	$	12,536	$	12,096
Investment advisory fees	513		548		1,537		1,616
Investment brokerage fees	361		357		1,073		808
Other	631		696		1,788		1,935
Service charges on deposit accounts:
Nonsufficient fund fees	1,335		2,096		4,162		5,651
Other	757		912		2,292		2,516
Interchange revenues	3,283		3,249		9,129		8,939
Other income:
Merchant services revenue	396		367		1,051		1,131
Other	329		908		2,196		2,514
Noninterest income - out-of-scope of Topic 606	7,260		6,076		11,149		19,062
Total noninterest income	$	18,919	$	19,606	$	46,913	$	56,268

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 Topic 606. 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 noninterest income streams considered in-scope by Topic 606 are discussed below.

Wealth Management Revenue

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

Service Charges on Deposit Accounts

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

charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.

Interchange Revenue

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

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

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Principles of Consolidation

other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited balance sheets.

Accounting Guidance Adopted in 2020

The following table illustrates the impact of ASC 326.


	January 1, 2020
(dollars in thousands)	As Reported Under ASC 326		Pre-ASC 326 Adoption		Impact of ASC 326 Adoption
Assets:
Loans
Commercial	$	1,056,986	$	1,055,185	$	1,801
Commercial real estate	1,528,119		1,526,504		1,615
Construction and land development	209,551		208,733		818
Residential real estate	570,882		568,291		2,591
Consumer	710,646		710,116		530
Lease Financing	332,581		332,581		—
Allowance for credit losses on loans	(40,811)		(28,028)		(12,783)
Liabilities:
Allowance for credit losses on unfunded commitments	(1,507)		(1,244)		(263)

Loans

and credit card loans continue to accrue interest until they are charged off or at an earlier date if collection of principal or interest is considered doubtful.

Purchased Credit Deteriorated Loans

Allowance for Credit Losses on Loans

The table below identifies the Company’s loan portfolio segments and classes.


Segment			Class
Commercial			Commercial Commercial Other
Commercial Real Estate			Commercial Real Estate Non-Owner Occupied Commercial Real Estate Owner Occupied Multi-Family Farmland
Construction and Land Development			Construction and Land Development
Residential Real Estate			Residential First Lien Other Residential
Consumer			Consumer Consumer Other
Lease Financing			Lease Financing

The principal risks to each segment of loans are as follows:

Determining the Contractual Term

Troubled Debt Restructurings (“TDR”)

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

Allowance for Credit Losses on Available-For-Sale Securities

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule Illustrates the Impact of ASC 326

The following table illustrates the impact of ASC 326.


	January 1, 2020
(dollars in thousands)	As Reported Under ASC 326		Pre-ASC 326 Adoption		Impact of ASC 326 Adoption
Assets:
Loans
Commercial	$	1,056,986	$	1,055,185	$	1,801
Commercial real estate	1,528,119		1,526,504		1,615
Construction and land development	209,551		208,733		818
Residential real estate	570,882		568,291		2,591
Consumer	710,646		710,116		530
Lease Financing	332,581		332,581		—
Allowance for credit losses on loans	(40,811)		(28,028)		(12,783)
Liabilities:
Allowance for credit losses on unfunded commitments	(1,507)		(1,244)		(263)

Summary of Loans

The table below identifies the Company’s loan portfolio segments and classes.


Segment			Class
Commercial			Commercial Commercial Other
Commercial Real Estate			Commercial Real Estate Non-Owner Occupied Commercial Real Estate Owner Occupied Multi-Family Farmland
Construction and Land Development			Construction and Land Development
Residential Real Estate			Residential First Lien Other Residential
Consumer			Consumer Consumer Other
Lease Financing			Lease Financing

The following table presents total loans outstanding by portfolio class, as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Commercial:
Commercial	$	729,745	$	628,056
Commercial other	813,412		427,129
Commercial real estate:
Commercial real estate non-owner occupied	824,311		825,874
Commercial real estate owner occupied	442,692		464,601
Multi-family	149,290		146,795
Farmland	80,465		89,234
Construction and land development	177,894		208,733
Total commercial loans	3,217,809		2,790,422
Residential real estate:
Residential first lien	380,402		456,107
Other residential	90,427		112,184
Consumer:
Consumer	82,912		100,732
Consumer other	774,382		609,384
Lease financing	395,534		332,581
Total loans, gross	$	4,941,466	$	4,401,410

INVESTMENT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of Investment Securities Classified as Available for Sale

Investment securities as of September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses on investments		Fair value
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	32,276	$	461	$	20	$	—	$	32,717
Mortgage-backed securities - agency	282,389		6,796		6		—		289,179
Mortgage-backed securities - non-agency	23,712		260		—		—		23,972
State and municipal securities	120,998		7,009		3		2		128,002
Corporate securities	136,652		1,375		1,760		306		135,961
Total available for sale securities	$	596,027	$	15,901	$	1,789	$	308	$	609,831


	December 31, 2019
(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses on investments	Fair value
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	59,600	$	442	$	22	N/A	$	60,020
Mortgage-backed securities - agency	321,840		3,368		234		N/A	324,974
Mortgage-backed securities - non-agency	17,198		3		53		N/A	17,148
State and municipal securities	119,371		5,195		11		N/A	124,555
Corporate securities	121,159		2,131		554		N/A	122,736
Total available for sale securities	$	639,168	$	11,139	$	874	N/A	$	649,433

Schedule of Debt Securities


(dollars in thousands)	Amortized cost		Fair value
Investment securities available for sale
Within one year	$	28,407	$	28,730
After one year through five years	63,844		66,583
After five years through ten years	171,593		173,883
After ten years	26,082		27,484
Mortgage-backed securities	306,101		313,151
Total available for sale securities	$	596,027	$	609,831

Proceeds and gross realized gains and losses on sales on investment securities available for sale for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Investment securities available for sale
Proceeds from sales(1)	$	28,256	$	1,025	$	28,256	$	29,490
Gross realized gains on sales	1,721		25		1,721		151
Gross realized losses on sales	—		—		—		(190)

_____________________________________________________

(1)Proceeds from sales of investment securities available for sale as of September 30, 2020 were pending settlement.

Schedule of Major Security Type

The table below presents a rollforward by major security type for the three and nine months ended September 30, 2020 of the ACL on investment securities available for sale held at period end:


(dollars in thousands)	State and municipal securities		Corporate securities
Change in allowance for credit losses on investment securities for the three months ended September 30, 2020:
Balance, beginning of period	$	1	$	126

Additions	1		243
Reductions	—		(63)

Balance, end of period	$	2	$	306
Change in allowance for credit losses on investment securities for the nine months ended September 30, 2020:
Balance, beginning of period	$	—	$	—
Impact of adopting ASC 326	—		—
Additions	20		389
Reductions	(18)		(83)

Balance, end of period	$	2	$	306

Schedule of Unrealized Losses and Fair Values for Investment Securities


	September 30, 2020
	Less than 12 Months				12 Months or more				Total
(dollars in thousands)	Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss
Investment securities available for sale
U.S. government sponsored entities and U.S. agency securities	$	9,980	$	20	$	—	$	—	$	9,980	$	20
Mortgage-backed securities - agency	2,502		6		—		—		2,502		6

Corporate securities	27,916		868		—		—		27,916		868
Total available for sale securities	$	40,398	$	894	$	—	$	—	$	40,398	$	894


	December 31, 2019
	Less than 12 Months				12 Months or more				Total
(dollars in thousands)	Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss
Investment securities available for sale
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

Schedule of Sales of Equity Securities


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Equity securities
Proceeds from sales	$	—	$	—	$	—	$	105
Gross realized gains on sales	—		—		—		78

Net unrealized gains	135		54		317		92

LOANS (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Summary of Loans

The table below identifies the Company’s loan portfolio segments and classes.


Segment			Class
Commercial			Commercial Commercial Other
Commercial Real Estate			Commercial Real Estate Non-Owner Occupied Commercial Real Estate Owner Occupied Multi-Family Farmland
Construction and Land Development			Construction and Land Development
Residential Real Estate			Residential First Lien Other Residential
Consumer			Consumer Consumer Other
Lease Financing			Lease Financing

The following table presents total loans outstanding by portfolio class, as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Commercial:
Commercial	$	729,745	$	628,056
Commercial other	813,412		427,129
Commercial real estate:
Commercial real estate non-owner occupied	824,311		825,874
Commercial real estate owner occupied	442,692		464,601
Multi-family	149,290		146,795
Farmland	80,465		89,234
Construction and land development	177,894		208,733
Total commercial loans	3,217,809		2,790,422
Residential real estate:
Residential first lien	380,402		456,107
Other residential	90,427		112,184
Consumer:
Consumer	82,912		100,732
Consumer other	774,382		609,384
Lease financing	395,534		332,581
Total loans, gross	$	4,941,466	$	4,401,410

Schedule Loans Outstanding to Directors, Executive Officers, Principal Shareholders and Affiliates

The new loans, other additions, repayments and other reductions for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Beginning balance	$	23,806	$	24,473	$	22,989	$	26,536
New loans and other additions	17		143		2,559		3,205
Repayments and other reductions	(3,249)		(1,259)		(4,974)		(6,384)
Ending balance	$	20,574	$	23,357	$	20,574	$	23,357

Summary of Changes in Allowance for Loan Losses, by Loan Portfolio

The following table represents, by loan portfolio segment, a summary of changes in the ACL on loans for the three and nine months ended September 30, 2020 and 2019:


	Commercial Loan Portfolio						Other Loan Portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
Changes in allowance for credit losses on loans for the three months ended September 30, 2020:
Balance, beginning of period	$	12,213	$	20,296	$	1,512	$	4,830	$	2,087	$	6,155	$	47,093

Provision for credit losses on loans	6,513		4,518		534		(184)		422		(833)		10,970

Charge-offs	(913)		(3,462)		(250)		(101)		(307)		(628)		(5,661)
Recoveries	47		37		6		34		125		120		369
Balance, end of period	$	17,860	$	21,389	$	1,802	$	4,579	$	2,327	$	4,814	$	52,771

Changes in allowance for credit losses on loans for the nine months ended September 30, 2020:
Balance, beginning of period	$	10,031	$	10,272	$	290	$	2,499	$	2,642	$	2,294	$	28,028
Impact of adopting ASC 326	2,327		4,104		724		1,211		(594)		774		8,546
Provision for credit losses on loans	9,132		18,661		233		226		994		3,903		33,149
Initial PCD Allowance	1,045		1,311		809		1,015		57		—		4,237
Charge-offs	(4,763)		(13,081)		(324)		(496)		(1,271)		(2,414)		(22,349)
Recoveries	88		122		70		124		499		257		1,160
Balance, end of period	$	17,860	$	21,389	$	1,802	$	4,579	$	2,327	$	4,814	$	52,771

Changes in allowance for credit losses on loans for the three months ended September 30, 2019:
Balance, beginning of period	$	10,115	$	8,639	$	316	$	2,424	$	2,219	$	2,212	$	25,925
Provision for credit losses on loans	1,619		2,211		(13)		(101)		402		243		4,361
Charge-offs	(2,971)		(2,611)		—		(79)		(519)		(394)		(6,574)
Recoveries	16		854		3		39		165		128		1,205
Balance, end of period	$	8,779	$	9,093	$	306	$	2,283	$	2,267	$	2,189	$	24,917

Changes in allowance for credit losses on loans for the nine months ended September 30, 2019:
Balance, beginning of period	$	9,524	$	4,723	$	372	$	2,041	$	2,154	$	2,089	$	20,903
Provision for credit losses on loans	2,295		6,418		(35)		587		1,057		1,358		11,680
Charge-offs	(3,085)		(2,938)		(44)		(455)		(1,540)		(1,544)		(9,606)
Recoveries	45		890		13		110		596		286		1,940
Balance, end of period	$	8,779	$	9,093	$	306	$	2,283	$	2,267	$	2,189	$	24,917


	Commercial Loan Portfolio						Other Loan Portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
Allowance for credit losses on loans:
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 credit losses on loans	$	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

_______________________________________________________

Schedule of Transitioning Risk States for Each Asset Pool within the Expected Credit Loss Model

The below table illustrates the transition matrix:


Risk state	Commercial loans risk rating	Consumer loans and equipment finance loans and leases days past due
1	0-5	0-14
2	6	15-29
3	7	30-59
4	8	60-89
Default	9+ and nonaccrual	90+ and nonaccrual

Schedule of Amortized Cost Basis of Individually Evaluated Loans on Nonaccrual Status

The following table presents amortized cost basis of individually evaluated loans on nonaccrual status as of September 30, 2020 and December 31, 2019:


	September 30, 2020				December 31, 2019
(dollars in thousands)	Nonaccrual		Nonaccrual with no allowance for credit loss		Nonaccrual		Nonaccrual with no allowance for credit loss
Commercial:
Commercial	$	2,844	$	380	$	1,492	$	119
Commercial other	1,558		—		4,351		1,519
Commercial real estate:
Commercial real estate non-owner occupied	12,852		7,277		10,915		4,572
Commercial real estate owner occupied	14,044		9,563		4,396		2,648
Multi-family	10,331		2,325		6,231		1,430
Farmland	—		—		200		150
Construction and land development	7,214		5,035		1,304		1,245
Total commercial loans	48,843		24,580		28,889		11,683
Residential real estate:
Residential first lien	8,720		845		6,140		2,416
Other residential	2,339		—		1,656		912
Consumer:
Consumer	392		—		341		7

Lease financing	2,691		—		1,375		116
Total loans	$	62,985	$	25,425	$	38,401	$	15,134

Schedule of Collateral Dependent Loans

The table below presents the value of collateral dependent loans by loan class as of September 30, 2020:


(dollars in thousands)	September 30, 2020


Commercial real estate:
Commercial real estate non-owner occupied	$	8,389
Commercial real estate owner occupied	824
Multi-family	10,196
Construction and land development	5,032


Total collateral dependent loans	$	24,441

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 as of September 30, 2020 was as follows:


	Accruing Loans
(dollars in thousands)	30-59 days past due		60-89 days past due		Past due 90 days or more		Total past due		Nonaccrual		Current		Total
Commercial:
Commercial	$	469	$	232	$	—	$	701	$	2,844	$	726,200	$	729,745
Commercial Other	4,046		2,409		906		7,361		1,558		804,493		813,412
Commercial real estate:
Commercial real estate non-owner occupied	2,990		306		—		3,296		12,852		808,163		824,311
Commercial real estate owner occupied	2,157		—		—		2,157		14,044		426,491		442,692
Multi-family	62		—		—		62		10,331		138,897		149,290
Farmland	90		—		—		90		—		80,375		80,465
Construction and land development	205		131		—		336		7,214		170,344		177,894
Total commercial loans	10,019		3,078		906		14,003		48,843		3,154,963		3,217,809
Residential real estate:
Residential first lien	—		572		402		974		8,720		370,708		380,402
Other residential	612		33		—		645		2,339		87,443		90,427
Consumer:
Consumer	248		19		—		267		392		82,253		82,912
Consumer Other	5,272		3,283		—		8,555		—		765,827		774,382
Lease financing	3,777		1,275		497		5,549		2,691		387,294		395,534
Total loans	$	19,928	$	8,260	$	1,805	$	29,993	$	62,985	$	4,848,488	$	4,941,466

The aging status of the recorded investment in loans by portfolio (excluding PCI) as of December 31, 2019 was as follows:


	Accruing Loans
(dollars in thousands)	30-59 days past due		60-89 days past due		Past due 90 days or more		Total past due		Nonaccrual		Current		Total
Commercial	$	5,910	$	3,086	$	—	$	8,996	$	5,843	$	1,037,268	$	1,052,107
Commercial real estate	2,895		399		—		3,294		21,742		1,481,361		1,506,397
Construction and land development	1,539		72		—		1,611		1,304		200,141		203,056
Residential real estate	588		1,561		145		2,294		7,796		545,564		555,654
Consumer	6,701		4,154		—		10,855		341		697,708		708,904
Lease financing	1,783		1,188		218		3,189		1,375		328,017		332,581
Total loans (excluding PCI)	$	19,416	$	10,460	$	363	$	30,239	$	38,401	$	4,290,059	$	4,358,699

Summary of TDRs Loans


	September 30, 2020						December 31, 2019 (3)
(dollars in thousands)	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	447	$	610	$	1,057	$	435	$	369	$	804
Commercial real estate	874		4,879		5,753		1,720		9,834		11,554
Construction and land development	40		977		1,017		45		167		212
Residential real estate	1,264		3,565		4,829		1,083		1,993		3,076
Consumer	28		—		28		35		—		35
Lease financing	—		42		42		—		55		55
Total loans	$	2,653	$	10,073	$	12,726	$	3,318	$	12,418	$	15,736

________________________________________________________

(1)These loans are still accruing interest.

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

(3)TDRs as of December 31, 2019 exclude PCI loans.


	Commercial loan portfolio						Other loan portfolio
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Residential real estate		Consumer		Lease financing		Total
For the three months ended September 30, 2020
Troubled debt restructurings:
Number of loans	—		2		1		9		2		—		14
Pre-modification outstanding balance	$	—	$	164	$	526	$	1,037	$	9	$	—	$	1,736
Post-modification outstanding balance	—		129		494		1,025		9		—		1,657




For the nine months ended September 30, 2020
Troubled debt restructurings:
Number of loans	2		4		3		20		2		—		31
Pre-modification outstanding balance	$	432	$	797	$	1,010	$	2,055	$	9	$	—	$	4,303
Post-modification outstanding balance	429		735		966		1,928		9		—		4,067




For the three months ended September 30, 2019
Troubled debt restructurings:
Number of loans	—		—		1		7		—		—		8
Pre-modification outstanding balance	$	—	$	—	$	159	$	361	$	—	$	—	$	520
Post-modification outstanding balance	—		—		155		347		—		—		502




For the nine months ended For the nine months ended September 30, 2019
Troubled debt restructurings:
Number of loans	1		3		2		16		2		—		24
Pre-modification outstanding balance	$	249	$	1,924	$	221	$	691	$	15	$	—	$	3,100
Post-modification outstanding balance	249		1,837		170		664		8		—		2,928

Schedule of Loans Credit Equality Indicators

The following tables present the recorded investment of the commercial loan portfolio by risk category as of September 30, 2020 and December 31, 2019:


			September 30, 2020
			Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)			2020		2019		2018		2017		2016		Prior		Revolving loans		Total
Commercial	Commercial	Acceptable credit quality	$	85,245	$	104,496	$	36,765	$	42,402	$	28,848	$	55,073	$	329,667	$	682,496
		Special mention	326		3,208		5,610		165		647		4,155		14,395		28,506
		Substandard	—		297		1,361		19		291		4,653		9,211		15,832
		Substandard – nonaccrual	—		7		140		990		183		423		1,101		2,844
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		67		—		—		—		—		—		67
		Subtotal	85,571		108,075		43,876		43,576		29,969		64,304		354,374		729,745

	Commercial other	Acceptable credit quality	458,131		182,184		63,581		865		505		831		93,739		799,836
		Special mention	152		302		560		37		68		—		2,651		3,770
		Substandard	230		124		660		4		34		—		6,860		7,912
		Substandard – nonaccrual	270		1,088		191		—		3		—		6		1,558
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	240		96		—		—		—		—		—		336
		Subtotal	459,023		183,794		64,992		906		610		831		103,256		813,412

Commercial real estate	Non-owner occupied	Acceptable credit quality	71,791		110,858		70,537		111,386		119,283		174,832		9,286		667,973
		Special mention	—		20,073		3,332		10,377		10,489		21,382		—		65,653
		Substandard	7,475		5,533		14,096		5,596		12,433		32,408		250		77,791
		Substandard – nonaccrual	—		300		234		3,241		3,448		5,629		—		12,852
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	42		—		—		—		—		—		—		42
		Subtotal	79,308		136,764		88,199		130,600		145,653		234,251		9,536		824,311

	Owner occupied	Acceptable credit quality	48,819		55,658		38,548		57,512		69,572		109,261		4,348		383,718
		Special mention	1,384		4,067		1,157		4,196		1,318		16,547		—		28,669
		Substandard	540		357		796		766		4,616		8,809		377		16,261
		Substandard – nonaccrual	388		197		170		244		—		12,645		400		14,044
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	51,131		60,279		40,671		62,718		75,506		147,262		5,125		442,692

	Multi-family	Acceptable credit quality	8,641		7,752		20,919		28,778		18,592		27,689		693		113,064
		Special mention	468		—		7,625		—		—		1,781		—		9,874
		Substandard	—		10,982		1,000		—		3,964		75		—		16,021
		Substandard – nonaccrual	—		—		—		—		7,879		2,452		—		10,331
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	9,109		18,734		29,544		28,778		30,435		31,997		693		149,290

	Farmland	Acceptable credit quality	12,520		8,362		4,112		9,628		7,321		26,866		2,542		71,351
		Special mention	204		111		181		38		1,158		1,089		—		2,781
		Substandard	2,109		313		812		409		18		2,285		387		6,333
		Substandard – nonaccrual	—		—		—		—		—		—		—		—
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	—		—		—		—		—		—		—		—
		Subtotal	14,833		8,786		5,105		10,075		8,497		30,240		2,929		80,465

Construction and land development		Acceptable credit quality	23,098		84,245		13,596		3,678		2,570		7,754		16,554		151,495
		Special mention	1,386		10,823		458		—		—		9		—		12,676
		Substandard	—		696		—		—		—		915		—		1,611
		Substandard – nonaccrual	—		244		—		2,094		154		4,722		—		7,214
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	431		4,467		—		—		—		—		—		4,898
		Subtotal	24,915		100,475		14,054		5,772		2,724		13,400		16,554		177,894

Total
		Acceptable credit quality	708,245		553,555		248,058		254,249		246,691		402,306		456,829		2,869,933
		Special mention	3,920		38,584		18,923		14,813		13,680		44,963		17,046		151,929
		Substandard	10,354		18,302		18,725		6,794		21,356		49,145		17,085		141,761
		Substandard – nonaccrual	658		1,836		735		6,569		11,667		25,871		1,507		48,843
		Doubtful	—		—		—		—		—		—		—		—
		Not graded	713		4,630		—		—		—		—		—		5,343
Total commercial loans			$	723,890	$	616,907	$	286,441	$	282,425	$	293,394	$	522,285	$	492,467	$	3,217,809


	December 31, 2019
(dollars in thousands)	Commercial		Commercial real estate		Construction and land development		Total
Acceptable credit quality	$	1,005,442	$	1,398,400	$	194,992	$	2,598,834
Special mention	17,435		18,450		2,420		38,305
Substandard	23,387		67,805		1,250		92,442
Substandard – nonaccrual	5,843		21,742		1,304		28,889
Doubtful	—		—		—		—
Not graded	—		—		3,090		3,090
Total (excluding PCI)	$	1,052,107	$	1,506,397	$	203,056	$	2,761,560

The following tables present the recorded investment of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming as of September 30, 2020 and December 31, 2019:


			September 30, 2020
			Term Loans Amortized Cost Basis by Origination Year
(dollars in thousands)			2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
Residential real estate	Residential first lien	Performing	$	24,789	$	27,808	$	54,228	$	108,493	$	91,674	$	63,049	$	505	$	370,546
		Nonperforming	—		201		772		963		718		7,202		—		9,856
		Subtotal	24,789		28,009		55,000		109,456		92,392		70,251		505		380,402

	Other residential	Performing	699		2,715		3,642		2,341		1,510		2,043		74,608		87,558
		Nonperforming	—		14		22		165		8		176		2,484		2,869
		Subtotal	699		2,729		3,664		2,506		1,518		2,219		77,092		90,427

Consumer	Consumer	Performing	22,404		16,063		19,008		10,488		7,047		4,858		2,624		82,492
		Nonperforming	7		13		46		91		76		185		2		420
		Subtotal	22,411		16,076		19,054		10,579		7,123		5,043		2,626		82,912

	Consumer other	Performing	518,726		193,439		27,724		7,315		6,143		2,823		18,212		774,382
		Nonperforming	—		—		—		—		—		—		—		—
		Subtotal	518,726		193,439		27,724		7,315		6,143		2,823		18,212		774,382

Leases financing		Performing	137,546		134,196		76,511		25,241		16,437		2,415		—		392,346
		Nonperforming	480		452		1,581		374		209		92		—		3,188
		Subtotal	138,026		134,648		78,092		25,615		16,646		2,507		—		395,534

Total
		Performing	704,164		374,221		181,113		153,878		122,811		75,188		95,949		1,707,324
		Nonperforming	487		680		2,421		1,593		1,011		7,655		2,486		16,333
Total other loans			$	704,651	$	374,901	$	183,534	$	155,471	$	123,822	$	82,843	$	98,435	$	1,723,657


	December 31, 2019
(dollars in thousands)	Residential real estate		Consumer		Lease financing		Total
Performing	$	546,630	$	708,528	$	330,988	$	1,586,146
Nonperforming	9,024		376		1,593		10,993
Total (excluding PCI)	$	555,654	$	708,904	$	332,581	$	1,597,139

PREMISES AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Summary of Premises and Equipment

A summary of premises and equipment as of September 30, 2020 and December 31, 2019 is as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Land	$	16,158	$	19,123
Buildings and improvements	66,067		77,296
Furniture and equipment	32,475		31,846
Total	114,700		128,265
Accumulated depreciation	(39,733)		(37,210)
Premises and equipment, net	$	74,967	$	91,055

LEASES (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Summary of Information Related to Operating Leases

Information related to operating leases for the three and nine months ended September 30, 2020 and 2019 was as follows:



(dollars in thousands)	Three Months Ended September 30, 2020			Nine Months Ended September 30, 2020
Operating lease cost	$	883		$	2,453
Operating cash flows from leases	942			2,669
Right-of-use assets obtained in exchange for lease obligations	96			1,536
Right-of-use assets derecognized due to terminations or impairment	(4,440)			(4,453)
Weighted average remaining lease term	8.3 years			8.3 years
Weighted average discount rate	2.89		%	2.89		%



(dollars in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	835		$	2,250
Operating cash flows from leases	887			2,370
Right-of-use assets obtained in exchange for lease obligations	6,434			18,715
Weighted average remaining lease term	8.4 years			8.4 years
Weighted average discount rate	2.98		%	2.98		%

Summary of Projected Minimum Rental Payments

The projected minimum rental payments under the terms of the leases as of September 30, 2020 were as follows:


(dollars in thousands)	Amount
Year ending December 31:
2020 remaining	$	394
2021	2,346
2022	2,189
2023	1,900
2024	1,545
Thereafter	5,686
Total future minimum lease payments	14,060
Less imputed interest	(1,632)
Total operating lease liabilities	$	12,428

LOAN SERVICING RIGHTS (Tables)

9 Months Ended

Sep. 30, 2020

Transfers and Servicing [Abstract]

Schedule of Other Mortgage Notes Serviced and Changes in our Mortgage Servicing Rights

Changes in our commercial FHA loan servicing rights for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Loan servicing rights:
Balance, beginning of period	$	56,751	$	56,462	$	57,637	$	56,252
Originated servicing	341		526		998		2,089
Amortization	(814)		(684)		(2,357)		(2,037)
Balance, end of period	$	56,278	$	56,304	$	56,278	$	56,304
Valuation allowances:
Balance, beginning of period	$	13,519	$	2,271	$	4,944	$	2,805
Impairment	1,418		1,060		9,993		1,085
Recapture	—		—		—		(559)
Balance, end of period	$	14,937	$	3,331	$	14,937	$	3,331
Loan servicing rights, net	$	41,341	$	52,973	$	41,341	$	52,973
Fair value:
At beginning of period	$	43,232	$	54,191	$	52,693	$	53,447
At end of period	$	41,341	$	52,973	$	41,341	$	52,973

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The carrying amount of goodwill by segment at September 30, 2020 and December 31, 2019 is summarized as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Banking	$	157,158	$	156,120
Commercial FHA origination and servicing	—		10,892
Wealth management	4,746		4,746
Total goodwill	$	161,904	$	171,758

Schedule of Intangible Assets

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of September 30, 2020 and December 31, 2019 are summarized as follows:


	September 30, 2020						December 31, 2019
(dollars in thousands)	Gross carrying amount		Accumulated amortization		Total		Gross carrying amount		Accumulated amortization		Total
Core deposit intangibles	$	57,012	$	(34,737)	$	22,275	$	57,012	$	(30,674)	$	26,338
Customer relationship intangibles	14,071		(6,408)		7,663		14,071		(5,523)		8,548
Total intangible assets	$	71,083	$	(41,145)	$	29,938	$	71,083	$	(36,197)	$	34,886

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments, Fair Value and Notional Amounts


	Notional amount				Fair value gain
(dollars in thousands)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Derivative instruments (included in other assets):
Interest rate lock commitments	$	214,403	$	222,654	$	2,996	$	3,350
Forward commitments to sell mortgage-backed securities	153,864		221,052		—		—
Total	$	368,267	$	443,706	$	2,996	$	3,350


	Notional amount				Fair value loss
(dollars in thousands)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Derivative instruments (included in other liabilities):
Forward commitments to sell mortgage-backed securities	$	45,613	$	—	$	74	$	—

DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2020

Deposits [Abstract]

Schedule Summarizes the Classification of Deposits

The following table summarizes the classification of deposits as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Noninterest-bearing demand	$	1,355,188	$	1,019,472
Interest-bearing:
Checking	1,581,216		1,342,788
Money market	826,454		787,662
Savings	580,748		522,456
Time	685,130		871,876
Total deposits	$	5,028,736	$	4,544,254

SHORT-TERM BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Short Term Borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of September 30, 2020 and December 31, 2019:


	Repurchase agreements
(dollars in thousands)	September 30, 2020			December 31, 2019
Outstanding at period-end	$	58,625		$	82,029
Average amount outstanding	59,592			121,168
Maximum amount outstanding at any month end	77,136			138,907
Weighted average interest rate:
During period	0.35		%	0.69		%
End of period	0.14		%	0.67		%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2020

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) Advances

The following table summarizes our FHLB advances and other borrowings as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Midland States Bancorp, Inc.
Series G redeemable preferred stock - 181 shares at $1,000 per share	$	181	$	181
Midland States Bank
FHLB advances – fixed rate, fixed term of $128.5 million and $28.1 million, at rates averaging 0.71% and 2.56% at September 30, 2020 and December 31, 2019, respectively – maturing through June 2023	128,459		28,130
FHLB advances – putable fixed rate of $565.0 million and $465.0 million, at rates averaging 2.02% and 2.34% at September 30, 2020 and December 31, 2019, respectively – maturing through February 2030 with call provisions through August 2021	565,000		465,000
Total FHLB advances and other borrowings	$	693,640	$	493,311

SUBORDINATED DEBT (Tables)

9 Months Ended

Sep. 30, 2020

Subordinated Borrowings [Abstract]

Schedule of Summary of Company's Subordinated Debt

The following table summarizes the Company’s subordinated debt as of September 30, 2020 and December 31, 2019:


(dollars in thousands)	September 30, 2020		December 31, 2019
Subordinated debt issued June 2015 – fixed interest rate of 6.00% through June 18, 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $31,075 and $38,325 at September 30, 2020 and December 31, 2019, respectively - maturing June 18, 2025	$	31,075	$	38,273
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $550 - maturing June 18, 2025	545		544
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	39,545		39,496
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	71,721		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	26,816		26,791
Total subordinated debt	$	169,702	$	176,653

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings per Common Share

Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands, except per share data)	2020		2019		2020		2019
Net income	$	86	$	12,655	$	14,204	$	42,992
Preferred dividends declared	—		(26)		—		(191)
Preferred stock, premium amortization	—		48		—		145
Net income available to common shareholders	86		12,677		14,204		42,946
Common shareholder dividends	(6,047)		(5,914)		(18,732)		(17,481)
Unvested restricted stock award dividends	(64)		(48)		(194)		(144)
Undistributed earnings to unvested restricted stock awards	—		(52)		—		(202)
Undistributed earnings to common shareholders	$	(6,025)	$	6,663	$	(4,722)	$	25,119
Basic
Distributed earnings to common shareholders	$	6,047	$	5,914	$	18,732	$	17,481
Undistributed earnings to common shareholders	(6,025)		6,663		(4,722)		25,119
Total common shareholders earnings, basic	$	22	$	12,577	$	14,010	$	42,600
Diluted
Distributed earnings to common shareholders	$	6,047	$	5,914	$	18,732	$	17,481
Undistributed earnings to common shareholders	(6,025)		6,663		(4,722)		25,119
Total common shareholders earnings	22		12,577		14,010		42,600
Add back:
Undistributed earnings reallocated from unvested restricted stock awards	—		1		—		2
Total common shareholders earnings, diluted	$	22	$	12,578	$	14,010	$	42,602
Weighted average common shares outstanding, basic	22,937,837		24,488,422		23,567,000		24,190,574
Options	—		196,107		11,518		209,489
Weighted average common shares outstanding, diluted	22,937,837		24,684,529		23,578,518		24,400,063
Basic earnings per common share	$	0.00	$	0.51	$	0.59	$	1.76
Diluted earnings per common share	0.00		0.51		0.59		1.75

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured and Recorded at Fair Value


	September 30, 2020
(dollars in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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	$	32,717	$	—	$	32,717	$	—
Mortgage-backed securities - agency	289,179		—		289,179		—
Mortgage-backed securities - non-agency	23,972		—		23,972		—
State and municipal securities	128,002		—		128,002		—
Corporate securities	135,961		—		135,001		960
Equity securities	9,143		—		9,143		—
Loans held for sale	62,500				62,500		—
Interest rate lock commitments	2,996		—		2,996		—
Interest rate swap contracts	899		—		899		—
Total	$	685,369	$	—	$	684,409	$	960
Liabilities
Forward commitments to sell mortgage-backed securities	$	74	$	—	$	74	$	—
Interest rate swap contracts	2,019		—		2,019		—
Total	$	2,093	$	—	$	2,093	$	—

Assets measured at fair value on a non-recurring basis:
Loan servicing rights	$	42,465	$	—	$	—	$	42,465
Mortgage servicing rights held for sale	1,308		—		—		1,308
Nonperforming loans	26,596		—		26,596		—
Other real estate owned	3,287		—		3,287		—
Assets held for sale	4,585		—		4,585		—


	December 31, 2019
(dollars in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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
Nonperforming loans	14,693		—		12,518		2,175
Assets held for sale	3,974		—		3,974		—

Schedule Presenting Activity for Assets Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3)


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Balance, beginning of period	$	921	$	935	$	955	$	1,923
Total realized in earnings (1)	—		6		8		48
Total unrealized in other comprehensive income (2)	39		(7)		5		5
Net settlements (principal and interest)	—		(6)		(8)		(1,048)
Balance, end of period	$	960	$	928	$	960	$	928

________________________________________________________________

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

(2)Represents change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period.

Schedule Presents Quantitative Information about Significant Unobservable Inputs

(dollars in thousands)

Fair value

Valuation
technique

Unobservable
input / assumptions

Range (weighted average)(1)

September 30, 2020

Corporate securities

960

Consensus pricing

Net market price

(2.5)% - 2.5% (0%)

December 31, 2019

Corporate securities

955

Consensus pricing

Net market price

(2.0)% - 2.5% (1.5%)

___________________________________________________________________

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Schedule of Losses Recognized on Assets Measured on a Non-recurring Basis

The following table presents gains (losses) recognized on assets measured on a nonrecurring basis for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Loan servicing rights	$	(1,418)	$	(1,060)	$	(9,993)	$	(526)
Mortgage servicing rights held for sale	(188)		70		(1,075)		585
Nonperforming loans	(5,467)		(6,187)		(21,681)		(8,420)
Other real estate owned	(25)		—		(1,282)		(16)
Assets held for sale	(10,197)		(3,139)		(10,403)		(3,139)
Total gains (losses) on assets measured on a nonrecurring basis	$	(17,295)	$	(10,316)	$	(44,434)	$	(11,516)

Schedule Presents Quantitative Information about Significant Unobservable Inputs used in Fair Value Measurements of Non-recurring Assets (Level 3)

(dollars in thousands)

Fair value

Valuation
technique

Unobservable
input / assumptions

Range (weighted average)(1)

September 30, 2020

Loan servicing rights:

Commercial

41,341

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.18%)

Discount rate

10.00% - 27.00% (11.45%)

SBA

1,124

Discounted cash flow

Prepayment speed

8.31% - 9.21% (8.60%)

Discount rate

No range (11.70%)

MSR held for sale

1,308

Discounted cash flow

Prepayment speed

13.44% - 26.28% (20.28%)

Discount rate

9.00% - 11.50% (10.13%)

December 31, 2019

Loan servicing rights:

Commercial

52,693

Discounted cash flow

Prepayment speed

8.00% - 18.00% (8.20%)

Discount rate

10.00% - 14.00% (11.02%)

SBA

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:

Nonperforming loans

2,175

Fair value of collateral

Discount for type of property,

4.32% - 8.00% (5.22%)

age of appraisal and current status

_____________________________________________________________

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

Schedule of the Fair Value Option for Newly Originated Residential and Commercial Loans Held for Sale


	September 30, 2020						December 31, 2019
(dollars in thousands)	Aggregate fair value		Difference		Contractual principal		Aggregate fair value		Difference		Contractual principal
Commercial loans held for sale	$	8,610	$	167	$	8,443	$	8,236	$	206	$	8,030
Residential loans held for sale	19,629		1,044		18,585		8,195		446		7,749
Consumer loans held for sale	34,261		—		34,261		—		—		—
Total loans held for sale	$	62,500	$	1,211	$	61,289	$	16,431	$	652	$	15,779


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Commercial loans held for sale	$	(156)	$	(169)	$	(38)	$	(463)
Residential loans held for sale	(114)		52		555		33
Total loans held for sale	$	(270)	$	(117)	$	517	$	(430)

Schedule Presentation of Summary of the Carrying Values and Fair Value Estimates of Certain Financial Instruments

The carrying values and estimated fair value of certain financial instruments not carried at fair value at September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
(dollars in thousands)	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Cash and due from banks	$	459,473	$	459,473	$	459,473	$	—	$	—
Federal funds sold	1,723		1,723		1,723		—		—
Nonmarketable equity securities	50,765		50,765		—		50,765		—
Loans, net	4,888,695		4,954,066		—		—		4,954,066
Accrued interest receivable	25,061		25,061		—		25,061		—

Liabilities
Deposits	$	5,028,736	$	5,038,033	$	—	$	5,038,033	$	—
Short-term borrowings	58,625		58,625		—		58,625		—
FHLB and other borrowings	693,640		729,192		—		729,192		—
Subordinated debt	169,702		175,392		—		175,392		—
Trust preferred debentures	48,682		49,245		—		49,245		—
Accrued interest payable	4,051		4,051		—		4,051


	December 31, 2019
(dollars in thousands)	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (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		—

- 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)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Loan Commitments

The commitments are principally tied to variable rates. Loan commitments as of September 30, 2020 and December 31, 2019 were as follows:


(dollars in thousands)	September 30, 2020		December 31, 2019
Commitments to extend credit	$	966,620	$	725,506
Financial guarantees – standby letters of credit	15,036		106,678

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Financial Information

Selected business segment financial information for the three and nine months ended September 30, 2020 and 2019 were as follows:


(dollars in thousands)	Banking		Wealth Management		Commercial FHA Origination and Servicing		Other		Total
Three Months Ended September 30, 2020
Net interest income (expense)	$	52,867	$	—	$	(25)	$	(2,862)	$	49,980
Provision for credit losses on loans	10,970		—		—		—		10,970
Noninterest income	13,905		5,559		(477)		(68)		18,919
Noninterest expense	49,562		3,599		1,796		(298)		54,659
Income (loss) before income taxes (benefit)	6,240		1,960		(2,298)		(2,632)		3,270
Income taxes (benefit)	205		541		2,330		108		3,184
Net income (loss)	$	6,035	$	1,419	$	(4,628)	$	(2,740)	$	86
Total assets	$	6,627,239	$	27,165	$	74,698	$	(29,057)	$	6,700,045
Nine Months Ended September 30, 2020
Net interest income (expense)	$	154,844	$	—	$	(97)	$	(9,127)	$	145,620
Provision for credit losses on loans	33,149		—		—		—		33,149
Noninterest income	34,465		16,934		(4,296)		(190)		46,913
Noninterest expense	121,930		11,110		5,846		(770)		138,116
Income (loss) before income taxes (benefit)	34,230		5,824		(10,239)		(8,547)		21,268
Income taxes (benefit)	7,185		1,623		110		(1,854)		7,064
Net income (loss)	$	27,045	$	4,201	$	(10,349)	$	(6,693)	$	14,204
Total assets	$	6,627,239	$	27,165	$	74,698	$	(29,057)	$	6,700,045
Three Months Ended September 30, 2019
Net interest income (expense)	$	52,445	$	—	$	(203)	$	(2,792)	$	49,450
Provision for credit losses on loans	4,361		—		—		—		4,361
Noninterest income	10,827		5,998		2,840		(59)		19,606
Noninterest expense	42,125		3,616		2,520		(236)		48,025
Income (loss) before income taxes (benefit)	16,786		2,382		117		(2,615)		16,670
Income taxes (benefit)	3,018		561		585		(149)		4,015
Net income (loss)	$	13,768	$	1,821	$	(468)	$	(2,466)	$	12,655
Total assets	$	6,038,409	$	19,903	$	79,201	$	(23,609)	$	6,113,904
Nine Months Ended September 30, 2019
Net interest income (expense)	$	149,893	$	—	$	(517)	$	(8,248)	$	141,128
Provision for credit losses on loans	11,680		—		—		—		11,680
Noninterest income	28,792		16,455		11,194		(173)		56,268
Noninterest expense	110,852		11,089		8,335		(960)		129,316
Income (loss) before income taxes (benefit)	56,153		5,366		2,342		(7,461)		56,400
Income taxes (benefit)	12,627		1,397		1,207		(1,823)		13,408
Net income (loss)	$	43,526	$	3,969	$	1,135	$	(5,638)	$	42,992
Total assets	$	6,038,409	$	19,903	$	79,201	$	(23,609)	$	6,113,904

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Summary of Noninterest Income, Segregated by Revenue

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and nine months ended September 30, 2020 and 2019.


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2020		2019		2020		2019
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees	$	4,054	$	4,397	$	12,536	$	12,096
Investment advisory fees	513		548		1,537		1,616
Investment brokerage fees	361		357		1,073		808
Other	631		696		1,788		1,935
Service charges on deposit accounts:
Nonsufficient fund fees	1,335		2,096		4,162		5,651
Other	757		912		2,292		2,516
Interchange revenues	3,283		3,249		9,129		8,939
Other income:
Merchant services revenue	396		367		1,051		1,131
Other	329		908		2,196		2,514
Noninterest income - out-of-scope of Topic 606	7,260		6,076		11,149		19,062
Total noninterest income	$	18,919	$	19,606	$	46,913	$	56,268

BUSINESS DESCRIPTION (Details) - Love Funding - Disposed of by Sale $ in Millions	Sep. 30, 2020 USD ($)
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Principal balances of loans serviced for others	$ 3,730.0
Principal balances of loans serviced for others, low-cost deposits	$ 340.1

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Jan. 01, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Retained earnings		$ 154,026,000		$ 165,920,000
Loans		4,941,466,000		4,401,410,000
Allowance for credit losses on loans	$ (40,811,000)	(52,771,000)	$ (47,093,000)	(28,028,000)	$ (24,917,000)	$ (25,925,000)	$ (20,903,000)
Allowance for credit losses on unfunded commitments	(1,507,000)	(2,400,000)
Interest receivable from loans		20,700,000
Threshold amount for non accrual loans		500,000
Threshold amount for accruing loans past due more than 90 days		$ 100,000
Minimum
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage cost of related equipment to unguaranteed residual values		3.00%
Maximum
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage cost of related equipment to unguaranteed residual values		15.00%
Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans	(12,783,000)
Allowance for credit losses on unfunded commitments	(263,000)
Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans	(28,028,000)
Allowance for credit losses on unfunded commitments	(1,244,000)
ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(8,546,000)
ASU 2016-13 \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Retained earnings	(7,200,000)
Commercial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans		$ 3,217,809,000		2,790,422,000
Commercial loans \| Commercial
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,056,986,000
Commercial loans \| Commercial \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,801,000
Commercial loans \| Commercial \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,055,185,000
Commercial loans \| Commercial real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,528,119,000
Commercial loans \| Commercial real estate \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,615,000
Commercial loans \| Commercial real estate \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	1,526,504,000
Commercial loans \| Construction and land development
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	209,551,000
Commercial loans \| Construction and land development \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	818,000
Commercial loans \| Construction and land development \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	208,733,000
Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans				568,291,000
Allowance for credit losses on loans		(4,579,000)	(4,830,000)	(2,499,000)	(2,283,000)	(2,424,000)	(2,041,000)
Residential real estate \| ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(1,211,000)
Residential real estate \| Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	570,882,000
Residential real estate \| Residential real estate \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	2,591,000
Residential real estate \| Residential real estate \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	568,291,000
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans				710,116,000
Allowance for credit losses on loans		(2,327,000)	(2,087,000)	(2,642,000)	(2,267,000)	(2,219,000)	(2,154,000)
Consumer \| ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				594,000
Consumer \| Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	710,646,000
Consumer \| Consumer \| Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	530,000
Consumer \| Consumer \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	710,116,000
Lease financing
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans		395,534,000		332,581,000
Allowance for credit losses on loans		$ (4,814,000)	$ (6,155,000)	(2,294,000)	$ (2,189,000)	$ (2,212,000)	$ (2,089,000)
Lease financing \| ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(774,000)
Lease financing \| Lease financing
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	332,581,000
Lease financing \| Lease financing \| Pre-ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans	332,581,000
PCD (Previously PCI) loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(4,237,000)
PCD (Previously PCI) loans \| ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans	4,200,000
Noncredit discount	$ 2,900,000
PCD (Previously PCI) loans \| Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(1,015,000)
PCD (Previously PCI) loans \| Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				(57,000)
PCD (Previously PCI) loans \| Lease financing
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit losses on loans				$ 0

DISPOSITIONS AND ACQUISITIONS (Details) $ in Millions	Jul. 17, 2019 USD ($) center shares	Sep. 30, 2020 USD ($)
Love Funding \| Disposed of by Sale
Business Acquisition
Principal balances of loans serviced for others		$ 3,730.0
Principal balances of loans serviced for others, low-cost deposits		$ 340.1
HomeStar Bank
Business Acquisition
Number of service banking centers acquired \| center	5
Total consideration	$ 11.4
Cash to pay outstanding trust preferred securities and subordinated debentures plus accrued interest	$ 1.0
Shares issued (in shares) \| shares	404,968
Transaction and integration costs	$ 7.4

INVESTMENT SECURITIES - Classified (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Investment securities available for sale
Amortized cost	$ 596,027		$ 639,168
Gross unrealized gains	15,901		11,139
Gross unrealized losses	1,789		874
Allowance for credit losses on investments	308
Fair value	609,831		649,433
U.S. government sponsored entities and U.S. agency securities
Investment securities available for sale
Amortized cost	32,276		59,600
Gross unrealized gains	461		442
Gross unrealized losses	20		22
Allowance for credit losses on investments	0
Fair value	32,717		60,020
Mortgage-backed securities - agency
Investment securities available for sale
Amortized cost	282,389		321,840
Gross unrealized gains	6,796		3,368
Gross unrealized losses	6		234
Allowance for credit losses on investments	0
Fair value	289,179		324,974
Mortgage-backed securities - non-agency
Investment securities available for sale
Amortized cost	23,712		17,198
Gross unrealized gains	260		3
Gross unrealized losses	0		53
Allowance for credit losses on investments	0
Fair value	23,972		17,148
State and municipal securities
Investment securities available for sale
Amortized cost	120,998		119,371
Gross unrealized gains	7,009		5,195
Gross unrealized losses	3		11
Allowance for credit losses on investments	2	$ 1	0
Fair value	128,002		124,555
Corporate securities
Investment securities available for sale
Amortized cost	136,652		121,159
Gross unrealized gains	1,375		2,131
Gross unrealized losses	1,760		554
Allowance for credit losses on investments	306	$ 126	0
Fair value	$ 135,961		$ 122,736

INVESTMENT SECURITIES - Amortized cost and fair value (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Amortized cost
Within one year	$ 28,407
After one year through five years	63,844
After five years through ten years	171,593
After ten years	26,082
Mortgage-backed securities	306,101
Total, single maturity date	596,027
Fair value
Within one year	28,730
After one year through five years	66,583
After five years through ten years	173,883
After ten years	27,484
Mortgage-backed securities	313,151
Total, single maturity date	$ 609,831

INVESTMENT SECURITIES - Sales on Investment Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 28,256	$ 1,025	$ 28,256	$ 29,490
Gross realized gains on sales	1,721	25	1,721	151
Gross realized losses on sales	$ 0	$ 0	$ 0	$ (190)

INVESTMENT SECURITIES - Continuous unrealized loss position (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Allowance for credit losses on investment securities available-for-sale
Ending balance	$ 308	$ 308
Fair value
Less than 12 Months, Fair value	40,398	40,398	$ 115,677
12 Months or more, Fair value	0	0	11,085
Total, Fair value	40,398	40,398	126,762
Less than 12 Months, Unrealized loss	894	894	737
12 Months or more, Unrealized loss	0	0	137
Total, Unrealized loss	894	894	874
U.S. government sponsored entities and U.S. agency securities
Allowance for credit losses on investment securities available-for-sale
Ending balance	0	0
Fair value
Less than 12 Months, Fair value	9,980	9,980	7,200
12 Months or more, Fair value	0	0	0
Total, Fair value	9,980	9,980	7,200
Less than 12 Months, Unrealized loss	20	20	22
12 Months or more, Unrealized loss	0	0	0
Total, Unrealized loss	20	20	22
Mortgage-backed securities - agency
Allowance for credit losses on investment securities available-for-sale
Ending balance	0	0
Fair value
Less than 12 Months, Fair value	2,502	2,502	75,336
12 Months or more, Fair value	0	0	7,170
Total, Fair value	2,502	2,502	82,506
Less than 12 Months, Unrealized loss	6	6	170
12 Months or more, Unrealized loss	0	0	64
Total, Unrealized loss	6	6	234
Mortgage-backed securities - non-agency
Allowance for credit losses on investment securities available-for-sale
Ending balance	0	0
Fair value
Less than 12 Months, Fair value			11,059
12 Months or more, Fair value			0
Total, Fair value			11,059
Less than 12 Months, Unrealized loss			53
12 Months or more, Unrealized loss			0
Total, Unrealized loss			53
State and municipal securities
Allowance for credit losses on investment securities available-for-sale
Beginning balance	1	0
Additions	1	20
Reductions	0	(18)
Ending balance	2	2
Fair value
Less than 12 Months, Fair value			1,813
12 Months or more, Fair value			0
Total, Fair value			1,813
Less than 12 Months, Unrealized loss			11
12 Months or more, Unrealized loss			0
Total, Unrealized loss			11
State and municipal securities \| ASU 2016-13
Allowance for credit losses on investment securities available-for-sale
Beginning balance		0
Corporate securities
Allowance for credit losses on investment securities available-for-sale
Beginning balance	126	0
Additions	243	389
Reductions	(63)	(83)
Ending balance	306	306
Fair value
Less than 12 Months, Fair value	27,916	27,916	20,269
12 Months or more, Fair value	0	0	3,915
Total, Fair value	27,916	27,916	24,184
Less than 12 Months, Unrealized loss	868	868	481
12 Months or more, Unrealized loss	0	0	73
Total, Unrealized loss	$ 868	868	$ 554
Corporate securities \| ASU 2016-13
Allowance for credit losses on investment securities available-for-sale
Beginning balance		$ 0

INVESTMENT SECURITIES - Sales on Investment Equity Securities Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales of equity securities	$ 0	$ 0	$ 0	$ 105
Gross realized gains on sales	0	0	0	78
Net unrealized gains	$ 135	$ 54	$ 317	$ 92

INVESTMENT SECURITIES - Narrative (Details) $ in Thousands	Sep. 30, 2020 USD ($) security	Dec. 31, 2019 USD ($)
Investments, Debt and Equity Securities [Abstract]
Investment securities available for sale \| security	16
Aggregate depreciation from amortized cost basis	2.17%
Equity securities \| $	$ 9,143	$ 5,621

LOANS - Summary of loans and credit losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Summary of loans
Loans	$ 4,941,466		$ 4,941,466		$ 4,401,410
Loans, additional information
Net deferred loan fees	3,900		3,900		2,200
Loans held for sale	62,500		62,500		16,431
Proceeds from sales of loans held for sale	384,700		855,015	$ 766,639
Commercial loans
Summary of loans
Loans	3,217,809		3,217,809		2,790,422
Commercial loans \| Commercial
Summary of loans
Loans	729,745		729,745		628,056
Commercial loans \| Commercial other
Summary of loans
Loans	813,412		813,412		427,129
Commercial loans \| Commercial real estate non-owner occupied
Summary of loans
Loans	824,311		824,311		825,874
Commercial loans \| Commercial real estate owner occupied
Summary of loans
Loans	442,692		442,692		464,601
Commercial loans \| Multi-family
Summary of loans
Loans	149,290		149,290		146,795
Commercial loans \| Farmland
Summary of loans
Loans	80,465		80,465		89,234
Commercial loans \| Construction and land development
Summary of loans
Loans	177,894		177,894		208,733
Residential real estate
Summary of loans
Loans					568,291
Residential real estate \| Residential first lien
Summary of loans
Loans	380,402		380,402		456,107
Residential real estate \| Other residential
Summary of loans
Loans	90,427		90,427		112,184
Consumer
Summary of loans
Loans					710,116
Consumer \| Consumer
Summary of loans
Loans	82,912		82,912		100,732
Consumer \| Consumer other
Summary of loans
Loans	774,382		774,382		609,384
Lease financing
Summary of loans
Loans	395,534		395,534		332,581
Loans, additional information
Unearned income	$ 45,100		$ 45,100		$ 39,600
Commercial Real Estate, Residential Real Estate and Consumer Loans
Loans, additional information
Proceeds from sales of loans held for sale		$ 218,800		$ 761,700

LOANS - Loans to Directors, Executive Officers, Principal Shareholders and Affiliates (Details) - Directors, Executive Officers, Principal Shareholders and Affiliates - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Notes Receivable, Beginning balance	$ 23,806	$ 24,473	$ 22,989	$ 26,536
New loans and other additions	17	143	2,559	3,205
Repayments and other reductions	(3,249)	(1,259)	(4,974)	(6,384)
Notes Receivable, Ending balance	$ 20,574	$ 23,357	$ 20,574	$ 23,357

LOANS - Summary of changes in the ACL on loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	$ 47,093	$ 25,925	$ 28,028	$ 20,903
Provision for credit losses on loans	10,970	4,361	33,149	11,680
Charge-offs	(5,661)	(6,574)	(22,349)	(9,606)
Recoveries	369	1,205	1,160	1,940
Balance, end of period	52,771	24,917	52,771	24,917
PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			4,237
ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			8,546
Commercial loans \| Commercial
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	12,213	10,115	10,031	9,524
Provision for credit losses on loans	6,513	1,619	9,132	2,295
Charge-offs	(913)	(2,971)	(4,763)	(3,085)
Recoveries	47	16	88	45
Balance, end of period	17,860	8,779	17,860	8,779
Commercial loans \| Commercial \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			1,045
Commercial loans \| Commercial \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			2,327
Commercial loans \| Commercial real estate
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	20,296	8,639	10,272	4,723
Provision for credit losses on loans	4,518	2,211	18,661	6,418
Charge-offs	(3,462)	(2,611)	(13,081)	(2,938)
Recoveries	37	854	122	890
Balance, end of period	21,389	9,093	21,389	9,093
Commercial loans \| Commercial real estate \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			1,311
Commercial loans \| Commercial real estate \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			4,104
Commercial loans \| Construction and land development
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	1,512	316	290	372
Provision for credit losses on loans	534	(13)	233	(35)
Charge-offs	(250)	0	(324)	(44)
Recoveries	6	3	70	13
Balance, end of period	1,802	306	1,802	306
Commercial loans \| Construction and land development \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			809
Commercial loans \| Construction and land development \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			724
Residential real estate
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	4,830	2,424	2,499	2,041
Provision for credit losses on loans	(184)	(101)	226	587
Charge-offs	(101)	(79)	(496)	(455)
Recoveries	34	39	124	110
Balance, end of period	4,579	2,283	4,579	2,283
Residential real estate \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			1,015
Residential real estate \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			1,211
Consumer
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	2,087	2,219	2,642	2,154
Provision for credit losses on loans	422	402	994	1,057
Charge-offs	(307)	(519)	(1,271)	(1,540)
Recoveries	125	165	499	596
Balance, end of period	2,327	2,267	2,327	2,267
Consumer \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			57
Consumer \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			(594)
Lease financing
Financing Receivable, Impaired [Line Items]
Balance, beginning of period	6,155	2,212	2,294	2,089
Provision for credit losses on loans	(833)	243	3,903	1,358
Charge-offs	(628)	(394)	(2,414)	(1,544)
Recoveries	120	128	257	286
Balance, end of period	$ 4,814	$ 2,189	4,814	$ 2,189
Lease financing \| PCD (Previously PCI) loans
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			0
Lease financing \| ASU 2016-13
Financing Receivable, Impaired [Line Items]
Balance, beginning of period			$ 774

LOANS - Allowance for loan losses and recorded investment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Jan. 01, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Allowance for credit losses on loans:
Loans individually evaluated for impairment				$ 9,977
Loans collectively evaluated for impairment				788
Non-impaired loans collectively evaluated for impairment				16,080
Loans acquired with deteriorated credit quality				1,183
Total allowance for credit losses on loans	$ 52,771	$ 47,093	$ 40,811	28,028	$ 24,917	$ 25,925	$ 20,903
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				35,736
Impaired loans collectively evaluated for impairment				6,346
Non-impaired loans collectively evaluated for impairment				4,316,617
Loans acquired with deteriorated credit quality				42,711
Total recorded investment (loan balance)	4,941,466			4,401,410
Commercial loans
Recorded investment (loan balance):
Total recorded investment (loan balance)	3,217,809			2,790,422
Commercial loans \| Commercial
Allowance for credit losses on loans:
Total allowance for credit losses on loans	17,860	12,213		10,031	8,779	10,115	9,524
Recorded investment (loan balance):
Total recorded investment (loan balance)	729,745			628,056
Commercial loans \| Commercial real estate
Allowance for credit losses on loans:
Loans individually evaluated for impairment				5,968
Loans collectively evaluated for impairment				100
Non-impaired loans collectively evaluated for impairment				3,643
Loans acquired with deteriorated credit quality				561
Total allowance for credit losses on loans	21,389	20,296		10,272	9,093	8,639	4,723
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				22,698
Impaired loans collectively evaluated for impairment				764
Non-impaired loans collectively evaluated for impairment				1,482,935
Loans acquired with deteriorated credit quality				20,107
Total recorded investment (loan balance)				1,526,504
Commercial loans \| Construction and land development
Allowance for credit losses on loans:
Loans individually evaluated for impairment				0
Loans collectively evaluated for impairment				14
Non-impaired loans collectively evaluated for impairment				272
Loans acquired with deteriorated credit quality				4
Total allowance for credit losses on loans	1,802	1,512		290	306	316	372
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				1,245
Impaired loans collectively evaluated for impairment				104
Non-impaired loans collectively evaluated for impairment				201,707
Loans acquired with deteriorated credit quality				5,677
Total recorded investment (loan balance)	177,894			208,733
Commercial loans \| Commercial And Commercial Other
Allowance for credit losses on loans:
Loans individually evaluated for impairment				3,563
Loans collectively evaluated for impairment				69
Non-impaired loans collectively evaluated for impairment				6,380
Loans acquired with deteriorated credit quality				19
Total allowance for credit losses on loans				10,031
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				5,767
Impaired loans collectively evaluated for impairment				511
Non-impaired loans collectively evaluated for impairment				1,045,829
Loans acquired with deteriorated credit quality				3,078
Total recorded investment (loan balance)				1,055,185
Residential real estate
Allowance for credit losses on loans:
Loans individually evaluated for impairment				290
Loans collectively evaluated for impairment				444
Non-impaired loans collectively evaluated for impairment				1,269
Loans acquired with deteriorated credit quality				496
Total allowance for credit losses on loans	4,579	4,830		2,499	2,283	2,424	2,041
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				5,329
Impaired loans collectively evaluated for impairment				3,695
Non-impaired loans collectively evaluated for impairment				546,630
Loans acquired with deteriorated credit quality				12,637
Total recorded investment (loan balance)				568,291
Consumer
Allowance for credit losses on loans:
Loans individually evaluated for impairment				0
Loans collectively evaluated for impairment				39
Non-impaired loans collectively evaluated for impairment				2,500
Loans acquired with deteriorated credit quality				103
Total allowance for credit losses on loans	2,327	2,087		2,642	2,267	2,219	2,154
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				0
Impaired loans collectively evaluated for impairment				376
Non-impaired loans collectively evaluated for impairment				708,528
Loans acquired with deteriorated credit quality				1,212
Total recorded investment (loan balance)				710,116
Lease financing
Allowance for credit losses on loans:
Loans individually evaluated for impairment				156
Loans collectively evaluated for impairment				122
Non-impaired loans collectively evaluated for impairment				2,016
Loans acquired with deteriorated credit quality				0
Total allowance for credit losses on loans	4,814	$ 6,155		2,294	$ 2,189	$ 2,212	$ 2,089
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment				697
Impaired loans collectively evaluated for impairment				896
Non-impaired loans collectively evaluated for impairment				330,988
Loans acquired with deteriorated credit quality				0
Total recorded investment (loan balance)	$ 395,534			$ 332,581

LOANS - Risk rating (Details)	9 Months Ended
LOANS - Risk rating (Details)	Sep. 30, 2020 region
Risk category
Number of main regions	4
Commercial loans \| Credit Risk State One
Risk category
Commercial loans risk rating	0-5
Commercial loans \| Credit Risk State Two
Risk category
Commercial loans risk rating	6
Commercial loans \| Credit Risk State Three
Risk category
Commercial loans risk rating	7
Commercial loans \| Credit Risk State Four
Risk category
Commercial loans risk rating	8
Commercial loans \| Credit Risk State Default
Risk category
Commercial loans risk rating	9+ and nonaccrual
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State One \| Minimum
Risk category
Consumer loans and equipment finance loans and leases days past due	0 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State One \| Maximum
Risk category
Consumer loans and equipment finance loans and leases days past due	14 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Two \| Minimum
Risk category
Consumer loans and equipment finance loans and leases days past due	15 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Two \| Maximum
Risk category
Consumer loans and equipment finance loans and leases days past due	29 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Three \| Minimum
Risk category
Consumer loans and equipment finance loans and leases days past due	30 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Three \| Maximum
Risk category
Consumer loans and equipment finance loans and leases days past due	59 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Four \| Minimum
Risk category
Consumer loans and equipment finance loans and leases days past due	60 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Four \| Maximum
Risk category
Consumer loans and equipment finance loans and leases days past due	89 days
Consumer Loans And Equipment Finance Loans And Leases \| Credit Risk State Default \| Minimum
Risk category
Consumer loans and equipment finance loans and leases days past due	90 days

LOANS - Non-accrual (Details) - USD ($) $ in Thousands	3 Months Ended
LOANS - Non-accrual (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Nonaccrual
Nonaccrual		$ 62,985	$ 38,401
Nonaccrual with no allowance for credit loss		25,425	15,134
Amount of financing receivable reclassified to non-accrual	$ 9,800
Commercial loans
Nonaccrual
Nonaccrual		48,843	28,889
Nonaccrual with no allowance for credit loss		24,580	11,683
Commercial loans \| Commercial
Nonaccrual
Nonaccrual		2,844	1,492
Nonaccrual with no allowance for credit loss		380	119
Commercial loans \| Commercial other
Nonaccrual
Nonaccrual		1,558	4,351
Nonaccrual with no allowance for credit loss		0	1,519
Commercial loans \| Commercial real estate non-owner occupied
Nonaccrual
Nonaccrual		12,852	10,915
Nonaccrual with no allowance for credit loss		7,277	4,572
Commercial loans \| Commercial real estate owner occupied
Nonaccrual
Nonaccrual		14,044	4,396
Nonaccrual with no allowance for credit loss		9,563	2,648
Commercial loans \| Multi-family
Nonaccrual
Nonaccrual		10,331	6,231
Nonaccrual with no allowance for credit loss		2,325	1,430
Commercial loans \| Farmland
Nonaccrual
Nonaccrual		0	200
Nonaccrual with no allowance for credit loss		0	150
Commercial loans \| Construction and land development
Nonaccrual
Nonaccrual		7,214	1,304
Nonaccrual with no allowance for credit loss		5,035	1,245
Residential real estate \| Residential first lien
Nonaccrual
Nonaccrual		8,720	6,140
Nonaccrual with no allowance for credit loss		845	2,416
Residential real estate \| Other residential
Nonaccrual
Nonaccrual		2,339	1,656
Nonaccrual with no allowance for credit loss		0	912
Consumer
Nonaccrual
Nonaccrual		392	341
Nonaccrual with no allowance for credit loss		0	7
Lease financing
Nonaccrual
Nonaccrual		2,691	1,375
Nonaccrual with no allowance for credit loss		$ 0	$ 116

LOANS - Impaired Loans with interest recognized (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	636,000,000	532,000	2,600,000	1,900,000
Recognized interest income on loans modified under troubled debt restructurings	$ 17,000	$ 26,000	$ 46,000	$ 89,000

LOANS - Collateral dependent loans (Details) - Commercial loans $ in Thousands	Sep. 30, 2020 USD ($)
Summary of loans
Collateral dependent loans	$ 24,441
Commercial real estate non-owner occupied
Summary of loans
Collateral dependent loans	8,389
Commercial real estate owner occupied
Summary of loans
Collateral dependent loans	824
Multi-family
Summary of loans
Collateral dependent loans	10,196
Construction and land development
Summary of loans
Collateral dependent loans	$ 5,032

LOANS - TDRs by portfolio (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Troubled debt restructuring
Allowance for credit loss on troubled debt restructuring	$ 1,200,000	$ 2,000,000.0
Unfunded commitments	0	0
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	2,653,000	3,318,000
TDR's Nonaccrual	10,073,000	12,418,000
Total	12,726,000	15,736,000
Commercial loans \| Commercial
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	447,000	435,000
TDR's Nonaccrual	610,000	369,000
Total	1,057,000	804,000
Commercial loans \| Commercial real estate
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	874,000	1,720,000
TDR's Nonaccrual	4,879,000	9,834,000
Total	5,753,000	11,554,000
Commercial loans \| Construction and land development
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	40,000	45,000
TDR's Nonaccrual	977,000	167,000
Total	1,017,000	212,000
Residential real estate
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	1,264,000	1,083,000
TDR's Nonaccrual	3,565,000	1,993,000
Total	4,829,000	3,076,000
Consumer
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	28,000	35,000
TDR's Nonaccrual	0	0
Total	28,000	35,000
Lease financing
TDRs by loan portfolio (excluding PCI loans):
TDR's Accruing	0	0
TDR's Nonaccrual	42,000	55,000
Total	42,000	$ 55,000
Performing
Troubled debt restructuring
TDRs, individually evaluated for impairment, threshold	$ 50,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) loan	Sep. 30, 2019 USD ($) loan	Sep. 30, 2020 USD ($) loan	Sep. 30, 2019 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan	14	8	31	24
Pre-modification outstanding balance	$ 1,736	$ 520	$ 4,303	$ 3,100
Post-modification outstanding balance	$ 1,657	$ 502	$ 4,067	$ 2,928
Commercial loans \| Commercial
Troubled debt restructurings:
Number of loans \| loan	0	0	2	1
Pre-modification outstanding balance	$ 0	$ 0	$ 432	$ 249
Post-modification outstanding balance	$ 0	$ 0	$ 429	$ 249
Commercial loans \| Commercial real estate
Troubled debt restructurings:
Number of loans \| loan	2	0	4	3
Pre-modification outstanding balance	$ 164	$ 0	$ 797	$ 1,924
Post-modification outstanding balance	$ 129	$ 0	$ 735	$ 1,837
Commercial loans \| Construction and land development
Troubled debt restructurings:
Number of loans \| loan	1	1	3	2
Pre-modification outstanding balance	$ 526	$ 159	$ 1,010	$ 221
Post-modification outstanding balance	$ 494	$ 155	$ 966	$ 170
Residential real estate
Troubled debt restructurings:
Number of loans \| loan	9	7	20	16
Pre-modification outstanding balance	$ 1,037	$ 361	$ 2,055	$ 691
Post-modification outstanding balance	$ 1,025	$ 347	$ 1,928	$ 664
Consumer
Troubled debt restructurings:
Number of loans \| loan	2	0	2	2
Pre-modification outstanding balance	$ 9	$ 0	$ 9	$ 15
Post-modification outstanding balance	$ 9	$ 0	$ 9	$ 8
Lease financing
Troubled debt restructurings:
Number of loans \| loan	0	0	0	0
Pre-modification outstanding balance	$ 0	$ 0	$ 0	$ 0
Post-modification outstanding balance	0	$ 0	0	$ 0
COVID-19
Troubled debt restructurings that subsequently defaulted
Modifications not considered TDRs	$ 279,300		$ 279,300

PREMISES AND EQUIPMENT, NET - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 114,700		$ 114,700		$ 128,265
Accumulated depreciation	(39,733)		(39,733)		(37,210)
Premises and equipment, net	74,967		74,967		91,055
Depreciation on premises and equipment	2,200	$ 1,800	5,499	$ 4,947
Land
Property, Plant and Equipment [Line Items]
Premises and equipment gross	16,158		16,158		19,123
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment gross	66,067		66,067		77,296
Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment gross	$ 32,475		$ 32,475		$ 31,846

PREMISES AND EQUIPMENT, NET - Narrative (Details) ft² in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) ft² branch	Sep. 30, 2020 USD ($) ft² branch	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) ft² branch	Sep. 30, 2019 USD ($)
Property, Plant and Equipment [Abstract]
Branches planned to be closed or consolidated \| branch	13	13		13
Office space to be vacated (in sq ft) \| ft²	23	23		23
Impairment related to branch optimization	$ 12,700	$ 12,651	$ 3,229	$ 12,857	$ 3,229
Reclassification from premises and equipment, net to other assets	$ 2,300

LEASES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
LEASES
Options to extend the leases			true
Renewal term of lease (in years)	10 years		10 years
Operating lease right-of-use asset	$ 9,459		$ 9,459		$ 14,224
Operating lease liabilities	12,428		12,428		15,369
Operating lease cost	883	$ 835	2,453	$ 2,250
Operating cash flows from leases	942	887	2,669	2,370
Right-of-use assets obtained in exchange for lease obligations	96	$ 6,434	1,536	$ 18,715
Right-of-use assets derecognized due to terminations or impairment	$ (4,440)		$ (4,453)
Weighted average remaining lease term	8 years 3 months 18 days	8 years 4 months 24 days	8 years 3 months 18 days	8 years 4 months 24 days
Weighted average discount rate	2.89%	2.98%	2.89%	2.98%
Projected minimum rental payments
2020 remaining	$ 394		$ 394
2021	2,346		2,346
2022	2,189		2,189
2023	1,900		1,900
2024	1,545		1,545
Thereafter	5,686		5,686
Total future minimum lease payments	14,060		14,060
Less imputed interest	(1,632)		(1,632)
Total operating lease liabilities	$ 12,428		$ 12,428		$ 15,369
Minimum
LEASES
Remaining lease terms	1 month		1 month
Maximum
LEASES
Remaining lease terms	13 years		13 years

LOAN SERVICING RIGHTS - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
MORTGAGE SERVICING RIGHTS
Prepayment rate	8.18%	8.20%
Discount rate	11.45%	11.02%
Loan servicing rights	$ 42,465	$ 53,824
Mortgage servicing rights held for sale	1,308	1,972
Commercial FHA Mortgage Loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	3,730,000	4,080,000
SBA
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	48,300	48,200
Loan servicing rights	1,100	1,100
Residential Mortgage Loans
MORTGAGE SERVICING RIGHTS
Principal balances of loans serviced for others	384,200	381,600
Mortgage servicing rights held for sale	$ 1,300	$ 2,000

LOAN SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Loan servicing rights:
Balance, beginning of period	$ 56,751	$ 56,462	$ 57,637	$ 56,252
Balance, end of period	56,278	56,304	56,278	56,304
Valuation allowances:
Balance, beginning of period	13,519	2,271	4,944	2,805
Impairment	1,418	1,060	9,993	1,085
Recapture	0	0	0	(559)
Balance, end of period	14,937	3,331	14,937	3,331
Loan servicing rights, net	41,341	52,973	41,341	52,973
Fair value	41,341	52,973	41,341	52,973	$ 43,232	$ 52,693	$ 54,191	$ 53,447
Commercial FHA Mortgage Loans
Loan servicing rights:
Originated servicing	341	526	998	2,089
Amortization	$ (814)	$ (684)	$ (2,357)	$ (2,037)

GOODWILL AND INTANGIBLE ASSETS - Goodwill by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Goodwill [Line Items]
Goodwill	$ 161,904	$ 171,758
Banking
Goodwill [Line Items]
Goodwill	157,158	156,120
Commercial FHA Origination and Servicing
Goodwill [Line Items]
Goodwill	0	10,892
Wealth Management
Goodwill [Line Items]
Goodwill	$ 4,746	$ 4,746

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 28, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Finite-lived intangible assets
Amortization of intangible assets		$ 1,557	$ 1,803	$ 4,948	$ 5,286
Commercial FHA Origination and Servicing
Finite-lived intangible assets
Principal balances of loans serviced for others		$ 3,730,000		$ 3,730,000
Goodwill derecognized as a result of sale	$ 10,900

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-lived intangible assets
Gross carrying amount	$ 71,083	$ 71,083
Accumulated amortization	(41,145)	(36,197)
Total	29,938	34,886
Core deposit intangibles
Finite-lived intangible assets
Gross carrying amount	57,012	57,012
Accumulated amortization	(34,737)	(30,674)
Total	22,275	26,338
Customer relationship intangibles
Finite-lived intangible assets
Gross carrying amount	14,071	14,071
Accumulated amortization	(6,408)	(5,523)
Total	$ 7,663	$ 8,548

DERIVATIVE INSTRUMENTS - Interest Rate Lock Commitments and Forward Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount	$ 368,267	$ 443,706
Fair value gain	2,996	3,350
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	214,403	222,654
Fair value gain	2,996	3,350
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	153,864	221,052
Notional amount, liability derivatives	45,613	0
Fair value gain	0	0
Fair value of liability derivatives	$ 74	$ 0

DERIVATIVE INSTRUMENTS - Interest Rate Swap Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Derivative disclosures
Derivative, gain (loss) on derivative, net	$ (1,700)	$ 513,000	$ (428)	$ (188)
Fair value gain	2,996		2,996		$ 3,350
Interest rate swap contracts
Derivative disclosures
Notional amount of interest rate swaps	8,600		8,600		9,000
Interest rate swap contracts \| Other assets
Derivative disclosures
Fair value gain	$ 899		$ 899		$ 306

DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Derivative disclosures
Notional amount	$ 368,267		$ 443,706
Stockholders' equity	621,880	$ 633,589	$ 661,911	$ 655,522	$ 639,888	$ 608,525
Accumulated Gain (Loss), Net, Cash Flow Hedges
Derivative disclosures
Stockholders' equity	812
Cash Flow Hedge \| Other Liabilities
Derivative disclosures
Derivative liability	1,100
Cash Flow Hedge \| Receive Fixed, Pay Variable Interest Rate Swaps
Derivative disclosures
Notional amount	$ 100,000
Derivative asset average remaining maturity	5 years 6 months
Cash Flow Hedge \| Receive Fixed, Pay Variable Interest Rate Swaps \| Long
Derivative disclosures
Weighted average rate	0.57%
Cash Flow Hedge \| Receive Fixed, Pay Variable Interest Rate Swaps \| Short
Derivative disclosures
Weighted average rate	0.23%
Cash Flow Hedge \| Future Starting Receive Fixed, Pay Variable Interest Rate Swaps
Derivative disclosures
Notional amount	$ 140,000

DEPOSITS (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Classification of deposits
Noninterest-bearing demand	$ 1,355,188	$ 1,019,472
Interest-bearing:
Checking	1,581,216	1,342,788
Money market	826,454	787,662
Savings	580,748	522,456
Time	685,130	871,876
Total deposits	$ 5,028,736	$ 4,544,254

SHORT-TERM BORROWINGS (Details) - USD ($)	9 Months Ended	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Short-term Debt [Line Items]
Outstanding at period-end	$ 58,625,000	$ 82,029,000
Average amount outstanding	59,592,000	121,168,000
Maximum amount outstanding at any month end	$ 77,136,000	$ 138,907,000
Weighted average interest rate:
During period	0.35%	0.69%
End of period	0.14%	0.67%
Short-Term Borrowings
Investment securities pledged/collateralized for secured borrowings	$ 72,000,000.0	$ 87,400,000
Line of credit	0	0
Available federal funders lines of credit	20,000,000.0
Payroll Protection Program Loans, Liquidity
Short-Term Borrowings
Line of credit facility, maximum borrowing capacity	250,000,000.0
Commercial real estate
Short-Term Borrowings
Loans pledged as collateral	66,400,000	24,300,000
Federal Reserve Discount Window
Short-Term Borrowings
Line of credit	$ 52,700,000	$ 21,600,000

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 693,640	$ 493,311
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances, collateral for mortgage and home equity line of credit loans	$ 1,900,000	1,940,000
Series G Preferred Stock
Federal Home Loan Bank Advances, Interest Rate Information
Preferred stock, shares issued (in shares)	181
Preferred stock, par value (in dollars per share)	$ 1,000
Midland States Bancorp, Inc. \| Series G Preferred Stock
FHLB ADVANCES AND OTHER BORROWINGS
Long term debt	$ 181	181
Midland States Bank \| Fixed rate, fixed term maturing through June 2023
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 128,459	$ 28,130
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate	0.71%	2.56%
Midland States Bank \| Putable fixed rate loan maturing through August 2021
FHLB ADVANCES AND OTHER BORROWINGS
Total FHLB advances and other borrowings	$ 565,000	$ 465,000
Federal Home Loan Bank Advances, Interest Rate Information
FHLB advances interest rate	2.02%	2.34%

SUBORDINATED DEBT (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
SUBORDINATED DEBT (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Subordinated Borrowing [Line Items]
Carrying amount		$ 169,702	$ 176,653
LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate	4.35%
6% Subordinated Debt
Subordinated Borrowing [Line Items]
Fixed interest rate	6.00%	6.00%
Face amount		$ 31,075	38,325
Carrying amount		$ 31,075	38,273
Repurchase of debt	$ 7,300
Duration with fixed interest rate	5 years
Losses from debt repurchase	$ (193)
6% Subordinated Debt \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate		4.35%
6.5% Subordinated Debt
Subordinated Borrowing [Line Items]
Fixed interest rate		6.50%
Face amount		$ 550
Carrying amount		$ 545	544
6.25% Subordinated Debt
Subordinated Borrowing [Line Items]
Fixed interest rate		6.25%
Face amount		$ 40,000
Carrying amount		$ 39,545	39,496
6.25% Subordinated Debt \| LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate		4.23%
5% Subordinate Debt
Subordinated Borrowing [Line Items]
Fixed interest rate		5.00%
Face amount		$ 72,750
Carrying amount		$ 71,721	71,549
5% Subordinate Debt \| Three month SOFR
Subordinated Borrowing [Line Items]
Variable interest rate		3.61%
5.5% Subordinate Debt
Subordinated Borrowing [Line Items]
Fixed interest rate		5.50%
Face amount		$ 27,250
Carrying amount		$ 26,816	$ 26,791
5.5% Subordinate Debt \| Three month SOFR
Subordinated Borrowing [Line Items]
Variable interest rate		4.05%

EARNINGS PER SHARE - Narrative (Details) - shares	3 Months Ended		9 Months Ended
EARNINGS PER SHARE - Narrative (Details) - shares	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	595,660	91,943	492,443	91,943

EARNINGS PER SHARE - Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Net income	$ 86	$ 12,655	$ 14,204	$ 42,992
Preferred dividends declared	0	(26)	0	(191)
Preferred stock, premium amortization	0	48	0	145
Net income available to common shareholders	86	12,677	14,204	42,946
Common shareholder dividends	(6,047)	(5,914)	(18,732)	(17,481)
Unvested restricted stock award dividends	(64)	(48)	(194)	(144)
Undistributed earnings to unvested restricted stock awards	0	(52)	0	(202)
Undistributed earnings to common shareholders	(6,025)	6,663	(4,722)	25,119
Basic
Distributed earnings to common shareholders	6,047	5,914	18,732	17,481
Undistributed earnings to common shareholders	(6,025)	6,663	(4,722)	25,119
Total common shareholders earnings, basic	22	12,577	14,010	42,600
Diluted
Distributed earnings to common shareholders	6,047	5,914	18,732	17,481
Undistributed earnings to common shareholders	(6,025)	6,663	(4,722)	25,119
Total common shareholders earnings, basic	22	12,577	14,010	42,600
Add back:
Undistributed earnings reallocated from unvested restricted stock awards	0	1	0	2
Total common shareholders earnings, diluted	$ 22	$ 12,578	$ 14,010	$ 42,602
Weighted average common shares outstanding, basic (in shares)	22,937,837	24,488,422	23,567,000	24,190,574
Options (in shares)	0	196,107	11,518	209,489
Weighted average common shares outstanding, diluted (in shares)	22,937,837	24,684,529	23,578,518	24,400,063
Basic earnings per common share (in dollars per share)	$ 0.00	$ 0.51	$ 0.59	$ 1.76
Diluted earnings per common share (in dollars per share)	$ 0.00	$ 0.51	$ 0.59	$ 1.75

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Assets
Investment securities available for sale:	$ 609,831		$ 609,831		$ 649,433
Equity securities	9,143		9,143		5,621
Loans held for sale	62,500		62,500		16,431
Assets measured at fair value on a non-recurring basis:
Mortgage servicing rights held for sale	1,308		1,308		1,972
Losses recognized on assets measured on non-recurring basis
Loan servicing rights	(1,418)	$ (1,060)	(9,993)	$ (526)
Mortgage servicing rights held for sale	(188)	70	(1,075)	585
U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale:	32,717		32,717		60,020
Mortgage-backed securities - non-agency
Assets
Investment securities available for sale:	23,972		23,972		17,148
State and municipal securities
Assets
Investment securities available for sale:	128,002		128,002		124,555
Corporate securities
Assets
Investment securities available for sale:	135,961		135,961		122,736
Recurring member
Assets
Equity securities	9,143		9,143		5,621
Loans held for sale	62,500		62,500		16,431
Total	685,369		685,369		675,141
Liabilities
Forward commitments to sell mortgage-backed securities	74		74
Derivative liability	2,019		2,019		306
Total	2,093		2,093
Recurring member \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale:	32,717		32,717		60,020
Recurring member \| Mortgage-backed securities - agency
Assets
Investment securities available for sale:	289,179		289,179		324,974
Recurring member \| Mortgage-backed securities - non-agency
Assets
Investment securities available for sale:	23,972		23,972		17,148
Recurring member \| State and municipal securities
Assets
Investment securities available for sale:	128,002		128,002		124,555
Recurring member \| Corporate securities
Assets
Investment securities available for sale:	135,961		135,961		122,736
Recurring member \| Interest rate lock commitments
Assets
Derivative assets	2,996		2,996		3,350
Recurring member \| Interest rate swap contracts
Assets
Derivative assets	899		899		306
Recurring member \| Level 1
Assets
Equity securities	0		0		0
Loans held for sale					0
Total	0		0		0
Liabilities
Forward commitments to sell mortgage-backed securities	0		0
Derivative liability	0		0		0
Total	0		0
Recurring member \| Level 1 \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 1 \| Mortgage-backed securities - agency
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 1 \| Mortgage-backed securities - non-agency
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 1 \| State and municipal securities
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 1 \| Corporate securities
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 1 \| Interest rate lock commitments
Assets
Derivative assets	0		0		0
Recurring member \| Level 1 \| Interest rate swap contracts
Assets
Derivative assets	0		0		0
Recurring member \| Level 2
Assets
Equity securities	9,143		9,143		5,621
Loans held for sale	62,500		62,500		16,431
Total	684,409		684,409		674,186
Liabilities
Forward commitments to sell mortgage-backed securities	74		74
Derivative liability	2,019		2,019		306
Total	2,093		2,093
Recurring member \| Level 2 \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale:	32,717		32,717		60,020
Recurring member \| Level 2 \| Mortgage-backed securities - agency
Assets
Investment securities available for sale:	289,179		289,179		324,974
Recurring member \| Level 2 \| Mortgage-backed securities - non-agency
Assets
Investment securities available for sale:	23,972		23,972		17,148
Recurring member \| Level 2 \| State and municipal securities
Assets
Investment securities available for sale:	128,002		128,002		124,555
Recurring member \| Level 2 \| Corporate securities
Assets
Investment securities available for sale:	135,001		135,001		121,781
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative assets	2,996		2,996		3,350
Recurring member \| Level 2 \| Interest rate swap contracts
Assets
Derivative assets	899		899		306
Recurring member \| Level 3
Assets
Equity securities	0		0		0
Loans held for sale	0		0		0
Total	960		960		955
Liabilities
Forward commitments to sell mortgage-backed securities	0		0
Derivative liability	0		0		0
Total	0		0
Recurring member \| Level 3 \| U.S. government sponsored entities and U.S. agency securities
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 3 \| Mortgage-backed securities - agency
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 3 \| Mortgage-backed securities - non-agency
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 3 \| State and municipal securities
Assets
Investment securities available for sale:	0		0		0
Recurring member \| Level 3 \| Corporate securities
Assets
Investment securities available for sale:	960		960		955
Recurring member \| Level 3 \| Interest rate lock commitments
Assets
Derivative assets	0		0		0
Recurring member \| Level 3 \| Interest rate swap contracts
Assets
Derivative assets	0		0		0
Non recurring member
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	42,465		42,465		53,824
Mortgage servicing rights held for sale	1,308		1,308		1,972
Nonperforming loans	26,596		26,596		14,693
Other real estate owned	3,287		3,287
Assets held for sale	4,585		4,585		3,974
Losses recognized on assets measured on non-recurring basis
Loan servicing rights	(1,418)	(1,060)	(9,993)	(526)
Mortgage servicing rights held for sale	(188)	70	(1,075)	585
Nonperforming loans	(5,467)	(6,187)	(21,681)	(8,420)
Other real estate owned	(25)	0	(1,282)	(16)
Assets held for sale	(10,197)	(3,139)	(10,403)	(3,139)
Total loss on assets measured on a nonrecurring basis	(17,295)	$ (10,316)	(44,434)	$ (11,516)
Non recurring member \| Level 1
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	0		0		0
Mortgage servicing rights held for sale	0		0		0
Nonperforming loans	0		0		0
Other real estate owned	0		0
Assets held for sale	0		0		0
Non recurring member \| Level 2
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	0		0		0
Mortgage servicing rights held for sale	0		0		0
Nonperforming loans	26,596		26,596		12,518
Other real estate owned	3,287		3,287
Assets held for sale	4,585		4,585		3,974
Non recurring member \| Level 3
Assets measured at fair value on a non-recurring basis:
Loan servicing rights	42,465		42,465		53,824
Mortgage servicing rights held for sale	1,308		1,308		1,972
Nonperforming loans	0		0		2,175
Other real estate owned	0		0
Assets held for sale	$ 0		$ 0		$ 0

FAIR VALUE OF FINANCIAL INSTRUMENTS - Unobservable inputs (Level 3) (Details) - Corporate securities - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Option, Quantitative Disclosures [Line Items]
Balance, beginning of period	$ 921	$ 935	$ 955	$ 1,923
Total realized in earnings	0	6	8	48
Total unrealized in other comprehensive income	39	(7)	5	5
Net settlements (principal and interest)	0	(6)	(8)	(1,048)
Balance, end of period	$ 960	$ 928	$ 960	$ 928

FAIR VALUE OF FINANCIAL INSTRUMENTS - Quantitative Information (Details) $ in Thousands	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available for sale:	$ 609,831	$ 649,433
Non recurring member
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	42,465	53,824
Nonperforming loans	26,596	14,693
Level 3 \| Non recurring member
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	42,465	53,824
Nonperforming loans	$ 0	$ 2,175
Level 3 \| Non recurring member \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Servicing Asset, Valuation Technique [Extensible List]		us-gaap:ValuationTechniqueOptionPricingModelMember
Level 3 \| Non recurring member \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Servicing Asset, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| Non recurring member \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Servicing Asset, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| Non recurring member \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Servicing Asset, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| Non recurring member \| Discounted cash flow \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	$ 41,341	$ 52,693
Level 3 \| Non recurring member \| Discounted cash flow \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	1,124	1,131
Level 3 \| Non recurring member \| Discounted cash flow \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan servicing rights	$ 1,308	$ 1,972
Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	11.70	0.1170
Level 3 \| Non recurring member \| Fair value of collateral \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonperforming loans		$ 2,175
Level 3 \| Recurring member \| Net Market Price \| Corporate securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available for sale:	$ 960	$ 955
Debt Securities, Available-for-sale, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueConsensusPricingModelMember	us-gaap:ValuationTechniqueConsensusPricingModelMember
Minimum \| Level 3 \| Net Market Price \| Corporate securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available for sale, measurement input	(0.025)	(0.020)
Minimum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.00	0.0800
Minimum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.31	0.0831
Minimum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	13.44	0.0864
Minimum \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	10.00	0.1000
Minimum \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	9.00	0.0950
Minimum \| Level 3 \| Non recurring member \| Fair value of collateral \| Discount for type of property, \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount for type of property, age of appraisal and current status		0.0432
Maximum \| Level 3 \| Net Market Price \| Corporate securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available for sale, measurement input	0.025	0.025
Maximum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	18.00	18.00
Maximum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	9.21	9.21
Maximum \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	26.28	26.28
Maximum \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	27.00	14.00
Maximum \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	11.50	12.50
Maximum \| Level 3 \| Non recurring member \| Fair value of collateral \| Discount for type of property, \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount for type of property, age of appraisal and current status		0.0800
Weighted Average \| Level 3 \| Net Market Price \| Corporate securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities available for sale, measurement input	0	0.015
Weighted Average \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.18	8.20
Weighted Average \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| SBA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	8.60	8.60
Weighted Average \| Level 3 \| Non recurring member \| Discounted cash flow \| Prepayment speed \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	20.28	12.42
Weighted Average \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| Commercial
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	11.45	11.02
Weighted Average \| Level 3 \| Non recurring member \| Discounted cash flow \| Discount rate \| MSR held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input for servicing asset	10.13	10.75
Weighted Average \| Level 3 \| Non recurring member \| Fair value of collateral \| Discount for type of property, \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount for type of property, age of appraisal and current status		5.22

FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair value option and gains and losses from fair value changes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	$ 62,500		$ 62,500		$ 16,431
Difference	1,211		1,211		652
Contractual principal	61,289		61,289		15,779
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(270)	$ (117)	517	$ (430)
Commercial loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	8,610		8,610		8,236
Difference	167		167		206
Contractual principal	8,443		8,443		8,030
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(156)	(169)	(38)	(463)
Residential real estate
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	19,629		19,629		8,195
Difference	1,044		1,044		446
Contractual principal	18,585		18,585		7,749
Gains and losses from fair value changes
Gains and losses from fair value changes of loan held for sales	(114)	$ 52	555	$ 33
Consumer
Fair Value, Option, Quantitative Disclosures [Line Items]
Aggregate fair value	34,261		34,261		0
Difference	0		0		0
Contractual principal	$ 34,261		$ 34,261		$ 0

FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying values and fair value (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Accrued interest receivable	$ 25,061	$ 16,346
Liabilities
Trust preferred debentures	48,682	48,288
Accrued interest payable	4,051	6,400
Level 1
Assets
Cash and due from banks	459,473	392,694
Federal funds sold	1,723	1,811
Nonmarketable equity securities	0	0
Loans, net	0	0
Accrued interest receivable	0	0
Liabilities
Deposits	0	0
Short-term borrowings	0	0
FHLB and other borrowings	0	0
Subordinated debt	0	0
Trust preferred debentures	0	0
Accrued interest payable	0	0
Level 2
Assets
Cash and due from banks	0	0
Federal funds sold	0	0
Nonmarketable equity securities	50,765	44,505
Loans, net	0	0
Accrued interest receivable	25,061	16,346
Liabilities
Deposits	5,038,033	4,548,327
Short-term borrowings	58,625	82,029
FHLB and other borrowings	729,192	506,832
Subordinated debt	175,392	182,189
Trust preferred debentures	49,245	53,811
Accrued interest payable	4,051	6,400
Level 3
Assets
Cash and due from banks	0	0
Federal funds sold	0	0
Nonmarketable equity securities	0	0
Loans, net	4,954,066	4,385,768
Accrued interest receivable	0	0
Liabilities
Deposits	0	0
Short-term borrowings	0	0
FHLB and other borrowings	0	0
Subordinated debt	0	0
Trust preferred debentures	0	0
Accrued interest payable		0
Carrying value
Assets
Cash and due from banks	459,473	392,694
Federal funds sold	1,723	1,811
Nonmarketable equity securities	50,765	44,505
Loans, net	4,888,695	4,373,382
Accrued interest receivable	25,061	16,346
Liabilities
Deposits	5,028,736	4,544,254
Short-term borrowings	58,625	82,029
FHLB and other borrowings	693,640	493,311
Subordinated debt	169,702	176,653
Trust preferred debentures	48,682	48,288
Accrued interest payable	4,051	6,400
Fair value
Assets
Cash and due from banks	459,473	392,694
Federal funds sold	1,723	1,811
Nonmarketable equity securities	50,765	44,505
Loans, net	4,954,066	4,385,768
Accrued interest receivable	25,061	16,346
Liabilities
Deposits	5,038,033	4,548,327
Short-term borrowings	58,625	82,029
FHLB and other borrowings	729,192	506,832
Subordinated debt	175,392	182,189
Trust preferred debentures	49,245	53,811
Accrued interest payable	$ 4,051	$ 6,400

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jan. 01, 2020	Dec. 31, 2019
Anticipated material loss	$ 0		$ 0
ACL for off-balance sheet credit exposures	2,400,000		2,400,000		$ 1,507,000
Losses as a result of make whole requests and loan repurchases	0	$ 0	0	$ 0
Liability for unresolved repurchase demands	327,000		327,000			$ 289,000
Commitments to extend credit
Loan commitments	966,620,000		966,620,000			725,506,000
Financial guarantees – standby letters of credit
Loan commitments	$ 15,036,000		$ 15,036,000			$ 106,678,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 49,980	$ 49,450	$ 145,620	$ 141,128
Provision for credit losses on loans	10,970	4,361	33,149	11,680
Noninterest income	18,919	19,606	46,913	56,268
Noninterest expense	54,659	48,025	138,116	129,316
Income before income taxes	3,270	16,670	21,268	56,400
Income taxes (benefit)	3,184	4,015	7,064	13,408
Net income	86	12,655	14,204	42,992
Total assets	6,700,045	6,113,904	6,700,045	6,113,904	$ 6,087,017
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)	52,867	52,445	154,844	149,893
Provision for credit losses on loans	10,970	4,361	33,149	11,680
Noninterest income	13,905	10,827	34,465	28,792
Noninterest expense	49,562	42,125	121,930	110,852
Income before income taxes	6,240	16,786	34,230	56,153
Income taxes (benefit)	205	3,018	7,185	12,627
Net income	6,035	13,768	27,045	43,526
Total assets	6,627,239	6,038,409	6,627,239	6,038,409
Wealth Management
Segment Reporting Information [Line Items]
Net interest income (expense)	0	0	0	0
Provision for credit losses on loans	0	0	0	0
Noninterest income	5,559	5,998	16,934	16,455
Noninterest expense	3,599	3,616	11,110	11,089
Income before income taxes	1,960	2,382	5,824	5,366
Income taxes (benefit)	541	561	1,623	1,397
Net income	1,419	1,821	4,201	3,969
Total assets	27,165	19,903	27,165	19,903
Commercial FHA Origination and Servicing
Segment Reporting Information [Line Items]
Net interest income (expense)	(25)	(203)	(97)	(517)
Provision for credit losses on loans	0	0	0	0
Noninterest income	(477)	2,840	(4,296)	11,194
Noninterest expense	1,796	2,520	5,846	8,335
Income before income taxes	(2,298)	117	(10,239)	2,342
Income taxes (benefit)	2,330	585	110	1,207
Net income	(4,628)	(468)	(10,349)	1,135
Total assets	74,698	79,201	74,698	79,201
Other
Segment Reporting Information [Line Items]
Net interest income (expense)	(2,862)	(2,792)	(9,127)	(8,248)
Provision for credit losses on loans	0	0	0	0
Noninterest income	(68)	(59)	(190)	(173)
Noninterest expense	(298)	(236)	(770)	(960)
Income before income taxes	(2,632)	(2,615)	(8,547)	(7,461)
Income taxes (benefit)	108	(149)	(1,854)	(1,823)
Net income	(2,740)	(2,466)	(6,693)	(5,638)
Total assets	$ (29,057)	$ (23,609)	$ (29,057)	$ (23,609)

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Chairman
Related Party Transaction [Line Items]
Payments to related party	$ 43	$ 76

REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Total noninterest income	$ 18,919	$ 19,606	$ 46,913	$ 56,268
Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - out-of-scope of Topic 606	7,260	6,076	11,149	19,062
Total noninterest income	18,919	19,606	46,913	56,268
Trust management/administration fees \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	4,054	4,397	12,536	12,096
Investment advisory fees \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	513	548	1,537	1,616
Investment brokerage fees \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	361	357	1,073	808
Other \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	631	696	1,788	1,935
Nonsufficient fund fees \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	1,335	2,096	4,162	5,651
Other \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	757	912	2,292	2,516
Interchange revenues \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	3,283	3,249	9,129	8,939
Merchant services revenue \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	396	367	1,051	1,131
Other \| Calculated Under Revenue Guidance in Effect Before Topic 606
Disaggregation of Revenue [Line Items]
Noninterest income - in-scope of Topic 606	$ 329	$ 908	$ 2,196	$ 2,514

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Aging Status of recorded investment
Past Due	$ 29,993
Nonaccrual	62,985	$ 38,401
Current	4,848,488
Total recorded investment (loan balance)	4,941,466	4,401,410
Commercial loans
Aging Status of recorded investment
Past Due	14,003
Nonaccrual	48,843	28,889
Current	3,154,963
Total recorded investment (loan balance)	3,217,809	2,790,422
Commercial loans \| Commercial
Aging Status of recorded investment
Past Due	701
Nonaccrual	2,844	1,492
Current	726,200
Total recorded investment (loan balance)	729,745	628,056
Commercial loans \| Commercial other
Aging Status of recorded investment
Past Due	7,361
Nonaccrual	1,558	4,351
Current	804,493
Total recorded investment (loan balance)	813,412	427,129
Commercial loans \| Commercial real estate
Aging Status of recorded investment
Total recorded investment (loan balance)		1,526,504
Commercial loans \| Commercial real estate non-owner occupied
Aging Status of recorded investment
Past Due	3,296
Nonaccrual	12,852	10,915
Current	808,163
Total recorded investment (loan balance)	824,311	825,874
Commercial loans \| Commercial real estate owner occupied
Aging Status of recorded investment
Past Due	2,157
Nonaccrual	14,044	4,396
Current	426,491
Total recorded investment (loan balance)	442,692	464,601
Commercial loans \| Multi-family
Aging Status of recorded investment
Past Due	62
Nonaccrual	10,331	6,231
Current	138,897
Total recorded investment (loan balance)	149,290	146,795
Commercial loans \| Farmland
Aging Status of recorded investment
Past Due	90
Nonaccrual	0	200
Current	80,375
Total recorded investment (loan balance)	80,465	89,234
Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due	336
Nonaccrual	7,214	1,304
Current	170,344
Total recorded investment (loan balance)	177,894	208,733
Residential real estate
Aging Status of recorded investment
Total recorded investment (loan balance)		568,291
Residential real estate \| Residential first lien
Aging Status of recorded investment
Past Due	974
Nonaccrual	8,720	6,140
Current	370,708
Total recorded investment (loan balance)	380,402	456,107
Residential real estate \| Other residential
Aging Status of recorded investment
Past Due	645
Nonaccrual	2,339	1,656
Current	87,443
Total recorded investment (loan balance)	90,427	112,184
Consumer
Aging Status of recorded investment
Nonaccrual	392	341
Total recorded investment (loan balance)		710,116
Consumer \| Consumer
Aging Status of recorded investment
Past Due	267
Nonaccrual	392
Current	82,253
Total recorded investment (loan balance)	82,912	100,732
Consumer \| Consumer other
Aging Status of recorded investment
Past Due	8,555
Nonaccrual	0
Current	765,827
Total recorded investment (loan balance)	774,382	609,384
Lease financing
Aging Status of recorded investment
Past Due	5,549
Nonaccrual	2,691	1,375
Current	387,294
Total recorded investment (loan balance)	395,534	332,581
30-59 days past due
Aging Status of recorded investment
Past Due	19,928
30-59 days past due \| Commercial loans
Aging Status of recorded investment
Past Due	10,019
30-59 days past due \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due	469
30-59 days past due \| Commercial loans \| Commercial other
Aging Status of recorded investment
Past Due	4,046
30-59 days past due \| Commercial loans \| Commercial real estate non-owner occupied
Aging Status of recorded investment
Past Due	2,990
30-59 days past due \| Commercial loans \| Commercial real estate owner occupied
Aging Status of recorded investment
Past Due	2,157
30-59 days past due \| Commercial loans \| Multi-family
Aging Status of recorded investment
Past Due	62
30-59 days past due \| Commercial loans \| Farmland
Aging Status of recorded investment
Past Due	90
30-59 days past due \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due	205
30-59 days past due \| Residential real estate \| Residential first lien
Aging Status of recorded investment
Past Due	0
30-59 days past due \| Residential real estate \| Other residential
Aging Status of recorded investment
Past Due	612
30-59 days past due \| Consumer \| Consumer
Aging Status of recorded investment
Past Due	248
30-59 days past due \| Consumer \| Consumer other
Aging Status of recorded investment
Past Due	5,272
30-59 days past due \| Lease financing
Aging Status of recorded investment
Past Due	3,777
60-89 days past due
Aging Status of recorded investment
Past Due	8,260
60-89 days past due \| Commercial loans
Aging Status of recorded investment
Past Due	3,078
60-89 days past due \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due	232
60-89 days past due \| Commercial loans \| Commercial other
Aging Status of recorded investment
Past Due	2,409
60-89 days past due \| Commercial loans \| Commercial real estate non-owner occupied
Aging Status of recorded investment
Past Due	306
60-89 days past due \| Commercial loans \| Commercial real estate owner occupied
Aging Status of recorded investment
Past Due	0
60-89 days past due \| Commercial loans \| Multi-family
Aging Status of recorded investment
Past Due	0
60-89 days past due \| Commercial loans \| Farmland
Aging Status of recorded investment
Past Due	0
60-89 days past due \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due	131
60-89 days past due \| Residential real estate \| Residential first lien
Aging Status of recorded investment
Past Due	572
60-89 days past due \| Residential real estate \| Other residential
Aging Status of recorded investment
Past Due	33
60-89 days past due \| Consumer \| Consumer
Aging Status of recorded investment
Past Due	19
60-89 days past due \| Consumer \| Consumer other
Aging Status of recorded investment
Past Due	3,283
60-89 days past due \| Lease financing
Aging Status of recorded investment
Past Due	1,275
Past due 90 days or more
Aging Status of recorded investment
Past Due	1,805
Past due 90 days or more \| Commercial loans
Aging Status of recorded investment
Past Due	906
Past due 90 days or more \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Commercial loans \| Commercial other
Aging Status of recorded investment
Past Due	906
Past due 90 days or more \| Commercial loans \| Commercial real estate non-owner occupied
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Commercial loans \| Commercial real estate owner occupied
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Commercial loans \| Multi-family
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Commercial loans \| Farmland
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Residential real estate \| Residential first lien
Aging Status of recorded investment
Past Due	402
Past due 90 days or more \| Residential real estate \| Other residential
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Consumer \| Consumer
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Consumer \| Consumer other
Aging Status of recorded investment
Past Due	0
Past due 90 days or more \| Lease financing
Aging Status of recorded investment
Past Due	$ 497
Non-PCI loans
Aging Status of recorded investment
Past Due		30,239
Nonaccrual		38,401
Current		4,290,059
Total recorded investment (loan balance)		4,358,699
Non-PCI loans \| Commercial loans
Aging Status of recorded investment
Total recorded investment (loan balance)		2,761,560
Non-PCI loans \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due		8,996
Nonaccrual		5,843
Current		1,037,268
Total recorded investment (loan balance)		1,052,107
Non-PCI loans \| Commercial loans \| Commercial real estate
Aging Status of recorded investment
Past Due		3,294
Nonaccrual		21,742
Current		1,481,361
Total recorded investment (loan balance)		1,506,397
Non-PCI loans \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due		1,611
Nonaccrual		1,304
Current		200,141
Total recorded investment (loan balance)		203,056
Non-PCI loans \| Residential real estate
Aging Status of recorded investment
Past Due		2,294
Nonaccrual		7,796
Current		545,564
Total recorded investment (loan balance)		555,654
Non-PCI loans \| Consumer
Aging Status of recorded investment
Past Due		10,855
Nonaccrual		341
Current		697,708
Total recorded investment (loan balance)		708,904
Non-PCI loans \| Lease financing
Aging Status of recorded investment
Past Due		3,189
Nonaccrual		1,375
Current		328,017
Total recorded investment (loan balance)		332,581
Non-PCI loans \| 30-59 days past due
Aging Status of recorded investment
Past Due		19,416
Non-PCI loans \| 30-59 days past due \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due		5,910
Non-PCI loans \| 30-59 days past due \| Commercial loans \| Commercial real estate
Aging Status of recorded investment
Past Due		2,895
Non-PCI loans \| 30-59 days past due \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due		1,539
Non-PCI loans \| 30-59 days past due \| Residential real estate
Aging Status of recorded investment
Past Due		588
Non-PCI loans \| 30-59 days past due \| Consumer
Aging Status of recorded investment
Past Due		6,701
Non-PCI loans \| 30-59 days past due \| Lease financing
Aging Status of recorded investment
Past Due		1,783
Non-PCI loans \| 60-89 days past due
Aging Status of recorded investment
Past Due		10,460
Non-PCI loans \| 60-89 days past due \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due		3,086
Non-PCI loans \| 60-89 days past due \| Commercial loans \| Commercial real estate
Aging Status of recorded investment
Past Due		399
Non-PCI loans \| 60-89 days past due \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due		72
Non-PCI loans \| 60-89 days past due \| Residential real estate
Aging Status of recorded investment
Past Due		1,561
Non-PCI loans \| 60-89 days past due \| Consumer
Aging Status of recorded investment
Past Due		4,154
Non-PCI loans \| 60-89 days past due \| Lease financing
Aging Status of recorded investment
Past Due		1,188
Non-PCI loans \| Past due 90 days or more
Aging Status of recorded investment
Past Due		363
Non-PCI loans \| Past due 90 days or more \| Commercial loans \| Commercial
Aging Status of recorded investment
Past Due		0
Non-PCI loans \| Past due 90 days or more \| Commercial loans \| Commercial real estate
Aging Status of recorded investment
Past Due		0
Non-PCI loans \| Past due 90 days or more \| Commercial loans \| Construction and land development
Aging Status of recorded investment
Past Due		0
Non-PCI loans \| Past due 90 days or more \| Residential real estate
Aging Status of recorded investment
Past Due		145
Non-PCI loans \| Past due 90 days or more \| Consumer
Aging Status of recorded investment
Past Due		0
Non-PCI loans \| Past due 90 days or more \| Lease financing
Aging Status of recorded investment
Past Due		$ 218