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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Oct. 31, 2016
Document and Entity Information
Entity Registrant Name	Midland States Bancorp, Inc.
Entity Central Index Key	0001466026
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		15,415,747
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 227,496	$ 211,976
Federal funds sold	534	499
Cash and cash equivalents	228,030	212,475
Investment securities available for sale, at fair value ($72,093 and $75,979 covered by a FDIC loss-share agreement at September 30, 2016 and December 31, 2015, respectively)	252,212	236,627
Investment securities held to maturity, at amortized cost (fair value of $88,590 and $92,816 at September 30, 2016 and December 31, 2015, respectively)	82,941	87,521
Loans	2,312,778	1,995,589
Allowance for loan losses	(15,559)	(15,988)
Total loans, net	2,297,219	1,979,601
Loans held for sale, at fair value	61,363	54,413
Premises and equipment, net	70,727	73,133
Other real estate owned	4,828	5,472
Nonmarketable equity securities	18,810	15,472
Accrued interest receivable	8,811	7,697
Mortgage servicing rights at lower of cost or market	64,689	66,651
Intangible assets	5,391	7,004
Goodwill	46,519	46,519
Cash surrender value of life insurance policies	74,276	52,729
Accrued income taxes receivable	1,450	8,754
Deferred tax assets, net		1,496
Other assets	30,461	29,260
Total assets	3,247,727	2,884,824
Deposits:
Noninterest-bearing	629,113	543,401
Interest- bearing	1,790,919	1,824,247
Total deposits	2,420,032	2,367,648
Short-term borrowings	138,289	107,538
FHLB advances and other borrowings	237,543	40,178
Subordinated debt	54,484	61,859
Trust preferred debentures	37,316	37,057
Accrued interest payable	1,875	979
Deferred tax liabilities, net	3,216
Other liabilities	33,182	36,509
Total liabilities	2,925,937	2,651,768
Shareholders’ Equity:
Common stock, $0.01 par value; 40,000,000 shares authorized; 15,404,423 and 11,797,404 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	154	118
Capital surplus	208,452	135,822
Retained earnings	103,813	90,911
Accumulated other comprehensive income	9,330	6,029
Total Midland States Bancorp, Inc. shareholders’ equity	321,749	232,880
Noncontrolling interest in subsidiaries	41	176
Total shareholders’ equity	321,790	233,056
Total liabilities and shareholders’ equity	$ 3,247,727	$ 2,884,824

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Available for sale, covered by FDIC loss-share	$ 72,093	$ 75,979
Investment securities held to maturity	$ 88,590	$ 92,816
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	15,404,423	11,797,404
Common stock, shares outstanding	0	11,797,404

CONSOLIDATED STATEMENT OF INCOME - USD ($)	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENT OF INCOME - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Loans:
Taxable	$ 26,905,000	$ 24,807,000	$ 78,142,000	$ 74,821,000
Tax exempt	254,000	309,000	899,000	852,000
Investment securities:
Taxable	2,940,000	2,784,000	8,726,000	8,589,000
Tax exempt	892,000	967,000	2,739,000	2,972,000
Federal funds sold and cash investments	195,000	82,000	762,000	262,000
Total interest income	31,186,000	28,949,000	91,268,000	87,496,000
Interest expense:
Deposits	2,189,000	1,921,000	6,701,000	5,320,000
Short-term borrowings	81,000	56,000	217,000	176,000
FHLB advances and other borrowings	306,000	111,000	698,000	634,000
Subordinated debt	873,000	1,054,000	2,985,000	1,671,000
Trust preferred debentures	472,000	370,000	1,373,000	1,240,000
Total interest expense	3,921,000	3,512,000	11,974,000	9,041,000
Net interest income	27,265,000	25,437,000	79,294,000	78,455,000
Provision for loan losses	1,392,000	6,699,000	3,146,000	10,075,000
Net interest income after provision for loan losses	25,873,000	18,738,000	76,148,000	68,380,000
Noninterest income:
Commercial FHA revenue	3,260,000	5,914,000	18,360,000	17,130,000
Residential mortgage banking revenue	4,990,000	3,490,000	7,148,000	14,305,000
Wealth management revenue	1,941,000	1,808,000	5,596,000	5,461,000
Merchant services revenue	427,000	419,000	1,287,000	1,097,000
Service charges on deposit accounts	1,044,000	1,022,000	2,916,000	2,990,000
Interchange revenue	920,000	895,000	2,829,000	2,703,000
FDIC loss-sharing expense		(57,000)	(1,661,000)	(354,000)
Gain on sales of investment securities, net	39,000	1,000	315,000	160,000
Other-than-temporary impairment on investment securities		(299,000)	(824,000)	(461,000)
Gain on sales of other real estate owned	33,000	92,000	112,000	417,000
Other income	2,283,000	1,179,000	5,494,000	3,235,000
Total noninterest income	14,937,000	14,464,000	41,572,000	46,683,000
Noninterest expense:
Salaries and employee benefits	16,568,000	14,932,000	48,967,000	49,588,000
Occupancy and equipment	3,271,000	3,114,000	9,815,000	9,727,000
Data processing	2,586,000	2,541,000	7,830,000	7,651,000
FDIC insurance	388,000	371,000	1,350,000	1,514,000
Professional	1,877,000	2,075,000	5,151,000	6,608,000
Marketing	717,000	855,000	2,009,000	2,247,000
Communications	546,000	506,000	1,609,000	1,791,000
Loan expense	314,000	789,000	1,351,000	2,349,000
Other real estate owned	179,000	203,000	748,000	660,000
Amortization of intangible assets	514,000	597,000	1,613,000	1,863,000
Other	1,703,000	1,840,000	6,762,000	6,073,000
Total noninterest expense	28,663,000	27,823,000	87,205,000	90,071,000
Income before income taxes	12,147,000	5,379,000	30,515,000	24,992,000
Income taxes	4,102,000	1,928,000	10,562,000	8,281,000
Net income	8,045,000	3,451,000	19,953,000	16,711,000
Less: net (loss) income attributable to noncontrolling interest in subsidiaries	(6,000)	6,000	(6,000)	82,000
Net income attributable to Midland States Bancorp, Inc.	$ 8,051,000	$ 3,445,000	$ 19,959,000	$ 16,629,000
Per common share data:
Basic earnings per common share	$ 0.51	$ 0.29	$ 1.46	$ 1.39
Diluted earnings per common share	$ 0.51	$ 0.28	$ 1.43	$ 1.36
Weighted average common shares outstanding	15,578,703	11,911,414	13,637,997	11,895,337
Weighted average diluted common shares outstanding	15,858,273	12,130,529	13,902,664	12,111,695

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 8,045	$ 3,451	$ 19,953	$ 16,711
Investment securities available for sale:
Unrealized (losses) gains that occurred during the period	(233)	2,136	5,789	222
Reclassification adjustment for realized net gains on sales of investment securities included in net income	(39)	(1)	(315)	(160)
Income tax effect	110	(859)	(2,203)	(25)
Change in investment securities available for sale, net of tax	(162)	1,276	3,271	37
Investment securities held to maturity:
Amortization of unrealized gain on investment securities transferred from available-for-sale	(3)	(49)	(42)	(187)
Income tax effect	1	20	17	103
Change in investment securities held to maturity, net of tax	(2)	(29)	(25)	(84)
Cash flow hedges:
Change in fair value of interest rate swap	32	21	93	56
Income tax effect	(13)	(13)	(38)	(25)
Change in cash flow hedges, net of tax	19	8	55	31
Other comprehensive (loss) income, net of tax	(145)	1,255	3,301	(16)
Total comprehensive income	7,900	4,706	23,254	16,695
Less: net (loss) income attributable to noncontrolling interest in subsidiaries	(6)	6	(6)	82
Total comprehensive income attributable to Midland States Bancorp, Inc.	$ 7,906	$ 4,700	$ 23,260	$ 16,613

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Midland States Bancorp, Inc.'s Shareholders' Equity IPO	Midland States Bancorp, Inc.'s Shareholders' Equity	Common stock IPO	Common stock	Capital surplus IPO	Capital surplus	Retained earnings	Accumulated other comprehensive income	Noncontrolling interests in subsidiaries	IPO	Total
Balance at the beginning of the period at Dec. 31, 2014		$ 219,456		$ 117		$ 134,423	$ 74,279	$ 10,637	$ 473		$ 219,929
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		16,629					16,629		82		16,711
Cash distributions to noncontrolling interests									(345)		(345)
Compensation expense for stock option grants		287				287					287
Amortization of restricted stock awards		389				389					389
Common dividends declared		(5,680)					(5,680)				(5,680)
Issuance of common stock under employee benefits plans		350		1		349					350
Other comprehensive income (loss)		(16)						(16)			(16)
Balance at the end of the period at Sep. 30, 2015		231,415		118		135,448	85,228	10,621	210		231,625
Balance at the beginning of the period at Dec. 31, 2015		232,880		118		135,822	90,911	6,029	176		233,056
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		19,959					19,959		(6)		19,953
Cash distributions to noncontrolling interests									(129)		(129)
Compensation expense for stock option grants		315				315					315
Amortization of restricted stock awards		387				387					387
Common dividends declared		(7,057)					(7,057)				(7,057)
Initial public offering of 3,590,065 shares of common stock, net of issuance costs	$ 71,475		$ 36		$ 71,439					$ 71,475
Issuance of common stock under employee benefits plans		489				489					489
Other comprehensive income (loss)		3,301						3,301			3,301
Balance at the end of the period at Sep. 30, 2016		$ 321,749		$ 154		$ 208,452	$ 103,813	$ 9,330	$ 41		$ 321,790

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical)	9 Months Ended
	Sep. 30, 2016 shares
IPO
Common stock shares	3,590,065

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 19,953,000	$ 16,711,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	3,146,000	10,075,000
Depreciation on premises and equipment	3,816,000	3,791,000
Amortization of intangible assets	1,613,000	1,863,000
FDIC loss-sharing expense	1,661,000	354,000
Amortization of restricted stock awards	387,000	389,000
Compensation expense for stock option grants	315,000	287,000
Increase in cash surrender value of life insurance	(1,547,000)	(1,016,000)
Investment securities amortization, net	840,000	905,000
Other-than-temporary impairment on investment securities	824,000	461,000
Gain on sales of investment securities, net	(315,000)	(160,000)
Gain on sales of other real estate owned	(112,000)	(417,000)
Write-down of other real estate owned	219,000	49,000
Origination of loans held for sale	(894,445,000)	(779,821,000)
Proceeds from sales of loans held for sale	907,306,000	836,133,000
Gain on loans sold and held for sale	(28,827,000)	(29,557,000)
Amortization of mortgage servicing rights	4,410,000	3,739,000
Impairment on mortgage servicing rights	6,093,000	676,000
Net change in operating assets and liabilities:
Accrued interest receivable	(1,114,000)	(150,000)
Accrued interest payable	896,000	823,000
Accrued income taxes receivable	7,304,000	(2,193,000)
Other assets	460,000	2,776,000
Other liabilities	(2,485,000)	5,945,000
Net cash provided by operating activities	30,398,000	71,663,000
Investment securities available for sale:
Purchases	(64,396,000)	(43,244,000)
Sales	31,191,000	61,629,000
Maturities and payments	22,038,000	23,306,000
Investment securities held to maturity:
Purchases	(2,401,000)	(603,000)
Maturities	6,646,000	9,818,000
Net increase in loans	(325,009,000)	(184,955,000)
Purchases of premises and equipment	(1,410,000)	(4,875,000)
Purchase of bank-owned life insurance	(20,000,000)	(20,000,000)
Purchases of nonmarketable equity securities	(3,428,000)	(5,311,000)
Sales of nonmarketable equity securities	90,000	1,918,000
Proceeds from sales of other real estate owned	4,423,000	4,886,000
Net cash paid in acquisitions		(20,053,000)
Net cash used in investing activities	(352,256,000)	(177,484,000)
Cash flows from financing activities:
Net increase in deposits	52,384,000	147,953,000
Net increase (decrease) in short-term borrowings	30,751,000	(20,891,000)
Proceeds from FHLB borrowings	850,000,000	47,500,000
Payments made on FHLB borrowings	(652,500,000)	(57,500,000)
Payments made on other borrowings		(14,130,000)
Proceeds from issuance of subordinated debt, net of issuance costs		55,325,000
Payments made on subordinated debt	(8,000,000)
Cash dividends paid on common stock	(7,057,000)	(5,680,000)
Proceeds from issuance of common stock in initial public offering, net of issuance costs	71,475,000
Proceeds from issuance of common stock under employee benefit plans	489,000	350,000
Cash distributions to noncontrolling interests	(129,000)	(345,000)
Net cash provided by financing activities	337,413,000	152,582,000
Net increase (decrease) in cash and cash equivalents	15,555,000	46,761,000
Cash and cash equivalents:
Beginning of year	212,475,000	159,903,000
End of year	228,030,000	206,664,000
Cash payments for:
Interest paid on deposits and borrowed funds	11,078,000	8,218,000
Income tax paid	157,000	10,091,000
Supplemental disclosures of noncash investing and financing activities:
Transfer of loans to other real estate owned	$ 4,245,000	$ 2,908,000

BUSINESS DESCRIPTION	9 Months Ended
BUSINESS DESCRIPTION	Sep. 30, 2016
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION	Note 1 – Business Description Midland States Bancorp, Inc. (“the Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Our 135-year old banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri and Colorado, and provides traditional community banking and other complementary financial services, including lending, residential mortgage origination, wealth management, merchant services and prime consumer lending. We also originate and service government sponsored mortgages for multifamily and healthcare facilities and operate a commercial equipment leasing business on a nationwide basis. Since late 2007, we have grown organically and through a series of nine acquisitions. Most recently, we acquired Love Savings Holding Company (“LSHC”) in December 2014, which greatly expanded our commercial and retail banking services in the St. Louis metropolitan area, added a branch and three mortgage offices in Colorado, and provided us the opportunity to enter complementary lending and leasing business lines. 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; merchant services; and, from time to time, gains on sales of assets. With the acquisition of LSHC, we expanded our income sources to include a greater emphasis on residential mortgage loan origination and servicing, Love Funding Corporation’s (“Love Funding”) commercial Federal Housing Administration (“FHA”) loan origination and servicing, and Heartland Business Credit Corporation’s (“Business Credit”) interest income on indirect financing leases. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for loan losses and income tax expense. Initial Public Offering On May 24, 2016, we completed our initial public offering and received gross proceeds of $67.0 million for the 3,044,252 shares of common stock sold by us in the offering. On June 6, 2016, we received additional gross proceeds of $12.0 million for the 545,813 shares of common stock sold when the underwriters fully exercised their option to purchase additional shares of common stock. After deducting underwriting discounts and offering expenses, we received total net proceeds of $71.5 million from the initial public offering.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2016
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These interim financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto as of and for the years ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016. Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries, giving effect to the noncontrolling interest in subsidiaries, as more fully described below. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements. The Company operates through its wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and subsidiaries: Love Funding, Business Credit, and Heartland Premier LLC (“Premier”). All of the subsidiaries are wholly owned by the Bank as of September 30, 2016, except for Premier, which was formed as a joint venture mortgage origination operation, of which the Bank owns 51% and acts as a manager. Heartland Preferred Mortgage Company LLC (“Preferred”), formerly a subsidiary of the Bank, was a joint venture mortgage origination operation, of which the Bank owned 51% and acted as a manager. Preferred was dissolved on May 27, 2016. Premier and Preferred are included in the consolidated financial statements and the noncontrolling ownership interest is reported as a component of shareholders’ equity in the consolidated balance sheets as “noncontrolling interest in subsidiaries” and the earnings or loss attributable to the noncontrolling ownership interest is reported as “net (loss) income attributable to noncontrolling interest in subsidiaries” in the consolidated statements of income. Use of Estimates In preparing the consolidated financial statements, we are required to make estimates and assumptions, which significantly affect the amounts reported in the consolidated financial statements. Significant estimates that are particularly susceptible to change include the fair value of investment securities, the determination of the allowance for loan losses, estimated fair values of purchased loans, valuation of real estate and other properties acquired in connection with foreclosures or in satisfaction of amounts due from borrowers on loans, and the carrying value of mortgage servicing rights. While management uses its best judgment, actual results may differ from those estimates. Current economic and market conditions significantly affect the judgments. Summary of Significant Accounting Policies The accompanying consolidated financial statements were compiled in accordance with the accounting policies set forth in Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our consolidated financial statements as of and for the periods ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the SEC on May 23, 2016. The accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments that, in the opinion of management, are necessary to reflect a fair statement of our consolidated financial condition, results of operations and cash flows. The results of operations for acquired companies are included from the dates of acquisition. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Impact of New Financial Accounting Standards FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The ASU supersedes revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification (“ASC”). The ASU requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to receive in exchange for those goods or services. The ASU identifies specific steps that entities should apply to achieve this principle. The new guidance was originally effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. The update is effective for the Company for the year ending December 31, 2019, although the Company may elect to adopt guidance earlier. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” – In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. The ASU requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” - In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments are expected to significantly impact net income, earnings per share, and the statement of cash flows. Implementation and administration may present challenges for companies with significant share-based payment activities. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” The amendments clarify the following two aspects of Topic 606: identifying performance obligations, and the licensing implementation guidance. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments in this update are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. Topic 606 includes two criteria for assessing whether promises to transfer goods or services are distinct. One of those criteria is that the promises are separately identifiable. This update will improve the guidance on assessing that criterion. Topic 606 also includes implementation guidance on determining whether as entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The amendments in this update are intended to improve the operability and understandability of the licensing implementation guidance. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better understand their credit loss estimates. For public companies that are SEC filers, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements.

ACQUISITIONS	9 Months Ended
ACQUISITIONS	Sep. 30, 2016
ACQUISITIONS
ACQUISITIONS	Note 3 – Acquisitions On December 31, 2014, the Company completed its acquisition of LSHC. At closing, LSHC primarily consisted of Heartland Bank, its wholly owned subsidiaries Love Funding and Business Credit, and $40.0 million of trust preferred debentures. Heartland Bank provided commercial and retail banking services in the St. Louis metropolitan area, its primary market, through the operation of 10 full-service banking offices, a full-service cyber office, three limited service loan production offices, and a retirement center office in Missouri, and one branch office in Colorado. Love Funding is an approved FHA insured lender and Government National Mortgage Association issuer engaged in commercial mortgage origination and servicing, and Business Credit provides custom leasing and financing programs to equipment and software vendors. The Company acquired LSHC for $67.3 million, which consisted of 2,224,091 shares of common stock, $20.1 million in cash and an accrual in other liabilities of $530,000 for the fair value of additional consideration based on the earnings of Love Funding over a two year period after acquisition date. The additional consideration is defined as the amount, if any, by which 50% of Love Funding’s adjusted net income (for the two year period ending December 31, 2016) exceeds $9.1 million, multiplied by an earn-out multiple. The contingent consideration amount is capped at $12.0 million and any payment will be made through issuance of the Company’s common stock. The acquired identifiable assets included the establishment of a $3.4 million core deposit intangible, which is being amortized on an accelerated basis over 10 years. The Company also recognized $0.5 million for the fair value of noncontrolling interests associated with two mortgage origination joint ventures owned 51% by Heartland Bank. Pending Acquisition at September 30, 2016 On February 23, 2016, the Bank and Sterling National Bank of Yonkers, New York (“Sterling”) entered into a Trust Company Agreement and Plan of Merger (“Merger Agreement”), pursuant to which the Bank will acquire approximately $400.0 million in wealth management assets from Sterling. Under the terms of the Merger Agreement, the Bank will pay Sterling approximately $4.8 million in cash, with an expected closing date in the fourth quarter of 2016. The transaction is subject to regulatory approval and other customary closing conditions.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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+ Details

INVESTMENT SECURITIES AVAILABLE FOR SALE

9 Months Ended

Sep. 30, 2016

INVESTMENT SECURITIES AVAILABLE FOR SALE

INVESTMENT SECURITIES AVAILABLE FOR SALE

Note 4 – Investment Securities Available for Sale

Investment securities classified as available for sale as of September 30, 2016 and December 31, 2015 are as follows (in thousands):


	September 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	35,499	$	13	$	6	$	35,506
Government sponsored entity debt securities		8,788		202		—		8,990
Agency mortgage-backed securities		67,536		1,134		14		68,656
Non-agency mortgage-backed securities		1		—		—		1
Covered non-agency mortgage-backed securities (1)		58,376		14,386		669		72,093
State and municipal securities		21,724		271		15		21,980
Corporate securities		44,853		526		393		44,986
Total	$	236,777	$	16,532	$	1,097	$	252,212

(1)

All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the Federal Deposit Insurance Corporation (the “FDIC”) in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC.


	December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	48,483	$	1	$	182	$	48,302
Government sponsored entity debt securities		9,404		58		8		9,454
Agency mortgage-backed securities		66,902		835		210		67,527
Non-agency mortgage-backed securities		2		—		—		2
Covered non-agency mortgage-backed securities (1)		66,397		10,886		1,304		75,979
State and municipal securities		15,441		77		24		15,494
Corporate securities		20,036		28		195		19,869
Total	$	226,665	$	11,885	$	1,923	$	236,627

(1)

All covered non‑agency mortgage‑backed securities were covered under the loss‑sharing agreement we entered into with the FDIC in connection with a 2009 acquisition. This agreement had a seven year term that expired on July 1, 2016 with respect to losses. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements. None of our other investment securities were covered under a loss‑sharing agreement with the FDIC.

Market valuations for our investment securities classified as available for sale are provided by independent third parties. The fair values are determined using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. The market valuation sources include observable market inputs for the majority of our securities and are therefore considered Level 2 inputs for the purpose of determining fair values. The fair values for U.S. Treasury securities are determined using quoted market prices and are considered Level 1.

Unrealized losses and fair values for investment securities available for sale as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands):


	September 30, 2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	17,994	$	6	$	—	$	—	$	17,994	$	6
Government sponsored entity debt securities		—		—		—		—		—		—
Agency mortgage-backed securities		5,066		14		—		—		5,066		14
Covered non-agency mortgage-backed securities		429		27		4,895		642		5,324		669
State and municipal securities		3,417		15		—		—		3,417		15
Corporate securities		10,896		386		2,984		7		13,880		393
Total	$	37,802	$	448	$	7,879	$	649	$	45,681	$	1,097


	December 31, 2015
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	42,301	$	182	$	—	$	—	$	42,301	$	182
Government sponsored entity debt securities		4,229		8		—		—		4,229		8
Agency mortgage-backed securities		19,404		167		1,932		43		21,336		210
Covered non-agency mortgage-backed securities		14,149		1,114		1,431		190		15,580		1,304
State and municipal securities		4,959		20		812		4		5,771		24
Corporate securities		11,245		172		813		23		12,058		195
Total	$	96,287	$	1,663	$	4,988	$	260	$	101,275	$	1,923

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

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

At September 30, 2016 and December 31, 2015, 30 and 54 available-for-sale securities, respectively, had unrealized losses with aggregate depreciation of 2.35% and 1.86%, respectively, from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. As we have the intent and ability to hold debt securities for a period of time sufficient for a recovery in value, no declines are deemed to be other-than-temporary.

During the three months ended September 30, 2016, there was no OTTI recognized. During the nine months ended September 30, 2016, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $824,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income.

During the three months ended September 30, 2015, the Company determined that two covered non-agency mortgage-backed securities had OTTI of $299,000, primarily resulting from changes in expected cash flows. During the nine months ended September 30, 2015, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $461,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income.

The following is a summary of the amortized cost and fair value of available-for-sale investment securities, by maturity, at September 30, 2016 (in thousands). The maturities of agency, non-agency and covered non-agency mortgage-backed securities are based on expected maturities. Expected maturities may differ from contractual maturities in mortgage‑backed securities because the mortgages underlying the securities may be prepaid without any penalties. The maturities of all other available-for-sale investment securities are based on final contractual maturity.


	Amortized		Fair
	cost		value
Within one year	$	46,521	$	46,450
After one year through five years		109,963		120,369
After five years through ten years		64,747		68,130
After ten years		15,546		17,263
Total	$	236,777	$	252,212

Gross realized gains from the sale of securities available for sale were $39,000 and $315,000 for the three and nine months ended September 30, 2016, respectively. There were no gross realized losses for the three or nine months ended September 30, 2016.

Gross realized gains from the sale of securities available for sale were $1,000 and $335,000 for the three and nine months ended September 30, 2015, respectively. Gross realized losses were $175,000 for the nine months ended September 30, 2015. There were no gross realized losses for the three months ended September 30, 2015.

INVESTMENT SECURITIES HELD TO MATURITY

9 Months Ended

Sep. 30, 2016

INVESTMENT SECURITIES HELD TO MATURITY

INVESTMENT SECURITIES HELD TO MATURITY

Note 5 – Investment Securities Held to Maturity

Investment securities classified as held to maturity as of September 30, 2016 and December 31, 2015 are as follows (in thousands):


	September 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	82,941	$	5,724	$	75	$	88,590


	December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	87,521	$	5,364	$	69	$	92,816

Market valuations for our investment securities held to maturity are provided by independent third parties. The fair values are determined using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. The market valuation sources provide the significant observable market inputs for these securities and are therefore considered Level 2 inputs for the purpose of determining fair values.

Unrealized losses and fair value for investment securities held to maturity as of September 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands):


	September 30, 2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
State and municipal securities	$	605	$	2	$	3,306	$	73	$	3,911	$	75


	December 31, 2015
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
State and municipal securities	$	3,573	$	24	$	2,743	$	45	$	6,316	$	69

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

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

At September 30, 2016 and December 31, 2015, 17 and 25 held-to-maturity securities, respectively, had unrealized losses with aggregate depreciation of 1.88% and 1.08%, respectively, from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider who issued the securities and whether downgrades by bond rating agencies have occurred. As we have the intent and ability to hold debt securities for the foreseeable future, no declines are deemed to be other-than-temporary.

The amortized cost and fair value of held-to-maturity securities as of September 30, 2016, by contractual maturity, are as follows (in thousands):


	Amortized		Fair
	cost		value
Within one year	$	1,734	$	1,738
After one year through five years		17,166		17,834
After five years through ten years		43,234		47,114
After ten years		20,807		21,904
Total	$	82,941	$	88,590

LOANS

9 Months Ended

Sep. 30, 2016

LOANS

LOANS

Note 6 – Loans

The following table presents total loans outstanding by portfolio, which includes Purchased Credit-Impaired (“PCI”) loans, as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Loans:
Commercial	$	545,069	$	499,573
Commercial real estate		956,298		876,784
Construction and land development		163,900		150,266
Total commercial loans		1,665,267		1,526,623
Residential real estate		216,935		163,224
Consumer		248,131		161,512
Lease financing		182,445		144,230
Total loans	$	2,312,778	$	1,995,589

Total loans include net deferred loan fees of $3.5 million and $5.8 million at September 30, 2016 and December 31, 2015, respectively, and unearned discounts of $19.7 million and $15.7 million within the lease financing portfolio at September 30, 2016 and December 31, 2015, respectively.

At September 30, 2016 and December 31, 2015, the Company had commercial and residential loans held for sale totaling $61.4 million and $54.4 million, respectively. During the three and nine months ended September 30, 2016, the Company sold commercial and residential real estate loans with proceeds totaling $450.9 million and $907.3 million, respectively, and sold commercial and residential real estate loans with proceeds totaling $299.7 million and $836.1 million for the comparable periods in 2015, respectively.

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

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

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

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

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

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

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

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

We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon normal terms, including collateralization and interest rates prevailing at the time, and did not involve more than the normal risk of repayment by the borrower. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates totaled $21.5 million and $39.2 million at September 30, 2016 and December 31, 2015, respectively. During the three and nine months ended September 30, 2016, there were $468,000 and $10.6 million, respectively, of new loans and other additions, while repayments and other reductions totaled $2.2 million and $28.5 million, respectively.

Credit Quality Monitoring

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

The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities.

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

Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

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

Credit Quality Indicators

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

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

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of September 30, 2016 (in thousands):


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	518,512	$	910,187	$	147,490	$	1,576,189
Special mention		5,293		9,411		—		14,704
Substandard		11,516		21,072		450		33,038
Substandard – nonaccrual		5,520		6,551		—		12,071
Doubtful		—		—		—		—
Not graded		611		1,610		4,483		6,704
Total (excluding PCI)	$	541,452	$	948,831	$	152,423	$	1,642,706

The Company evaluates the credit quality of its other loans based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be impaired for purposes of credit quality evaluation. The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of September 30, 2016 (in thousands):


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	205,901	$	247,634	$	181,718	$	635,253
Impaired		4,466		202		727		5,395
Total (excluding PCI)	$	210,367	$	247,836	$	182,445	$	640,648

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2015 (in thousands):


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	467,355	$	821,314	$	136,288	$	1,424,957
Special mention		16,589		23,737		540		40,866
Substandard		3,448		8,103		—		11,551
Substandard-nonaccrual		5,702		8,844		—		14,546
Doubtful		—		—		—		—
Not graded		351		746		3,379		4,476
Total (excluding PCI)	$	493,445	$	862,744	$	140,207	$	1,496,396

The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of December 31, 2015 (in thousands):


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	151,111	$	161,169	$	143,832	$	456,112
Impaired		4,155		51		398		4,604
Total (excluding PCI)	$	155,266	$	161,220	$	144,230	$	460,716

Impaired Loans

Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest and loans modified under troubled debt restructurings. Impaired loans at September 30, 2016 and December 31, 2015 do not include $29.4 million and $38.5 million, respectively, of PCI loans. The risk of credit loss on acquired loans was recognized as part of the fair value adjustment at the acquisition date.

A summary of impaired loans (excluding PCI loans) as of September 30, 2016 and December 31, 2015 is as follows (in thousands):


	September 30,		December 31,
	2016		2015
Nonaccrual loans:
Commercial	$	5,520	$	5,702
Commercial real estate		6,551		8,844
Construction and land development		—		—
Residential real estate		4,063		3,516
Consumer		97		2
Lease financing		727		398
Total nonaccrual loans		16,958		18,462
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		351		865
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		—		228
Consumer		105		49
Lease financing		—		—
Total accruing loans contractually past due 90 days or more as to interest or principal payments		456		1,142
Loans modified under troubled debt restructurings:
Commercial		648		3
Commercial real estate		11,397		4,873
Construction and land development		64		—
Residential real estate		403		411
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings		12,512		5,287
Total impaired loans (excluding PCI)	$	29,926	$	24,891

There was no interest income recognized on nonaccrual loans during the three and nine months ended September 30, 2016 and 2015 while the loans were in nonaccrual status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $243,000 and $484,000 for the three and nine months ended September 30, 2016, respectively, and $172,000 and $741,000 for the comparable periods in 2015, respectively. The Company recognized interest income on loans modified under troubled debt restructurings‑commercial and commercial real estate of $90,000 and $196,000 for the three and nine months ended September 30, 2016, respectively, and $104,000 and $316,000 for the comparable periods in 2015, respectively.

The following table presents impaired loans (excluding PCI loans) by portfolio which are individually evaluated as of September 30, 2016 and December 31, 2015, respectively (in thousands):


	September 30, 2016						December 31, 2015
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	6,119	$	9,448	$	1,962	$	5,789	$	8,760	$	1,797
Commercial real estate		2,067		2,256		145		9,197		9,489		514
Construction and land development		64		64		6		—		26		—
Residential real estate		3,137		3,750		567		3,206		3,798		626
Consumer		202		113		37		51		52		7
Lease financing		727		727		69		398		398		50
Total impaired loans with a valuation allowance		12,316		16,358		2,786		18,641		22,523		2,994
Impaired loans with no related valuation allowance:
Commercial		400		445		—		781		781		—
Commercial real estate		15,881		16,107		—		4,520		5,840		—
Construction and land development		—		—		—		—		—		—
Residential real estate		1,329		1,493		—		949		989		—
Consumer		—		91		—		—		—		—
Lease financing		—		—		—		—		—		—
Total impaired loans with no related valuation allowance		17,610		18,136		—		6,250		7,610		—
Total impaired loans:
Commercial		6,519		9,893		1,962		6,570		9,541		1,797
Commercial real estate		17,948		18,363		145		13,717		15,329		514
Construction and land development		64		64		6		—		26		—
Residential real estate		4,466		5,243		567		4,155		4,787		626
Consumer		202		204		37		51		52		7
Lease financing		727		727		69		398		398		50
Total impaired loans (excluding PCI)	$	29,926	$	34,494	$	2,786	$	24,891	$	30,133	$	2,994

The difference between a loan’s recorded investment and the unpaid principal balance represents: (1) a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan’s principal balance and management’s assessment that the full collection of the loan balance is not likely and/or (2) payments received on nonaccrual loans that are fully applied to principal on the loan’s recorded investment as compared to being applied to principal and interest on the unpaid customer principal and interest balance. The difference between the recorded investment and the unpaid principal balance was $4.6 million and $5.2 million at September 30, 2016 and December 31, 2015, respectively.

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the three months ended September 30, 2016 and 2015 are included in the table below (in thousands):


	Three Months Ended September 30,
	2016				2015
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	6,426	$	23	$	10,972	$	3
Commercial real estate		2,170		65		9,475		101
Construction and land development		65		3		9		—
Residential real estate		3,157		13		2,114		12
Consumer		115		—		35		—
Lease financing		727		—		649		—
Total impaired loans with a valuation allowance		12,660		104		23,254		116
Impaired loans with no related valuation allowance:
Commercial		439		2		383		—
Commercial real estate		15,610		—		4,632		—
Construction and land development		—		—		—		—
Residential real estate		1,341		1		1,364		3
Consumer		91		—		11		—
Lease financing		—		—		—		—
Total impaired loans with no related valuation allowance		17,481		3		6,390		3
Total impaired loans:
Commercial		6,865		25		11,355		3
Commercial real estate		17,780		65		14,107		101
Construction and land development		65		3		9		—
Residential real estate		4,498		14		3,478		15
Consumer		206		—		46		—
Lease financing		727		—		649		—
Total impaired loans (excluding PCI)	$	30,141	$	107	$	29,644	$	119

The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the nine months ended September 30, 2016 and 2015 are included in the table below (in thousands):


	Nine Months Ended September 30,
	2016				2015
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,115	$	24	$	12,435	$	6
Commercial real estate		2,273		115		9,897		234
Construction and land development		66		6		35		—
Residential real estate		3,234		24		2,163		25
Consumer		118		—		35		—
Lease financing		727		—		649		—
Total impaired loans with a valuation allowance		14,533		169		25,214		265
Impaired loans with no related valuation allowance:
Commercial		313		1		663		—
Commercial real estate		15,742		56		4,970		76
Construction and land development		—		—		18		—
Residential real estate		1,364		3		1,641		6
Consumer		91		—		42		8
Lease financing		—		—		—		—
Total impaired loans with no related valuation allowance		17,510		60		7,334		90
Total impaired loans:
Commercial		8,428		25		13,098		6
Commercial real estate		18,015		171		14,867		310
Construction and land development		66		6		53		—
Residential real estate		4,598		27		3,804		31
Consumer		209		—		77		8
Lease financing		727		—		649		—
Total impaired loans (excluding PCI)	$	32,043	$	229	$	32,548	$	355

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of September 30, 2016 (in thousands):


					Accruing
					Loans
	31-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	2,974	$	2,979	$	351	$	5,520	$	11,824	$	529,628	$	541,452
Commercial real estate		768		503		—		6,551		7,822		941,009		948,831
Construction and land development		—		22		—		—		22		152,401		152,423
Residential real estate		782		902		—		4,063		5,747		204,620		210,367
Consumer		952		414		105		97		1,568		246,268		247,836
Lease financing		22		—		—		727		749		181,696		182,445
Total (excluding PCI)	$	5,498	$	4,820	$	456	$	16,958	$	27,732	$	2,255,622	$	2,283,354

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2015 (in thousands):


					Accruing
					Loans
	31-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	1,911	$	2,296	$	865	$	5,702	$	10,774	$	482,671	$	493,445
Commercial real estate		288		1,989		—		8,844		11,121		851,623		862,744
Construction and land development		340		—		—		—		340		139,867		140,207
Residential real estate		1,983		438		228		3,516		6,165		149,101		155,266
Consumer		565		273		49		2		889		160,331		161,220
Lease financing		37		—		—		398		435		143,795		144,230
Total (excluding PCI)	$	5,124	$	4,996	$	1,142	$	18,462	$	29,724	$	1,927,388	$	1,957,112

Troubled Debt Restructurings

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

Loans modified as TDRs for commercial and commercial real estate loans generally consist of allowing commercial borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans’ contractual terms. TDRs that continue to accrue interest and are greater than $50,000 are individually evaluated for impairment, on a quarterly basis, and transferred to nonaccrual status when it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the contractual terms of the loan. TDRs that subsequently default are individually evaluated for impairment at the time of default. The allowance for loan losses on TDRs totaled $191,000 and $109,000 as of September 30, 2016 and December 31, 2015, respectively. The Company had $164,000 of unfunded commitments in connection with TDRs at September 30, 2016. The Company had no unfunded commitments in connection with TDRs at December 31, 2015.

The Company’s TDRs are identified on a case-by-case basis in connection with the ongoing loan collection processes. The following table presents TDRs by loan portfolio (excluding PCI loans) as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30, 2016						December 31, 2015
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	648	$	34	$	682	$	3	$	40	$	43
Commercial real estate		11,397		5,102		16,499		4,873		5,332		10,205
Construction and land development		64		—		64		—		—		—
Residential real estate		403		335		738		411		383		794
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	12,512	$	5,471	$	17,983	$	5,287	$	5,755	$	11,042

(1)

These loans are still accruing interest.

(2)

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

The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2016 (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended September 30, 2016:
Troubled debt restructurings:
Number of loans		—		2		—		—		—		—		2
Pre-modification outstanding balance	$	—	$	10,207	$	—	$	—	$	—	$	—	$	10,207
Post-modification outstanding balance		—		10,207		—		—		—		—		10,207

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

For the nine months ended September 30, 2016:
Troubled debt restructurings:
Number of loans		3		2		—		—		—		—		5
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	—	$	—	$	—	$	10,892
Post-modification outstanding balance		647		10,207		—		—		—		—		10,854

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

The following table presents a summary of loans by portfolio that were restructured during the three and nine months ended September 30, 2015 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2015 (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended September 30, 2015:
Troubled debt restructurings:
Number of loans		1		—		—		—		—		—		1
Pre-modification outstanding balance	$	42	$	—	$	—	$	—	$	—	$	—	$	42
Post-modification outstanding balance		42		—		—		—		—		—		42

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

For the nine months ended September 30, 2015:
Troubled debt restructurings:
Number of loans		1		—		—		—		—		—		1
Pre-modification outstanding balance	$	42	$	—	$	—	$	—	$	—	$	—	$	42
Post-modification outstanding balance		42		—		—		—		—		—		42

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	71	$	—	$	—	$	—	$	—	$	71

Allowance for Loan Losses

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

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

Commercial Real Estate – As with commercial loans, repayment of commercial real estate loans is often dependent on the borrowers’ 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, given the present state of the residential real estate market, the value of the underlying property may have deteriorated, perhaps rapidly, and the borrower may have little incentive to repay the loan or continue living in the property. Additionally, in areas with high vacancy rates, reselling the property without substantial loss may be difficult.

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

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

Changes in the allowance for loan losses for the three months ended September 30, 2016 and 2015 are as follows (in thousands):


	Three Months Ended September 30,
	2016						2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	13,629	$	1,123	$	14,752	$	14,464	$	1,742	$	16,206
Provision for loan losses		1,156		236		1,392		6,681		18		6,699
Loan charge-offs		(806)		(58)		(864)		(7,930)		(19)		(7,949)
Loan recoveries		250		29		279		172		29		201
Net loan charge-offs		(556)		(29)		(585)		(7,758)		10		(7,748)
Balance at end of period	$	14,229	$	1,330	$	15,559	$	13,387	$	1,770	$	15,157

Changes in the allowance for loan losses for the nine months ended September 30, 2016 and 2015 are as follows (in thousands):


	Nine Months Ended September 30,
	2016						2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	14,093	$	1,895	$	15,988	$	10,504	$	1,796	$	12,300
Provision for loan losses		3,752		(606)		3,146		10,163		(88)		10,075
Loan charge-offs		(4,228)		(58)		(4,286)		(8,914)		(31)		(8,945)
Loan recoveries		612		99		711		1,634		93		1,727
Net loan charge-offs		(3,616)		41		(3,575)		(7,280)		62		(7,218)
Balance at end of period	$	14,229	$	1,330	$	15,559	$	13,387	$	1,770	$	15,157

During the three and nine months ended September 30, 2016, the Company recorded $806,000 and $4.2 million, respectively, of non-PCI loan charge-offs. The nine month period amounts included a $1.6 million charge-off on a nonperforming commercial loan to one borrower and a $530,000 charge-off on nonperforming commercial loans related to a single credit relationship as a result of the deterioration in the borrower’s collateral position on the respective loans during the first quarter of 2016.

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses for the three months ended September 30, 2016:
Beginning balance	$	6,186	$	3,511	$	569	$	2,584	$	827	$	1,075	$	14,752
Provision for loan losses		1,216		(12)		(271)		220		326		(87)		1,392
Charge-offs		(251)		(214)		(1)		(153)		(91)		(154)		(864)
Recoveries		36		129		13		32		20		49		279
Ending balance	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559

Changes in allowance for loan losses for the three months ended September 30, 2015:
Beginning balance	$	5,488	$	7,657	$	435	$	1,883	$	611	$	132	$	16,206
Provision for loan losses		7,294		(2,097)		48		799		282		373		6,699
Charge-offs		(7,486)		(12)		(23)		(318)		(110)		—		(7,949)
Recoveries		56		57		8		52		25		3		201
Ending balance	$	5,352	$	5,605	$	468	$	2,416	$	808	$	508	$	15,157

Changes in allowance for loan losses for the nine months ended September 30, 2016:
Beginning balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Provision for loan losses		2,619		(1,520)		(154)		886		479		836		3,146
Charge-offs		(2,513)		(461)		(1)		(454)		(225)		(632)		(4,286)
Recoveries		164		216		30		131		79		91		711
Ending balance	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559

Changes in allowance for loan losses for the nine months ended September 30, 2015:
Beginning balance	$	2,284	$	6,925	$	486	$	2,038	$	567	$	—	$	12,300
Provision for loan losses		9,514		(1,316)		(4)		922		386		573		10,075
Charge-offs		(7,587)		(307)		(39)		(665)		(237)		(110)		(8,945)
Recoveries		1,141		303		25		121		92		45		1,727
Ending balance	$	5,352	$	5,605	$	468	$	2,416	$	808	$	508	$	15,157

The following table represents, by loan portfolio, details regarding the balance in the allowance for loan losses and the recorded investment in loans as of September 30, 2016 and December 31, 2015 by impairment evaluation method (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
September 30, 2016:

Allowance for loan losses:
Loans individually evaluated for impairment	$	1,950	$	118	$	6	$	359	$	14	$	5	$	2,452
Loans collectively evaluated for impairment		12		27		—		207		23		65		334
Non-impaired loans collectively evaluated for impairment		4,569		3,041		304		1,694		1,022		813		11,443
Loans acquired with deteriorated credit quality (1)		656		228		—		423		23		—		1,330
Total allowance for loan losses	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	6,423	$	17,728	$	64	$	2,752	$	14	$	198	$	27,179
Impaired loans collectively evaluated for impairment		96		220		—		1,714		188		529		2,747
Non-impaired loans collectively evaluated for impairment		534,933		930,883		152,359		205,901		247,634		181,718		2,253,428
Loans acquired with deteriorated credit quality (1)		3,617		7,467		11,477		6,568		295		—		29,424
Total recorded investment (loan balance)	$	545,069	$	956,298	$	163,900	$	216,935	$	248,131	$	182,445	$	2,312,778


December 31, 2015:

Allowance for loan losses:
Loans individually evaluated for impairment	$	1,765	$	479	$	—	$	452	$	—	$	—	$	2,696
Loans collectively evaluated for impairment		32		35		—		174		7		50		298
Non-impaired loans collectively evaluated for impairment		4,745		3,662		419		1,000		735		538		11,099
Loans acquired with deteriorated credit quality (1)		375		1,003		16		494		7		—		1,895
Total allowance for loan losses	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	6,316	$	13,434	$	—	$	2,778	$	—	$	—	$	22,528
Impaired loans collectively evaluated for impairment		254		283		—		1,377		51		398		2,363
Non-impaired loans collectively evaluated for impairment		486,875		849,027		140,207		151,111		161,169		143,832		1,932,221
Loans acquired with deteriorated credit quality (1)		6,128		14,040		10,059		7,958		292		—		38,477
Total recorded investment (loan balance)	$	499,573	$	876,784	$	150,266	$	163,224	$	161,512	$	144,230	$	1,995,589

(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.

Purchased Credit Impaired Loans

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

Changes in the accretable yield for PCI loans were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Balance at beginning of period	$	6,729	$	14,237	$	10,526	$	16,198
Accretion		(1,810)		(1,006)		(7,066)		(3,013)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		179		—		(96)		67
Reclassification from non-accretable		2,568		325		4,302		304
Balance at end of period	$	7,666	$	13,556	$	7,666	$	13,556

The fair value of PCI loans, on the acquisition date, was determined based on assigned risk ratings, expected cash flows and the fair value of loan collateral.

The carrying amount of covered loans and non-covered loans as of September 30, 2016 and December 31, 2015 consisted of PCI loans and non-PCI loans as shown in the following table (in thousands):


	September 30, 2016						December 31, 2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Covered loans: (1)
Commercial	$	—	$	—	$	—	$	378	$	1,067	$	1,445
Commercial real estate		—		—		—		876		318		1,194
Construction and land development		—		—		—		—		—		—
Residential real estate		688		98		786		715		275		990
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total covered loans		688		98		786		1,969		1,660		3,629

Non-covered loans:
Commercial		541,452		3,617		545,069		493,067		5,061		498,128
Commercial real estate		948,831		7,467		956,298		861,868		13,722		875,590
Construction and land development		152,423		11,477		163,900		140,207		10,059		150,266
Residential real estate		209,679		6,470		216,149		154,551		7,683		162,234
Consumer		247,836		295		248,131		161,220		292		161,512
Lease financing		182,445		—		182,445		144,230		—		144,230
Total non-covered loans		2,282,666		29,326		2,311,992		1,955,143		36,817		1,991,960
Total loans	$	2,283,354	$	29,424	$	2,312,778	$	1,957,112	$	38,477	$	1,995,589

(1)

Covered loans include loans from our 2010 acquisition. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements as more fully described in Note 21 to the Consolidated Financial Statements.

The outstanding customer balance for PCI loans totaled $37.1 million and $44.5 million as of September 30, 2016 and December 31, 2015, respectively.

MORTGAGE SERVICING RIGHTS

9 Months Ended

Sep. 30, 2016

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

Note 7 – Mortgage Servicing Rights

At September 30, 2016 and December 31, 2015, the Company serviced mortgage loans for others totaling $5.63 billion and $5.48 billion, respectively. A summary of mortgage loans serviced for others as of September 30, 2016 and December 31, 2015 is as follows (in thousands):


	September 30,		December 31,
	2016		2015
Commercial FHA mortgage loans	$	3,806,872	$	3,649,524
Residential mortgage loans		1,821,151		1,826,280
Total loans serviced for others	$	5,628,023	$	5,475,804

Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Mortgage servicing rights:
Balance at beginning of period	$	68,395	$	64,921	$	67,218	$	62,900
Servicing rights capitalized – commercial FHA mortgage loans		3,506		1,411		5,777		2,866
Servicing rights capitalized – residential mortgage loans		1,125		1,105		2,764		4,185
Amortization – commercial FHA mortgage loans		(592)		(552)		(1,741)		(1,708)
Amortization – residential mortgage loans		(1,085)		(673)		(2,669)		(2,031)
Balance at end of period		71,349		66,212		71,349		66,212
Valuation allowances:
Balance at beginning of period		5,587		—		567		119
Additions		1,073		795		6,301		1,630
Reductions		—		—		(208)		(954)
Balance at end of period		6,660		795		6,660		795
Mortgage servicing rights, net	$	64,689	$	65,417	$	64,689	$	65,417
Fair value:
At beginning of period	$	62,960	$	66,442	$	66,700	$	62,781
At end of period	$	64,689	$	66,074	$	64,689	$	66,074

The following table is a summary of key assumptions, representing both general economic and other published information and the weighted average characteristics of the commercial and residential portfolios, used in the valuation of servicing rights at September 30, 2016 and December 31, 2015. Assumptions used in the prepayment rate consider many factors as appropriate, including lockouts, balloons, prepayment penalties, interest rate ranges, delinquencies and geographic location. The discount rate is based on an average pre‑tax internal rate of return utilized by market participants in pricing the servicing portfolios. Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement.


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
September 30, 2016:
Commercial FHA mortgage loans	0.13	%	3.75	%	30.3	8.33	%	$	1,000	10 - 13	%
Residential mortgage loans	0.27	%	3.93	%	24.2	18.42	%	$	73.46	9 - 11	%

December 31, 2015:
Commercial FHA mortgage loans	0.12	%	3.85	%	30.6	8.53	%	$	1,000	10 - 13	%
Residential mortgage loans	0.27	%	3.96	%	24.4	11.22	%	$	73.66	9 - 11	%

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

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2016

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Note 8 – Intangible Assets

The Company’s intangible assets, consisting of core deposit and trust relationship intangibles, as of September 30, 2016 and December 31, 2015 are summarized as follows (in thousands):


	September 30, 2016						December 31, 2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	20,542	$	(15,770)	$	4,772	$	20,542	$	(14,471)	$	6,071
Customer relationship intangibles		3,141		(2,522)		619		3,141		(2,208)		933
Total intangible assets	$	23,683	$	(18,292)	$	5,391	$	23,683	$	(16,679)	$	7,004

Amortization of intangible assets was $514,000 and $1.6 million for the three and nine months ended September 30, 2016, respectively, and $597,000 and $1.9 million for the comparable periods in 2015, respectively.

- Definition

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

+ References + Details

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2016

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Note 9 – Derivative Instruments

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

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

Derivative instruments issued by the Company consist of interest rate lock commitments to originate fixed-rate loans to be sold. Commitments to originate fixed-rate loans consist of commercial and residential real estate loans. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets 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, estimated fair values and the location in which the derivative instruments are reported in the consolidated balances sheets at September 30, 2016 and December 31, 2015 (in thousands):


	Notional Amount				Fair Value Gain
	September 30,		December 31,		September 30,		December 31,
	2016		2015		2016		2015
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	294,010	$	257,023	$	6,798	$	6,029


	Notional Amount				Fair Value Loss
	September 30,		December 31,		September 30,		December 31,
	2016		2015		2016		2015
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	323,103	$	278,313	$	244	$	2

Net losses recognized on derivative instruments were $5.2 million for the three months ended September 30, 2016 and net gains recognized on derivative instruments were $527,000 for the nine months ended September 30, 2016. Net gains of $272,000 and $6.3 million were recognized on derivative instruments for the three and nine months ended September 30, 2015, respectively. Net gains and losses on derivative instruments were recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.

Interest Rate Swap Agreements

In August 2011, the Company entered into an interest rate swap agreement to convert its variable rate trust preferred debentures to a fixed rate. The agreement commenced on August 15, 2012 at a notional amount of $10.0 million and matured on October 15, 2016. Under the agreement, the Company received interest at a variable rate equal to 2.75% over the three-month LIBOR and paid interest at a fixed rate of 4.66%. As of September 30, 2016 and December 31, 2015, the fair value of the agreement reflected losses of $32,000 and $126,000, respectively, which were included in other liabilities in the consolidated balance sheets.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-SubTopic 10
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Topic 815
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579245-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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+ Details

DEPOSITS

9 Months Ended

Sep. 30, 2016

Deposits [Abstract]

DEPOSITS

Note 10 – Deposits

The following table summarizes the classification of deposits as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Noninterest-bearing demand	$	629,113	$	543,401
Interest-bearing:
NOW		658,021		621,925
Money market		366,193		377,654
Savings		162,742		155,778
Time		603,963		668,890
Total deposits	$	2,420,032	$	2,367,648

SHORT-TERM BORROWINGS

9 Months Ended

Sep. 30, 2016

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

Note 11 – Short-Term Borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates as of and for the nine months ended September 30, 2016 and as of and for the year ended December 31, 2015 (in thousands):


	Repurchase Agreements
	September 30,			December 31,
	2016			2015
Outstanding at period-end	$	138,289		$	107,538
Average amount outstanding		123,191			123,447
Maximum amount outstanding at any month end		138,289			147,542
Weighted average interest rate:
During period		0.24	%		0.19	%
End of period		0.23	%		0.21	%

At September 30, 2016, the Bank had federal funds lines of credit totaling $68.0 million. These lines of credit were unused at September 30, 2016.

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 $145.7 million and $113.4 million at September 30, 2016 and December 31, 2015, respectively, were pledged for securities sold under agreements to repurchase.

The Bank had lines of credit of $39.6 million and $62.1 million at September 30, 2016 and December 31, 2015, 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 $47.6 million and $76.7 million at September 30, 2016 and December 31, 2015, respectively. There were no outstanding advances at September 30, 2016 and December 31, 2015.

FHLB ADVANCES AND OTHER BORROWINGS

9 Months Ended

Sep. 30, 2016

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

Note 12 – FHLB Advances and Other Borrowings

The following table summarizes our Federal Home Loan Bank (“FHLB”) advances and other borrowings as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
FHLB advances – fixed rate, fixed term, at rates averaging 0.66% and 0.93%, respectively, at September 30, 2016 and December 31, 2015 – maturing through May 2023	$	237,500	$	40,000
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018		43		178
Total FHLB advances and other borrowings	$	237,543	$	40,178

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 loans totaling approximately $1.15 billion and $987.4 million at September 30, 2016 and December 31, 2015, respectively.

SUBORDINATED DEBT

9 Months Ended

Sep. 30, 2016

SUBORDINATED DEBT

SUBORDINATED DEBT

Note 13 – Subordinated Debt

The following table summarizes the Company’s subordinated debt as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Subordinated debt issued June 2013 – fixed interest rate of 8.25%, $8,000 maturing June 28, 2021	$	—	$	7,448
Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025		39,712		39,659
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,772		14,752
Total subordinated debt	$	54,484	$	61,859

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

On January 2, 2013, a third party committed to invest a total of $10.0 million in the Company in the form of $8.0 million of subordinated notes and $2.0 million of common stock. On March 26, 2013, we issued 125,000 shares of common stock pursuant to the terms of the commitment. In addition, 8.25% subordinated notes totaling $8.0 million were issued on June 28, 2013 with a maturity date of June 28, 2021. An 8-year detachable warrant for the purchase of 125,000 shares at $16.00 per share of common stock of the Company was issued concurrently with the funding of the notes. The detachable warrants became exercisable one year after issuance. The detachable warrants were valued at $0.6 million and recorded on a relative value basis separately in shareholders’ equity. Correspondingly, the value of the subordinated notes was reduced by $0.6 million with the recording of a discount that the Company was amortizing using the interest method over the life of the subordinated notes. On June 28, 2016, the Company repaid the $8.0 million subordinated debt issued in June 2013 and recognized the remaining discount of $0.5 million in other noninterest expense in the consolidated statements of income.

The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

TRUST PREFERRED DEBENTURES

9 Months Ended

Sep. 30, 2016

TRUST PREFERRED DEBENTURES.

TRUST PREFERRED DEBENTURES

Note 14 – Trust Preferred Debentures

The following table summarizes the Company’s trust preferred debentures as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.61% and 3.17%, at September 30, 2016 and December 31, 2015, respectively – $3,000 maturing January 23, 2034	$	1,980	$	1,932
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.46% and 3.07% at September 30, 2016 and December 31, 2015, respectively – $10,000 maturing April 23, 2034		9,956		9,954
LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.60% and 2.26% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing December 31, 2036		13,105		13,001
LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.31% and 1.92% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing September 6, 2037		12,275		12,170
Total trust preferred debentures	$	37,316	$	37,057

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2016

EARNINGS PER SHARE

EARNINGS PER SHARE

Note 15 – Earnings Per Share

Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards using the treasury stock method (outstanding stock options and unvested restricted stock), convertible preferred stock and convertible subordinated debt. Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except for share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	8,051	$	3,445	$	19,959	$	16,629
Common shareholder dividends		(2,773)		(1,881)		(7,022)		(5,643)
Unvested restricted stock award dividends		(12)		(12)		(35)		(37)
Undistributed earnings to unvested restricted stock awards		(26)		(10)		(69)		(71)
Undistributed earnings to common shareholders	$	5,240	$	1,542	$	12,833	$	10,878
Basic
Distributed earnings to common shareholders	$	2,773	$	1,881	$	7,022	$	5,643
Undistributed earnings to common shareholders		5,240		1,542		12,833		10,878
Total common shareholders earnings, basic	$	8,013	$	3,423	$	19,855	$	16,521
Diluted
Distributed earnings to common shareholders	$	2,773	$	1,881	$	7,022	$	5,643
Undistributed earnings to common shareholders		5,240		1,542		12,833		10,878
Total common shareholders earnings		8,013		3,423		19,855		16,521
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		—		—		1		1
Total common shareholders earnings, diluted	$	8,013	$	3,423	$	19,856	$	16,522
Weighted average common shares outstanding, basic		15,578,703		11,911,414		13,637,997		11,895,337
Options and warrants		279,570		219,115		264,667		216,358
Weighted average common shares outstanding, diluted		15,858,273		12,130,529		13,902,664		12,111,695
Basic earnings per common share	$	0.51	$	0.29	$	1.46	$	1.39
Diluted earnings per common share		0.51		0.28		1.43		1.36

CAPITAL REQUIREMENTS

9 Months Ended

Sep. 30, 2016

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

Note 16 – Capital Requirements

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

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

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

In July 2013, the federal bank regulators approved final rules implementing the Basel Committee on Banking Supervision’s capital adequacy guidelines (the “Basel III Rules”), as well as certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which were effective January 1, 2015. Under the Basel III Rules, minimum requirements increased for both the quantity and quality of capital held by the Company. The rules included a new common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0%, require a minimum ratio of Total capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. The Basel III Rules also established a new capital conservation buffer, comprised of common equity Tier 1 capital, which is 0.625% beginning January 1, 2016 and will increase by 0.625% each subsequent year until it reaches its final level of 2.5% on January 1, 2019.

The minimum required ratios under the Basel III Rules for well-capitalized banks (under prompt corrective action provisions) are 6.5% for Tier 1 common equity, 8.0% for Tier 1 capital, 10.0% for Total capital and 5.0% for Tier 1 leverage capital. These thresholds were effective January 1, 2015.

As of September 30, 2016, the Company and the Bank met all capital adequacy requirements to which they are subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized.

At September 30, 2016 and December 31, 2015, the Company’s and the Bank’s actual and required capital ratios were as follows (in thousands, except for ratios):


	September 30, 2016
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	366,333	13.53	%	$	216,588	8.00	%		N/A	N/A
Midland States Bank		317,823	11.72			216,957	8.00		$	271,196	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		296,148	10.94	%		162,441	6.00	%		N/A	N/A
Midland States Bank		302,122	11.14			162,718	6.00			216,957	8.00	%
Common equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		244,378	9.03	%		121,831	4.50	%		N/A	N/A
Midland States Bank		302,122	11.14			122,038	4.50			176,277	6.50	%
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		296,148	9.82	%		120,688	4.00	%		N/A	N/A
Midland States Bank		302,122	10.00			120,794	4.00			150,993	5.00	%


	December 31, 2015
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	288,958	11.82	%	$	195,550	8.00	%		N/A	N/A
Midland States Bank		270,436	11.06			195,702	8.00		$	244,628	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		210,614	8.62	%		146,662	6.00	%		N/A	N/A
Midland States Bank		254,228	10.39			146,777	6.00			195,702	8.00	%
Common equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		158,969	6.50	%		109,997	4.50	%		N/A	N/A
Midland States Bank		254,228	10.39			110,082	4.50			159,008	6.50	%
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		210,614	7.49	%		112,500	4.00	%		N/A	N/A
Midland States Bank		254,228	9.01			112,827	4.00			141,034	5.00	%

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1G
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958577-112826

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958572-112826

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958574-112826

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=35709795&loc=d3e65071-112826

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958569-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958570-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958575-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958568-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958573-112826

+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2016

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Note 17 – Fair Value of Financial Instruments

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value including a three‑level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

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

Level 2: Observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the financial instrument.

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

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

Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis as of September 30, 2016 and December 31, 2015, are summarized below (in thousands):


	September 30, 2016
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Securities available for sale:
U.S. Treasury securities	$	35,506	$	35,506	$	—	$	—
Government sponsored entity debt securities		8,990		—		8,990		—
Agency mortgage-backed securities		68,656		—		68,656		—
Non-agency mortgage-backed securities		1		—		—		1
Covered non-agency mortgage-backed securities		72,093		—		72,093		—
State and municipal securities		21,980		—		21,980		—
Corporate securities		44,986		—		37,506		7,480
Loans held for sale		61,363		—		61,363		—
Interest rate lock commitments		6,798		—		6,798		—
Total	$	320,373	$	35,506	$	277,386	$	7,481
Liabilities
Interest rate swap agreement	$	32	$	—	$	32	$	—
Forward commitments to sell mortgage-backed securities		244		—		244		—
Total	$	276	$	—	$	276	$	—
Assets measured at fair value on a non-recurring basis:
Impaired loans	$	10,542	$	—	$	3,081	$	7,461
Other real estate owned		915		—		915		—


	December 31, 2015
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Securities available for sale:
U.S. Treasury securities	$	48,302	$	48,302	$	—	$	—
Government sponsored entity debt securities		9,454		—		9,454		—
Agency mortgage-backed securities		67,527		—		67,527		—
Non-agency mortgage-backed securities		2		—		2		—
Covered non-agency mortgage-backed securities		75,979		—		75,979		—
State and municipal securities		15,494		—		15,494		—
Corporate securities		19,869		—		19,869		—
Loans held for sale		54,413		—		54,413		—
Interest rate lock commitments		6,029		—		6,029		—
Total	$	297,069	$	48,302	$	248,767	$	—
Liabilities
Interest rate swap agreement	$	126	$	—	$	126	$	—
Forward commitments to sell mortgage-backed securities		2		—		2		—
Contingent consideration		350		—		—		350
Total	$	478	$	—	$	128	$	350
Assets measured at fair value on a non-recurring basis:
Impaired loans	$	16,667	$	—	$	8,821	$	7,846
Other real estate owned		535		—		535		—

The following table presents losses recognized on assets measured on a non‑recurring basis for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Impaired loans	$	144	$	1,755	$	310	$	1,755
Other real estate owned		4		—		219		49
Total loss on assets measured on a nonrecurring basis	$	148	$	1,755	$	529	$	1,804

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 (in thousands):


					Non-Agency
	Corporate				Mortgage-Backed
	Securities				Securities
	Three Months		Nine Months		Three Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2016				2016
Balance, beginning of period	$	9,765	$	—	$	2	$	—
Transferred from Level 2		—		6,749		—		2
Transferred to Level 2		(2,000)		(2,000)		—		—
Purchases of investment securities recognized as Level 3		—		3,000		—		—
Total realized in earnings (1)		93		251		—		—
Total unrealized in other comprehensive income		(294)		(296)		—		—
Net settlements (principal and interest)		(84)		(224)		(1)		(1)
Balance, end of period	$	7,480	$	7,480	$	1	$	1

(1)

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

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 (in thousands). There was no activity for the three months ended September 30, 2015.


	Covered Non-Agency
	Mortgage-Backed
	Securities
Balance, beginning of period	$	56,437
Total realized in earnings (1)		1,487
Transferred to Level 2		(55,910)
Net settlements (principal and interest)		(2,014)
Balance, end of period	$	—

(1)

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

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

The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30, 2016
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
					assets		inputs		inputs
	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	227,496	$	227,496	$	227,496	$	—	$	—
Federal funds sold		534		534		534		—		—
Investment securities available for sale		252,212		252,212		35,506		209,225		7,481
Investment securities held to maturity		82,941		88,590		—		88,590		—
Nonmarketable equity securities		18,810		18,810		—		18,810		—
Loans, net		2,297,219		2,316,066		—		—		2,316,066
Loans held for sale		61,363		61,363		—		61,363		—
Accrued interest receivable		8,811		8,811		—		8,811		—
Interest rate lock commitments		6,798		6,798		—		6,798		—
Liabilities
Deposits	$	2,420,032	$	2,422,295	$	—	$	2,422,295	$	—
Short-term borrowings		138,289		138,289		—		138,289		—
FHLB and other borrowings		237,543		237,896		—		237,896		—
Subordinated debt		54,484		50,260		—		50,260		—
Trust preferred debentures		37,316		31,885		—		31,885		—
Accrued interest payable		1,875		1,875		—		1,875		—
Interest rate swap agreement		32		32		—		32		—
Forward commitments to sell mortgage-backed securities		244		244		—		244		—


	December 31, 2015
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
					assets		inputs		inputs
	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	211,976	$	211,976	$	211,976	$	—	$	—
Federal funds sold		499		499		499		—		—
Investment securities available for sale		236,627		236,627		48,302		188,325		—
Investment securities held to maturity		87,521		92,816		—		92,816		—
Nonmarketable equity securities		15,472		15,472		—		15,472		—
Loans, net		1,979,601		1,992,745		—		—		1,992,745
Loans held for sale		54,413		54,413		—		54,413		—
Accrued interest receivable		7,697		7,697		—		7,697		—
Interest rate lock commitments		6,029		6,029		—		6,029		—
Liabilities
Deposits	$	2,367,648	$	2,371,397	$	—	$	2,371,397	$	—
Short-term borrowings		107,538		107,538		—		107,538		—
FHLB and other borrowings		40,178		40,054		—		40,054		—
Subordinated debt		61,859		58,198		—		58,198		—
Trust preferred debentures		37,057		33,537		—		33,537		—
Accrued interest payable		979		979		—		979		—
Interest rate swap agreement		126		126		—		126		—
Forward commitments to sell mortgage-backed securities		2		2		—		2		—

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

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

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

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

For securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During the nine months ended September 30, 2016, $6.7 million of corporate securities and $2,000 of non-agency mortgage backed securities were transferred from Level 2 to Level 3 because observable market inputs were not available and the securities were not actively traded; therefore, the fair value was determined through consensus pricing and discounted cash flow models.

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

During both the three and nine months ended September 30, 2016, $2.0 million of corporate securities were transferred from Level 3 to Level 2 because a more liquid market for these securities had developed and prices supported by observable market inputs had become available.

The fair value of non-agency mortgage backed securities classified as Level 3 is determined utilizing a discounted cash flow model. Significant unobservable inputs include discount rate (range of 4.0% - 14.0%; weighted average of 6.5%), cumulative prepayment rate (range of 0.0% - 100.0%; weighted average of 14.0%), cumulative default (range of 1.5% - 100%; weighted average of 11.0%), and loss given default (range of 85% - 100%; weighted average of 96.5%). In general, prepayment rates increase when market rates decline and decrease as market rates rise. Typically, higher prepayment rates result in lower fair values. Credit loss estimates are driven by the borrower’s ability to pay their loans and the value of underlying collateral. These metrics typically increase when macroeconomic conditions worsen. Generally, discount rates increase with market interest rates and credit and liquidity risks increase. Higher discount rates and credit spreads typically result in lower fair market values.

During the nine months ended September 30, 2015, $55.9 million of covered non-agency mortgage-backed securities were transferred from Level 3 to Level 2 because a more liquid market for these securities had developed and prices supported by observable market inputs had become available.

During the three months ended September 30, 2016, there was no OTTI recognized on investment securities available for sale. During the three months ended September 30, 2015, we recorded $299,000 of OTTI, net of applicable loss-share reimbursements, on non-agency mortgage-backed securities covered by FDIC loss-sharing agreements. During the nine months ended September 30, 2016 and 2015, we recorded $824,000 and $461,000, respectively, of OTTI, net of applicable loss-share reimbursements, on non-agency mortgage‑backed securities covered by FDIC loss-sharing agreements.

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

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

Nonmarketable equity securities. The carrying amounts approximate their fair values.

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

Non-covered impaired loans. Non-covered impaired loans are measured and recorded at fair value on a non-recurring basis. All of our non-covered nonaccrual loans and restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure impaired loans based on the estimated fair value of such collateral. The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment. The loan balances shown in the above tables represent nonaccrual and restructured loans for which impairment was recognized during the three and nine months ended September 30, 2016 and 2015. The amounts shown as losses represent, for the loan balances shown, the impairment recognized during those same years.

Covered loans. Covered loans were measured at estimated fair value on the date of acquisition. Thereafter, the fair value of covered loans is measured using the same methodology as that for non-covered loans. The above discussion for non-covered loans and non-covered impaired loans is applicable to covered loans following their acquisition date.

Loans held for sale. Loans held for sale are carried at either fair value, if elected, or the lower of cost or fair value on an individual loan basis. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market. At September 30, 2016 and December 31, 2015, loans held for sale were carried at fair value.

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

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

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

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

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

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

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

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

- 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, 2016

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Note 18 – 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, 2016 and December 31, 2015 are as follows (in thousands):


	September 30,		December 31,
	2016		2015
Commitments to extend credit	$	504,937	$	495,506
Financial guarantees – standby letters of credit		35,608		31,029

The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis, primarily to government-sponsored enterprises (“GSEs”). The Company’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Company may be obligated to repurchase the loan or reimburse the GSEs for losses incurred. The make-whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. The Company establishes a mortgage repurchase liability related to these events that reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on a combination of factors. Such factors incorporate the volume of loans sold in 2016 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. As a result of make-whole requests and loan repurchases, the Company incurred losses totaling $83,000 for the nine months ended September 30, 2016, and $12,000 and $65,000 for the three and nine months ended September 30, 2015, respectively. There were no losses incurred for the three months ended September 30, 2016. The liability for unresolved repurchase demands totaled $340,000 and $378,000 at September 30, 2016 and December 31, 2015, respectively.

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2016

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 19 – Segment Information

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

Selected business segment financial information as of and for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
Three Months Ended September 30, 2016
Net interest income (expense)	$	28,394	$	215	$	(1,344)	$	27,265
Provision for loan losses		1,392		—		—		1,392
Noninterest income		9,714		3,557		1,666		14,937
Noninterest expense		23,646		3,511		1,506		28,663
Income (loss) before income taxes (benefit)		13,070		261		(1,184)		12,147
Income taxes (benefit)		4,573		104		(575)		4,102
Net income (loss)	$	8,497	$	157	$	(609)	$	8,045
Total assets	$	3,252,421	$	100,516	$	(105,210)	$	3,247,727

Three Months Ended September 30, 2015
Net interest income (expense)	$	26,513	$	348	$	(1,424)	$	25,437
Provision for loan losses		6,699		—		—		6,699
Noninterest income		8,284		6,124		56		14,464
Noninterest expense		22,848		3,783		1,192		27,823
Income (loss) before income taxes (benefit)		5,250		2,689		(2,560)		5,379
Income taxes (benefit)		1,326		1,097		(495)		1,928
Net income (loss)	$	3,924	$	1,592	$	(2,065)	$	3,451
Total assets	$	2,838,074	$	82,991	$	(88,757)	$	2,832,308


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
Nine Months Ended September 30, 2016
Net interest income (expense)	$	82,939	$	712	$	(4,357)	$	79,294
Provision for loan losses		3,146		—		—		3,146
Noninterest income		21,347		19,212		1,013		41,572
Noninterest expense		69,790		12,203		5,212		87,205
Income (loss) before income taxes (benefit)		31,350		7,721		(8,556)		30,515
Income taxes (benefit)		9,348		3,088		(1,874)		10,562
Net income (loss)	$	22,002	$	4,633	$	(6,682)	$	19,953
Total assets	$	3,252,421	$	100,516	$	(105,210)	$	3,247,727

Nine Months Ended September 30, 2015
Net interest income (expense)	$	80,406	$	1,240	$	(3,191)	$	78,455
Provision for loan losses		10,075		—		—		10,075
Noninterest income		28,427		16,916		1,340		46,683
Noninterest expense		74,005		11,675		4,391		90,071
Income (loss) before income taxes (benefit)		24,753		6,481		(6,242)		24,992
Income taxes (benefit)		6,936		2,614		(1,269)		8,281
Net income (loss)	$	17,817	$	3,867	$	(4,973)	$	16,711
Total assets	$	2,838,074	$	82,991	$	(88,757)	$	2,832,308

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2016
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	Note 20 – Related Party Transactions The Company utilizes the services of a company to act as a general manager for the construction of new branch facilities. A member of our board of directors is a substantial shareholder of this company and currently serves as its Chairman. During the three months ended September 30, 2015, the Company paid $738,000 for work on various projects. There were no payments made during the three months ended September 30, 2016. During the nine months ended September 30, 2016 and 2015, the Company paid $159,000 and $1.6 million, respectively, for work on various projects. A member of our board of directors has an ownership interest in the office building located in Clayton, Missouri and three of the Bank’s full-service branch facilities. During the three and nine months ended September 30, 2016, the Company paid rent of $165,000 and $540,000, respectively, and $166,000 and $527,000 for the comparable periods in 2015, respectively.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2016
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	Note 21 – Subsequent Events On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss share agreements. The loss share agreements were related to certain assets the Bank acquired from the FDIC as part of the two FDIC-assisted bank acquisitions it had completed, one in 2009 and one in 2010. Under the terms of this agreement, the Company paid the FDIC $565,000 as consideration for the early termination. This charge was partially offset by the reversal of $214,000 of accrued loss-share liabilities that will not be paid, resulting in a one-time after tax charge of $225,000. All future gains, recoveries, charge-offs, losses and expenses related to the formerly covered assets will now be recognized by the Company with no offset due to or from the FDIC. On October 4, 2016, the Company sold previously covered non-agency mortgage-backed securities which had a carrying value of $72.1 million. As a result of the sale, the Company realized a gain totaling $14.3 million in the fourth quarter of 2016.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These interim financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto as of and for the years ended December 31, 2015, 2014 and 2013, included in our registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”) on May 23, 2016.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries, giving effect to the noncontrolling interest in subsidiaries, as more fully described below. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying unaudited consolidated financial statements. The Company operates through its wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and subsidiaries: Love Funding, Business Credit, and Heartland Premier LLC (“Premier”). All of the subsidiaries are wholly owned by the Bank as of September 30, 2016, except for Premier, which was formed as a joint venture mortgage origination operation, of which the Bank owns 51% and acts as a manager. Heartland Preferred Mortgage Company LLC (“Preferred”), formerly a subsidiary of the Bank, was a joint venture mortgage origination operation, of which the Bank owned 51% and acted as a manager. Preferred was dissolved on May 27, 2016. Premier and Preferred are included in the consolidated financial statements and the noncontrolling ownership interest is reported as a component of shareholders’ equity in the consolidated balance sheets as “noncontrolling interest in subsidiaries” and the earnings or loss attributable to the noncontrolling ownership interest is reported as “net (loss) income attributable to noncontrolling interest in subsidiaries” in the consolidated statements of income.
Use of Estimates	Use of Estimates In preparing the consolidated financial statements, we are required to make estimates and assumptions, which significantly affect the amounts reported in the consolidated financial statements. Significant estimates that are particularly susceptible to change include the fair value of investment securities, the determination of the allowance for loan losses, estimated fair values of purchased loans, valuation of real estate and other properties acquired in connection with foreclosures or in satisfaction of amounts due from borrowers on loans, and the carrying value of mortgage servicing rights. While management uses its best judgment, actual results may differ from those estimates. Current economic and market conditions significantly affect the judgments.
Impact of New Financial Accounting Standards	Impact of New Financial Accounting Standards FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The ASU supersedes revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification (“ASC”). The ASU requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to receive in exchange for those goods or services. The ASU identifies specific steps that entities should apply to achieve this principle. The new guidance was originally effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. The update is effective for the Company for the year ending December 31, 2019, although the Company may elect to adopt guidance earlier. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” – In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. The ASU requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” - In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments are expected to significantly impact net income, earnings per share, and the statement of cash flows. Implementation and administration may present challenges for companies with significant share-based payment activities. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” The amendments clarify the following two aspects of Topic 606: identifying performance obligations, and the licensing implementation guidance. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments in this update are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. Topic 606 includes two criteria for assessing whether promises to transfer goods or services are distinct. One of those criteria is that the promises are separately identifiable. This update will improve the guidance on assessing that criterion. Topic 606 also includes implementation guidance on determining whether as entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The amendments in this update are intended to improve the operability and understandability of the licensing implementation guidance. The amendments in this update affect the guidance in ASU No. 2014-09 above, which is not yet effective. The effective date will be the same as the effective date of ASU No. 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better understand their credit loss estimates. For public companies that are SEC filers, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. For public business entities, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for any organization in any interim period or fiscal year. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements.

INVESTMENT SECURITIES AVAILABLE FOR SALE (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of investment securities classified as available for sale

Investment securities classified as available for sale as of September 30, 2016 and December 31, 2015 are as follows (in thousands):


	September 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	35,499	$	13	$	6	$	35,506
Government sponsored entity debt securities		8,788		202		—		8,990
Agency mortgage-backed securities		67,536		1,134		14		68,656
Non-agency mortgage-backed securities		1		—		—		1
Covered non-agency mortgage-backed securities (1)		58,376		14,386		669		72,093
State and municipal securities		21,724		271		15		21,980
Corporate securities		44,853		526		393		44,986
Total	$	236,777	$	16,532	$	1,097	$	252,212

(1)


	December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	48,483	$	1	$	182	$	48,302
Government sponsored entity debt securities		9,404		58		8		9,454
Agency mortgage-backed securities		66,902		835		210		67,527
Non-agency mortgage-backed securities		2		—		—		2
Covered non-agency mortgage-backed securities (1)		66,397		10,886		1,304		75,979
State and municipal securities		15,441		77		24		15,494
Corporate securities		20,036		28		195		19,869
Total	$	226,665	$	11,885	$	1,923	$	236,627

(1)

Available for sale

Schedule of unrealized losses and fair values for investment securities


	September 30, 2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	17,994	$	6	$	—	$	—	$	17,994	$	6
Government sponsored entity debt securities		—		—		—		—		—		—
Agency mortgage-backed securities		5,066		14		—		—		5,066		14
Covered non-agency mortgage-backed securities		429		27		4,895		642		5,324		669
State and municipal securities		3,417		15		—		—		3,417		15
Corporate securities		10,896		386		2,984		7		13,880		393
Total	$	37,802	$	448	$	7,879	$	649	$	45,681	$	1,097


	December 31, 2015
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	42,301	$	182	$	—	$	—	$	42,301	$	182
Government sponsored entity debt securities		4,229		8		—		—		4,229		8
Agency mortgage-backed securities		19,404		167		1,932		43		21,336		210
Covered non-agency mortgage-backed securities		14,149		1,114		1,431		190		15,580		1,304
State and municipal securities		4,959		20		812		4		5,771		24
Corporate securities		11,245		172		813		23		12,058		195
Total	$	96,287	$	1,663	$	4,988	$	260	$	101,275	$	1,923

Contractual maturity of amortized cost and fair value

The maturities of all other available-for-sale investment securities are based on final contractual maturity.


	Amortized		Fair
	cost		value
Within one year	$	46,521	$	46,450
After one year through five years		109,963		120,369
After five years through ten years		64,747		68,130
After ten years		15,546		17,263
Total	$	236,777	$	252,212

INVESTMENT SECURITIES HELD TO MATURITY (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of investment securities classified as held to maturity

Investment securities classified as held to maturity as of September 30, 2016 and December 31, 2015 are as follows (in thousands):


	September 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	82,941	$	5,724	$	75	$	88,590


	December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	87,521	$	5,364	$	69	$	92,816

Held to maturity

Schedule of unrealized losses and fair values for investment securities


	September 30, 2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
State and municipal securities	$	605	$	2	$	3,306	$	73	$	3,911	$	75


	December 31, 2015
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
State and municipal securities	$	3,573	$	24	$	2,743	$	45	$	6,316	$	69

Contractual maturity of amortized cost and fair value

The amortized cost and fair value of held-to-maturity securities as of September 30, 2016, by contractual maturity, are as follows (in thousands):


	Amortized		Fair
	cost		value
Within one year	$	1,734	$	1,738
After one year through five years		17,166		17,834
After five years through ten years		43,234		47,114
After ten years		20,807		21,904
Total	$	82,941	$	88,590

- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

+ References + Details

LOANS (Tables)

9 Months Ended

Sep. 30, 2016

LOANS

Summary of loans

The following table presents total loans outstanding by portfolio, which includes Purchased Credit-Impaired (“PCI”) loans, as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Loans:
Commercial	$	545,069	$	499,573
Commercial real estate		956,298		876,784
Construction and land development		163,900		150,266
Total commercial loans		1,665,267		1,526,623
Residential real estate		216,935		163,224
Consumer		248,131		161,512
Lease financing		182,445		144,230
Total loans	$	2,312,778	$	1,995,589

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

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of September 30, 2016 (in thousands):


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	518,512	$	910,187	$	147,490	$	1,576,189
Special mention		5,293		9,411		—		14,704
Substandard		11,516		21,072		450		33,038
Substandard – nonaccrual		5,520		6,551		—		12,071
Doubtful		—		—		—		—
Not graded		611		1,610		4,483		6,704
Total (excluding PCI)	$	541,452	$	948,831	$	152,423	$	1,642,706


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	205,901	$	247,634	$	181,718	$	635,253
Impaired		4,466		202		727		5,395
Total (excluding PCI)	$	210,367	$	247,836	$	182,445	$	640,648

The following table presents the recorded investment of commercial loans (excluding PCI loans) by risk category as of December 31, 2015 (in thousands):


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	467,355	$	821,314	$	136,288	$	1,424,957
Special mention		16,589		23,737		540		40,866
Substandard		3,448		8,103		—		11,551
Substandard-nonaccrual		5,702		8,844		—		14,546
Doubtful		—		—		—		—
Not graded		351		746		3,379		4,476
Total (excluding PCI)	$	493,445	$	862,744	$	140,207	$	1,496,396


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	151,111	$	161,169	$	143,832	$	456,112
Impaired		4,155		51		398		4,604
Total (excluding PCI)	$	155,266	$	161,220	$	144,230	$	460,716

Summary of impaired loans (excluding PCI loans)

A summary of impaired loans (excluding PCI loans) as of September 30, 2016 and December 31, 2015 is as follows (in thousands):


	September 30,		December 31,
	2016		2015
Nonaccrual loans:
Commercial	$	5,520	$	5,702
Commercial real estate		6,551		8,844
Construction and land development		—		—
Residential real estate		4,063		3,516
Consumer		97		2
Lease financing		727		398
Total nonaccrual loans		16,958		18,462
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		351		865
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		—		228
Consumer		105		49
Lease financing		—		—
Total accruing loans contractually past due 90 days or more as to interest or principal payments		456		1,142
Loans modified under troubled debt restructurings:
Commercial		648		3
Commercial real estate		11,397		4,873
Construction and land development		64		—
Residential real estate		403		411
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings		12,512		5,287
Total impaired loans (excluding PCI)	$	29,926	$	24,891

Summary of impaired loans (excluding PCI loans) by portfolio

The following table presents impaired loans (excluding PCI loans) by portfolio which are individually evaluated as of September 30, 2016 and December 31, 2015, respectively (in thousands):


	September 30, 2016						December 31, 2015
			Unpaid		Related				Unpaid		Related
	Recorded		Principal		Valuation		Recorded		Principal		Valuation
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans with a valuation allowance:
Commercial	$	6,119	$	9,448	$	1,962	$	5,789	$	8,760	$	1,797
Commercial real estate		2,067		2,256		145		9,197		9,489		514
Construction and land development		64		64		6		—		26		—
Residential real estate		3,137		3,750		567		3,206		3,798		626
Consumer		202		113		37		51		52		7
Lease financing		727		727		69		398		398		50
Total impaired loans with a valuation allowance		12,316		16,358		2,786		18,641		22,523		2,994
Impaired loans with no related valuation allowance:
Commercial		400		445		—		781		781		—
Commercial real estate		15,881		16,107		—		4,520		5,840		—
Construction and land development		—		—		—		—		—		—
Residential real estate		1,329		1,493		—		949		989		—
Consumer		—		91		—		—		—		—
Lease financing		—		—		—		—		—		—
Total impaired loans with no related valuation allowance		17,610		18,136		—		6,250		7,610		—
Total impaired loans:
Commercial		6,519		9,893		1,962		6,570		9,541		1,797
Commercial real estate		17,948		18,363		145		13,717		15,329		514
Construction and land development		64		64		6		—		26		—
Residential real estate		4,466		5,243		567		4,155		4,787		626
Consumer		202		204		37		51		52		7
Lease financing		727		727		69		398		398		50
Total impaired loans (excluding PCI)	$	29,926	$	34,494	$	2,786	$	24,891	$	30,133	$	2,994

Summary of average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans


	Three Months Ended September 30,
	2016				2015
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	6,426	$	23	$	10,972	$	3
Commercial real estate		2,170		65		9,475		101
Construction and land development		65		3		9		—
Residential real estate		3,157		13		2,114		12
Consumer		115		—		35		—
Lease financing		727		—		649		—
Total impaired loans with a valuation allowance		12,660		104		23,254		116
Impaired loans with no related valuation allowance:
Commercial		439		2		383		—
Commercial real estate		15,610		—		4,632		—
Construction and land development		—		—		—		—
Residential real estate		1,341		1		1,364		3
Consumer		91		—		11		—
Lease financing		—		—		—		—
Total impaired loans with no related valuation allowance		17,481		3		6,390		3
Total impaired loans:
Commercial		6,865		25		11,355		3
Commercial real estate		17,780		65		14,107		101
Construction and land development		65		3		9		—
Residential real estate		4,498		14		3,478		15
Consumer		206		—		46		—
Lease financing		727		—		649		—
Total impaired loans (excluding PCI)	$	30,141	$	107	$	29,644	$	119


	Nine Months Ended September 30,
	2016				2015
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,115	$	24	$	12,435	$	6
Commercial real estate		2,273		115		9,897		234
Construction and land development		66		6		35		—
Residential real estate		3,234		24		2,163		25
Consumer		118		—		35		—
Lease financing		727		—		649		—
Total impaired loans with a valuation allowance		14,533		169		25,214		265
Impaired loans with no related valuation allowance:
Commercial		313		1		663		—
Commercial real estate		15,742		56		4,970		76
Construction and land development		—		—		18		—
Residential real estate		1,364		3		1,641		6
Consumer		91		—		42		8
Lease financing		—		—		—		—
Total impaired loans with no related valuation allowance		17,510		60		7,334		90
Total impaired loans:
Commercial		8,428		25		13,098		6
Commercial real estate		18,015		171		14,867		310
Construction and land development		66		6		53		—
Residential real estate		4,598		27		3,804		31
Consumer		209		—		77		8
Lease financing		727		—		649		—
Total impaired loans (excluding PCI)	$	32,043	$	229	$	32,548	$	355

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


	Nine Months Ended September 30,
	2016				2015
			Interest Income				Interest Income
	Average		Recognized		Average		Recognized
	Recorded		While on		Recorded		While on
	Investment		Impaired Status		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	8,115	$	24	$	12,435	$	6
Commercial real estate		2,273		115		9,897		234
Construction and land development		66		6		35		—
Residential real estate		3,234		24		2,163		25
Consumer		118		—		35		—
Lease financing		727		—		649		—
Total impaired loans with a valuation allowance		14,533		169		25,214		265
Impaired loans with no related valuation allowance:
Commercial		313		1		663		—
Commercial real estate		15,742		56		4,970		76
Construction and land development		—		—		18		—
Residential real estate		1,364		3		1,641		6
Consumer		91		—		42		8
Lease financing		—		—		—		—
Total impaired loans with no related valuation allowance		17,510		60		7,334		90
Total impaired loans:
Commercial		8,428		25		13,098		6
Commercial real estate		18,015		171		14,867		310
Construction and land development		66		6		53		—
Residential real estate		4,598		27		3,804		31
Consumer		209		—		77		8
Lease financing		727		—		649		—
Total impaired loans (excluding PCI)	$	32,043	$	229	$	32,548	$	355

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of September 30, 2016 (in thousands):


					Accruing
					Loans
	31-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	2,974	$	2,979	$	351	$	5,520	$	11,824	$	529,628	$	541,452
Commercial real estate		768		503		—		6,551		7,822		941,009		948,831
Construction and land development		—		22		—		—		22		152,401		152,423
Residential real estate		782		902		—		4,063		5,747		204,620		210,367
Consumer		952		414		105		97		1,568		246,268		247,836
Lease financing		22		—		—		727		749		181,696		182,445
Total (excluding PCI)	$	5,498	$	4,820	$	456	$	16,958	$	27,732	$	2,255,622	$	2,283,354

The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2015 (in thousands):


					Accruing
					Loans
	31-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	1,911	$	2,296	$	865	$	5,702	$	10,774	$	482,671	$	493,445
Commercial real estate		288		1,989		—		8,844		11,121		851,623		862,744
Construction and land development		340		—		—		—		340		139,867		140,207
Residential real estate		1,983		438		228		3,516		6,165		149,101		155,266
Consumer		565		273		49		2		889		160,331		161,220
Lease financing		37		—		—		398		435		143,795		144,230
Total (excluding PCI)	$	5,124	$	4,996	$	1,142	$	18,462	$	29,724	$	1,927,388	$	1,957,112

Summary of TDRs by loan portfolio (excluding PCI loans)


	September 30, 2016						December 31, 2015
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	648	$	34	$	682	$	3	$	40	$	43
Commercial real estate		11,397		5,102		16,499		4,873		5,332		10,205
Construction and land development		64		—		64		—		—		—
Residential real estate		403		335		738		411		383		794
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	12,512	$	5,471	$	17,983	$	5,287	$	5,755	$	11,042

(1)

These loans are still accruing interest.

(2)

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

Summary of TDRs loans by portfolio restructured and occurred within previous twelve months that subsequently defaulted


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended September 30, 2016:
Troubled debt restructurings:
Number of loans		—		2		—		—		—		—		2
Pre-modification outstanding balance	$	—	$	10,207	$	—	$	—	$	—	$	—	$	10,207
Post-modification outstanding balance		—		10,207		—		—		—		—		10,207

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

For the nine months ended September 30, 2016:
Troubled debt restructurings:
Number of loans		3		2		—		—		—		—		5
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	—	$	—	$	—	$	10,892
Post-modification outstanding balance		647		10,207		—		—		—		—		10,854

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


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
For the three months ended September 30, 2015:
Troubled debt restructurings:
Number of loans		1		—		—		—		—		—		1
Pre-modification outstanding balance	$	42	$	—	$	—	$	—	$	—	$	—	$	42
Post-modification outstanding balance		42		—		—		—		—		—		42

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

For the nine months ended September 30, 2015:
Troubled debt restructurings:
Number of loans		1		—		—		—		—		—		1
Pre-modification outstanding balance	$	42	$	—	$	—	$	—	$	—	$	—	$	42
Post-modification outstanding balance		42		—		—		—		—		—		42

Troubled debt restructurings that subsequently defaulted
Number of loans		—		1		—		—		—		—		1
Recorded balance	$	—	$	71	$	—	$	—	$	—	$	—	$	71

Summary of changes in allowance for loan losses

Changes in the allowance for loan losses for the three months ended September 30, 2016 and 2015 are as follows (in thousands):


	Three Months Ended September 30,
	2016						2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	13,629	$	1,123	$	14,752	$	14,464	$	1,742	$	16,206
Provision for loan losses		1,156		236		1,392		6,681		18		6,699
Loan charge-offs		(806)		(58)		(864)		(7,930)		(19)		(7,949)
Loan recoveries		250		29		279		172		29		201
Net loan charge-offs		(556)		(29)		(585)		(7,758)		10		(7,748)
Balance at end of period	$	14,229	$	1,330	$	15,559	$	13,387	$	1,770	$	15,157

Changes in the allowance for loan losses for the nine months ended September 30, 2016 and 2015 are as follows (in thousands):


	Nine Months Ended September 30,
	2016						2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	14,093	$	1,895	$	15,988	$	10,504	$	1,796	$	12,300
Provision for loan losses		3,752		(606)		3,146		10,163		(88)		10,075
Loan charge-offs		(4,228)		(58)		(4,286)		(8,914)		(31)		(8,945)
Loan recoveries		612		99		711		1,634		93		1,727
Net loan charge-offs		(3,616)		41		(3,575)		(7,280)		62		(7,218)
Balance at end of period	$	14,229	$	1,330	$	15,559	$	13,387	$	1,770	$	15,157

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

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses for the three months ended September 30, 2016:
Beginning balance	$	6,186	$	3,511	$	569	$	2,584	$	827	$	1,075	$	14,752
Provision for loan losses		1,216		(12)		(271)		220		326		(87)		1,392
Charge-offs		(251)		(214)		(1)		(153)		(91)		(154)		(864)
Recoveries		36		129		13		32		20		49		279
Ending balance	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559

Changes in allowance for loan losses for the three months ended September 30, 2015:
Beginning balance	$	5,488	$	7,657	$	435	$	1,883	$	611	$	132	$	16,206
Provision for loan losses		7,294		(2,097)		48		799		282		373		6,699
Charge-offs		(7,486)		(12)		(23)		(318)		(110)		—		(7,949)
Recoveries		56		57		8		52		25		3		201
Ending balance	$	5,352	$	5,605	$	468	$	2,416	$	808	$	508	$	15,157

Changes in allowance for loan losses for the nine months ended September 30, 2016:
Beginning balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Provision for loan losses		2,619		(1,520)		(154)		886		479		836		3,146
Charge-offs		(2,513)		(461)		(1)		(454)		(225)		(632)		(4,286)
Recoveries		164		216		30		131		79		91		711
Ending balance	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559

Changes in allowance for loan losses for the nine months ended September 30, 2015:
Beginning balance	$	2,284	$	6,925	$	486	$	2,038	$	567	$	—	$	12,300
Provision for loan losses		9,514		(1,316)		(4)		922		386		573		10,075
Charge-offs		(7,587)		(307)		(39)		(665)		(237)		(110)		(8,945)
Recoveries		1,141		303		25		121		92		45		1,727
Ending balance	$	5,352	$	5,605	$	468	$	2,416	$	808	$	508	$	15,157


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
September 30, 2016:

Allowance for loan losses:
Loans individually evaluated for impairment	$	1,950	$	118	$	6	$	359	$	14	$	5	$	2,452
Loans collectively evaluated for impairment		12		27		—		207		23		65		334
Non-impaired loans collectively evaluated for impairment		4,569		3,041		304		1,694		1,022		813		11,443
Loans acquired with deteriorated credit quality (1)		656		228		—		423		23		—		1,330
Total allowance for loan losses	$	7,187	$	3,414	$	310	$	2,683	$	1,082	$	883	$	15,559
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	6,423	$	17,728	$	64	$	2,752	$	14	$	198	$	27,179
Impaired loans collectively evaluated for impairment		96		220		—		1,714		188		529		2,747
Non-impaired loans collectively evaluated for impairment		534,933		930,883		152,359		205,901		247,634		181,718		2,253,428
Loans acquired with deteriorated credit quality (1)		3,617		7,467		11,477		6,568		295		—		29,424
Total recorded investment (loan balance)	$	545,069	$	956,298	$	163,900	$	216,935	$	248,131	$	182,445	$	2,312,778


December 31, 2015:

Allowance for loan losses:
Loans individually evaluated for impairment	$	1,765	$	479	$	—	$	452	$	—	$	—	$	2,696
Loans collectively evaluated for impairment		32		35		—		174		7		50		298
Non-impaired loans collectively evaluated for impairment		4,745		3,662		419		1,000		735		538		11,099
Loans acquired with deteriorated credit quality (1)		375		1,003		16		494		7		—		1,895
Total allowance for loan losses	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Recorded investment (loan balance):
Impaired loans individually evaluated for impairment	$	6,316	$	13,434	$	—	$	2,778	$	—	$	—	$	22,528
Impaired loans collectively evaluated for impairment		254		283		—		1,377		51		398		2,363
Non-impaired loans collectively evaluated for impairment		486,875		849,027		140,207		151,111		161,169		143,832		1,932,221
Loans acquired with deteriorated credit quality (1)		6,128		14,040		10,059		7,958		292		—		38,477
Total recorded investment (loan balance)	$	499,573	$	876,784	$	150,266	$	163,224	$	161,512	$	144,230	$	1,995,589

(1)

Summary of changes in accretable yield for PCI loans

Changes in the accretable yield for PCI loans were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Balance at beginning of period	$	6,729	$	14,237	$	10,526	$	16,198
Accretion		(1,810)		(1,006)		(7,066)		(3,013)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		179		—		(96)		67
Reclassification from non-accretable		2,568		325		4,302		304
Balance at end of period	$	7,666	$	13,556	$	7,666	$	13,556

Summary of carrying amount of covered loans and non-covered loans consisted of purchased credit-impaired loans and non-purchased credit-impaired loans

The carrying amount of covered loans and non-covered loans as of September 30, 2016 and December 31, 2015 consisted of PCI loans and non-PCI loans as shown in the following table (in thousands):


	September 30, 2016						December 31, 2015
	Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total
Covered loans: (1)
Commercial	$	—	$	—	$	—	$	378	$	1,067	$	1,445
Commercial real estate		—		—		—		876		318		1,194
Construction and land development		—		—		—		—		—		—
Residential real estate		688		98		786		715		275		990
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total covered loans		688		98		786		1,969		1,660		3,629

Non-covered loans:
Commercial		541,452		3,617		545,069		493,067		5,061		498,128
Commercial real estate		948,831		7,467		956,298		861,868		13,722		875,590
Construction and land development		152,423		11,477		163,900		140,207		10,059		150,266
Residential real estate		209,679		6,470		216,149		154,551		7,683		162,234
Consumer		247,836		295		248,131		161,220		292		161,512
Lease financing		182,445		—		182,445		144,230		—		144,230
Total non-covered loans		2,282,666		29,326		2,311,992		1,955,143		36,817		1,991,960
Total loans	$	2,283,354	$	29,424	$	2,312,778	$	1,957,112	$	38,477	$	1,995,589

(1)

MORTGAGE SERVICING RIGHTS (Tables)

9 Months Ended

Sep. 30, 2016

MORTGAGE SERVICING RIGHTS

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

A summary of mortgage loans serviced for others as of September 30, 2016 and December 31, 2015 is as follows (in thousands):


	September 30,		December 31,
	2016		2015
Commercial FHA mortgage loans	$	3,806,872	$	3,649,524
Residential mortgage loans		1,821,151		1,826,280
Total loans serviced for others	$	5,628,023	$	5,475,804

Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Mortgage servicing rights:
Balance at beginning of period	$	68,395	$	64,921	$	67,218	$	62,900
Servicing rights capitalized – commercial FHA mortgage loans		3,506		1,411		5,777		2,866
Servicing rights capitalized – residential mortgage loans		1,125		1,105		2,764		4,185
Amortization – commercial FHA mortgage loans		(592)		(552)		(1,741)		(1,708)
Amortization – residential mortgage loans		(1,085)		(673)		(2,669)		(2,031)
Balance at end of period		71,349		66,212		71,349		66,212
Valuation allowances:
Balance at beginning of period		5,587		—		567		119
Additions		1,073		795		6,301		1,630
Reductions		—		—		(208)		(954)
Balance at end of period		6,660		795		6,660		795
Mortgage servicing rights, net	$	64,689	$	65,417	$	64,689	$	65,417
Fair value:
At beginning of period	$	62,960	$	66,442	$	66,700	$	62,781
At end of period	$	64,689	$	66,074	$	64,689	$	66,074

Schedule of summary of key assumptions


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
September 30, 2016:
Commercial FHA mortgage loans	0.13	%	3.75	%	30.3	8.33	%	$	1,000	10 - 13	%
Residential mortgage loans	0.27	%	3.93	%	24.2	18.42	%	$	73.46	9 - 11	%

December 31, 2015:
Commercial FHA mortgage loans	0.12	%	3.85	%	30.6	8.53	%	$	1,000	10 - 13	%
Residential mortgage loans	0.27	%	3.96	%	24.4	11.22	%	$	73.66	9 - 11	%

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

GOODWILL AND INTANGIBLE ASSETS

Schedule of intangible assets

The Company’s intangible assets, consisting of core deposit and trust relationship intangibles, as of September 30, 2016 and December 31, 2015 are summarized as follows (in thousands):


	September 30, 2016						December 31, 2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	20,542	$	(15,770)	$	4,772	$	20,542	$	(14,471)	$	6,071
Customer relationship intangibles		3,141		(2,522)		619		3,141		(2,208)		933
Total intangible assets	$	23,683	$	(18,292)	$	5,391	$	23,683	$	(16,679)	$	7,004

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2016

DERIVATIVE INSTRUMENTS

Schedule of derivative instruments, fair valule and notional amounts


	Notional Amount				Fair Value Gain
	September 30,		December 31,		September 30,		December 31,
	2016		2015		2016		2015
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	294,010	$	257,023	$	6,798	$	6,029


	Notional Amount				Fair Value Loss
	September 30,		December 31,		September 30,		December 31,
	2016		2015		2016		2015
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	323,103	$	278,313	$	244	$	2

DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2016

Deposits [Abstract]

Schedule Of interest and non interest bearing deposits

The following table summarizes the classification of deposits as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Noninterest-bearing demand	$	629,113	$	543,401
Interest-bearing:
NOW		658,021		621,925
Money market		366,193		377,654
Savings		162,742		155,778
Time		603,963		668,890
Total deposits	$	2,420,032	$	2,367,648

SHORT-TERM BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2016

SHORT-TERM BORROWINGS

Schedule of short term borrowings


	Repurchase Agreements
	September 30,			December 31,
	2016			2015
Outstanding at period-end	$	138,289		$	107,538
Average amount outstanding		123,191			123,447
Maximum amount outstanding at any month end		138,289			147,542
Weighted average interest rate:
During period		0.24	%		0.19	%
End of period		0.23	%		0.21	%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2016

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) advances

The following table summarizes our Federal Home Loan Bank (“FHLB”) advances and other borrowings as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
FHLB advances – fixed rate, fixed term, at rates averaging 0.66% and 0.93%, respectively, at September 30, 2016 and December 31, 2015 – maturing through May 2023	$	237,500	$	40,000
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018		43		178
Total FHLB advances and other borrowings	$	237,543	$	40,178

SUBORDINATED DEBT (Tables)

9 Months Ended

Sep. 30, 2016

SUBORDINATED DEBT

Schedule of summary of company's subordinated debt

The following table summarizes the Company’s subordinated debt as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Subordinated debt issued June 2013 – fixed interest rate of 8.25%, $8,000 maturing June 28, 2021	$	—	$	7,448
Subordinated debt issued June 2015 – fixed interest rate of 6.00% for the first five years through June 2020 and a variable interest rate equivalent to three month LIBOR plus 4.35% thereafter, $40,325 maturing June 18, 2025		39,712		39,659
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,772		14,752
Total subordinated debt	$	54,484	$	61,859

TRUST PREFERRED DEBENTURES (Tables)

9 Months Ended

Sep. 30, 2016

TRUST PREFERRED DEBENTURES.

Summary of trust preferred debentures

The following table summarizes the Company’s trust preferred debentures as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30,		December 31,
	2016		2015
Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.61% and 3.17%, at September 30, 2016 and December 31, 2015, respectively – $3,000 maturing January 23, 2034	$	1,980	$	1,932
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.46% and 3.07% at September 30, 2016 and December 31, 2015, respectively – $10,000 maturing April 23, 2034		9,956		9,954
LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.60% and 2.26% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing December 31, 2036		13,105		13,001
LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.31% and 1.92% at September 30, 2016 and December 31, 2015, respectively – $20,000 maturing September 6, 2037		12,275		12,170
Total trust preferred debentures	$	37,316	$	37,057

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2016

EARNINGS PER SHARE

Schedule of basic and diluted earnings per common share

Presented below are the calculations for basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except for share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	8,051	$	3,445	$	19,959	$	16,629
Common shareholder dividends		(2,773)		(1,881)		(7,022)		(5,643)
Unvested restricted stock award dividends		(12)		(12)		(35)		(37)
Undistributed earnings to unvested restricted stock awards		(26)		(10)		(69)		(71)
Undistributed earnings to common shareholders	$	5,240	$	1,542	$	12,833	$	10,878
Basic
Distributed earnings to common shareholders	$	2,773	$	1,881	$	7,022	$	5,643
Undistributed earnings to common shareholders		5,240		1,542		12,833		10,878
Total common shareholders earnings, basic	$	8,013	$	3,423	$	19,855	$	16,521
Diluted
Distributed earnings to common shareholders	$	2,773	$	1,881	$	7,022	$	5,643
Undistributed earnings to common shareholders		5,240		1,542		12,833		10,878
Total common shareholders earnings		8,013		3,423		19,855		16,521
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		—		—		1		1
Total common shareholders earnings, diluted	$	8,013	$	3,423	$	19,856	$	16,522
Weighted average common shares outstanding, basic		15,578,703		11,911,414		13,637,997		11,895,337
Options and warrants		279,570		219,115		264,667		216,358
Weighted average common shares outstanding, diluted		15,858,273		12,130,529		13,902,664		12,111,695
Basic earnings per common share	$	0.51	$	0.29	$	1.46	$	1.39
Diluted earnings per common share		0.51		0.28		1.43		1.36

CAPITAL REQUIREMENTS (Tables)

9 Months Ended

Sep. 30, 2016

CAPITAL REQUIREMENTS

Schedule of actual and required capital amounts and ratios

At September 30, 2016 and December 31, 2015, the Company’s and the Bank’s actual and required capital ratios were as follows (in thousands, except for ratios):


	September 30, 2016
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	366,333	13.53	%	$	216,588	8.00	%		N/A	N/A
Midland States Bank		317,823	11.72			216,957	8.00		$	271,196	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		296,148	10.94	%		162,441	6.00	%		N/A	N/A
Midland States Bank		302,122	11.14			162,718	6.00			216,957	8.00	%
Common equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		244,378	9.03	%		121,831	4.50	%		N/A	N/A
Midland States Bank		302,122	11.14			122,038	4.50			176,277	6.50	%
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		296,148	9.82	%		120,688	4.00	%		N/A	N/A
Midland States Bank		302,122	10.00			120,794	4.00			150,993	5.00	%


	December 31, 2015
									Required to be
					Minimum Required				Well Capitalized Under
					For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Requirements
	Amount		Ratio		Amount		Ratio			Amount	Ratio
Total capital (to risk-weighted assets):
Midland States Bancorp, Inc.	$	288,958	11.82	%	$	195,550	8.00	%		N/A	N/A
Midland States Bank		270,436	11.06			195,702	8.00		$	244,628	10.00	%
Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		210,614	8.62	%		146,662	6.00	%		N/A	N/A
Midland States Bank		254,228	10.39			146,777	6.00			195,702	8.00	%
Common equity Tier 1 capital (to risk-weighted assets):
Midland States Bancorp, Inc.		158,969	6.50	%		109,997	4.50	%		N/A	N/A
Midland States Bank		254,228	10.39			110,082	4.50			159,008	6.50	%
Tier 1 leverage (to average assets):
Midland States Bancorp, Inc.		210,614	7.49	%		112,500	4.00	%		N/A	N/A
Midland States Bank		254,228	9.01			112,827	4.00			141,034	5.00	%

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2016

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured and recorded at fair value


	September 30, 2016
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Securities available for sale:
U.S. Treasury securities	$	35,506	$	35,506	$	—	$	—
Government sponsored entity debt securities		8,990		—		8,990		—
Agency mortgage-backed securities		68,656		—		68,656		—
Non-agency mortgage-backed securities		1		—		—		1
Covered non-agency mortgage-backed securities		72,093		—		72,093		—
State and municipal securities		21,980		—		21,980		—
Corporate securities		44,986		—		37,506		7,480
Loans held for sale		61,363		—		61,363		—
Interest rate lock commitments		6,798		—		6,798		—
Total	$	320,373	$	35,506	$	277,386	$	7,481
Liabilities
Interest rate swap agreement	$	32	$	—	$	32	$	—
Forward commitments to sell mortgage-backed securities		244		—		244		—
Total	$	276	$	—	$	276	$	—
Assets measured at fair value on a non-recurring basis:
Impaired loans	$	10,542	$	—	$	3,081	$	7,461
Other real estate owned		915		—		915		—


	December 31, 2015
			Quoted prices
			in active		Significant
			markets		other		Significant
			for identical		observable		unobservable
			assets		inputs		inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Securities available for sale:
U.S. Treasury securities	$	48,302	$	48,302	$	—	$	—
Government sponsored entity debt securities		9,454		—		9,454		—
Agency mortgage-backed securities		67,527		—		67,527		—
Non-agency mortgage-backed securities		2		—		2		—
Covered non-agency mortgage-backed securities		75,979		—		75,979		—
State and municipal securities		15,494		—		15,494		—
Corporate securities		19,869		—		19,869		—
Loans held for sale		54,413		—		54,413		—
Interest rate lock commitments		6,029		—		6,029		—
Total	$	297,069	$	48,302	$	248,767	$	—
Liabilities
Interest rate swap agreement	$	126	$	—	$	126	$	—
Forward commitments to sell mortgage-backed securities		2		—		2		—
Contingent consideration		350		—		—		350
Total	$	478	$	—	$	128	$	350
Assets measured at fair value on a non-recurring basis:
Impaired loans	$	16,667	$	—	$	8,821	$	7,846
Other real estate owned		535		—		535		—

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

The following table presents losses recognized on assets measured on a non‑recurring basis for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Impaired loans	$	144	$	1,755	$	310	$	1,755
Other real estate owned		4		—		219		49
Total loss on assets measured on a nonrecurring basis	$	148	$	1,755	$	529	$	1,804

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


					Non-Agency
	Corporate				Mortgage-Backed
	Securities				Securities
	Three Months		Nine Months		Three Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2016				2016
Balance, beginning of period	$	9,765	$	—	$	2	$	—
Transferred from Level 2		—		6,749		—		2
Transferred to Level 2		(2,000)		(2,000)		—		—
Purchases of investment securities recognized as Level 3		—		3,000		—		—
Total realized in earnings (1)		93		251		—		—
Total unrealized in other comprehensive income		(294)		(296)		—		—
Net settlements (principal and interest)		(84)		(224)		(1)		(1)
Balance, end of period	$	7,480	$	7,480	$	1	$	1

(1)

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


	Covered Non-Agency
	Mortgage-Backed
	Securities
Balance, beginning of period	$	56,437
Total realized in earnings (1)		1,487
Transferred to Level 2		(55,910)
Net settlements (principal and interest)		(2,014)
Balance, end of period	$	—

(1)

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

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

The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30, 2016
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
					assets		inputs		inputs
	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	227,496	$	227,496	$	227,496	$	—	$	—
Federal funds sold		534		534		534		—		—
Investment securities available for sale		252,212		252,212		35,506		209,225		7,481
Investment securities held to maturity		82,941		88,590		—		88,590		—
Nonmarketable equity securities		18,810		18,810		—		18,810		—
Loans, net		2,297,219		2,316,066		—		—		2,316,066
Loans held for sale		61,363		61,363		—		61,363		—
Accrued interest receivable		8,811		8,811		—		8,811		—
Interest rate lock commitments		6,798		6,798		—		6,798		—
Liabilities
Deposits	$	2,420,032	$	2,422,295	$	—	$	2,422,295	$	—
Short-term borrowings		138,289		138,289		—		138,289		—
FHLB and other borrowings		237,543		237,896		—		237,896		—
Subordinated debt		54,484		50,260		—		50,260		—
Trust preferred debentures		37,316		31,885		—		31,885		—
Accrued interest payable		1,875		1,875		—		1,875		—
Interest rate swap agreement		32		32		—		32		—
Forward commitments to sell mortgage-backed securities		244		244		—		244		—


	December 31, 2015
					Quoted prices
					in active		Significant
					markets		other		Significant
					for identical		observable		unobservable
					assets		inputs		inputs
	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and due from banks	$	211,976	$	211,976	$	211,976	$	—	$	—
Federal funds sold		499		499		499		—		—
Investment securities available for sale		236,627		236,627		48,302		188,325		—
Investment securities held to maturity		87,521		92,816		—		92,816		—
Nonmarketable equity securities		15,472		15,472		—		15,472		—
Loans, net		1,979,601		1,992,745		—		—		1,992,745
Loans held for sale		54,413		54,413		—		54,413		—
Accrued interest receivable		7,697		7,697		—		7,697		—
Interest rate lock commitments		6,029		6,029		—		6,029		—
Liabilities
Deposits	$	2,367,648	$	2,371,397	$	—	$	2,371,397	$	—
Short-term borrowings		107,538		107,538		—		107,538		—
FHLB and other borrowings		40,178		40,054		—		40,054		—
Subordinated debt		61,859		58,198		—		58,198		—
Trust preferred debentures		37,057		33,537		—		33,537		—
Accrued interest payable		979		979		—		979		—
Interest rate swap agreement		126		126		—		126		—
Forward commitments to sell mortgage-backed securities		2		2		—		2		—

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables)

9 Months Ended

Sep. 30, 2016

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Schedule of Loan Commitments

Loan commitments as of September 30, 2016 and December 31, 2015 are as follows (in thousands):


	September 30,		December 31,
	2016		2015
Commitments to extend credit	$	504,937	$	495,506
Financial guarantees – standby letters of credit		35,608		31,029

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2016

SEGMENT INFORMATION

Schedule of segment financial information

Selected business segment financial information as of and for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
Three Months Ended September 30, 2016
Net interest income (expense)	$	28,394	$	215	$	(1,344)	$	27,265
Provision for loan losses		1,392		—		—		1,392
Noninterest income		9,714		3,557		1,666		14,937
Noninterest expense		23,646		3,511		1,506		28,663
Income (loss) before income taxes (benefit)		13,070		261		(1,184)		12,147
Income taxes (benefit)		4,573		104		(575)		4,102
Net income (loss)	$	8,497	$	157	$	(609)	$	8,045
Total assets	$	3,252,421	$	100,516	$	(105,210)	$	3,247,727

Three Months Ended September 30, 2015
Net interest income (expense)	$	26,513	$	348	$	(1,424)	$	25,437
Provision for loan losses		6,699		—		—		6,699
Noninterest income		8,284		6,124		56		14,464
Noninterest expense		22,848		3,783		1,192		27,823
Income (loss) before income taxes (benefit)		5,250		2,689		(2,560)		5,379
Income taxes (benefit)		1,326		1,097		(495)		1,928
Net income (loss)	$	3,924	$	1,592	$	(2,065)	$	3,451
Total assets	$	2,838,074	$	82,991	$	(88,757)	$	2,832,308


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
Nine Months Ended September 30, 2016
Net interest income (expense)	$	82,939	$	712	$	(4,357)	$	79,294
Provision for loan losses		3,146		—		—		3,146
Noninterest income		21,347		19,212		1,013		41,572
Noninterest expense		69,790		12,203		5,212		87,205
Income (loss) before income taxes (benefit)		31,350		7,721		(8,556)		30,515
Income taxes (benefit)		9,348		3,088		(1,874)		10,562
Net income (loss)	$	22,002	$	4,633	$	(6,682)	$	19,953
Total assets	$	3,252,421	$	100,516	$	(105,210)	$	3,247,727

Nine Months Ended September 30, 2015
Net interest income (expense)	$	80,406	$	1,240	$	(3,191)	$	78,455
Provision for loan losses		10,075		—		—		10,075
Noninterest income		28,427		16,916		1,340		46,683
Noninterest expense		74,005		11,675		4,391		90,071
Income (loss) before income taxes (benefit)		24,753		6,481		(6,242)		24,992
Income taxes (benefit)		6,936		2,614		(1,269)		8,281
Net income (loss)	$	17,817	$	3,867	$	(4,973)	$	16,711
Total assets	$	2,838,074	$	82,991	$	(88,757)	$	2,832,308

BUSINESS DESCRIPTION (Details) $ in Millions				9 Months Ended
BUSINESS DESCRIPTION (Details) $ in Millions	Jun. 06, 2016 USD ($) shares	Jun. 06, 2016 USD ($) shares	May 24, 2016 USD ($) shares	Sep. 30, 2016 item shares	Dec. 31, 2015 shares
Number of acquisitions \| item				9
Number of mortgage offices \| item				3
Common Stock, Shares, Issued				15,404,423	11,797,404
Proceeds from the IPO \| $		$ 71.5
IPO
Shares issued				3,590,065
Common Stock, Shares, Issued			3,044,252
Proceeds from the IPO \| $			$ 67.0
Over-Allotment Option [Member]
Common Stock, Shares, Issued	545,813	545,813
Proceeds from the IPO \| $	$ 12.0

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Sep. 30, 2016
Premier
Ownership interest (as a percentage)	51.00%
Preferred
Ownership interest (as a percentage)	51.00%

ACQUISITIONS (Details)	Sep. 30, 2016 USD ($)	Dec. 31, 2014 USD ($) item shares
Scenario, Forecast [Member] \| Sterling \| Merger agreement
Business Acquisition [Line Items]
Total Purchase consideration	$ 400,000,000
Consideration paid in cash	$ 4,800,000
Heartland \| LSHC
Business Acquisition [Line Items]
Amount of trust preferred debentures		$ 40,000,000
Amortization period		10 years
Fair value of the noncontrolling interest		$ 500,000
Number of mortgage origination joint ventures \| item		2
Ownership interest (as a percentage)		51.00%
Heartland \| LSHC \| Core deposits
Business Acquisition [Line Items]
Intangibles		$ 3,400,000
Heartland \| LSHC \| Banking
Business Acquisition [Line Items]
Number of locations of operations \| item		10
Heartland \| LSHC \| Loan Production
Business Acquisition [Line Items]
Number of locations of operations \| item		3
Heartland \| LSHC \| Branch
Business Acquisition [Line Items]
Number of locations of operations \| item		1
LFC \| LSHC
Business Acquisition [Line Items]
Total Purchase consideration		$ 67,300,000
Number of common stock shares issued \| shares		2,224,091
Consideration paid in cash		$ 20,100,000
Accrual of other liabilities fair value		$ 530,000
Number of years of earnings		2 years
Adjusted net income (as a percentage)		50.00%
Minimum earnings		$ 9,100,000
Contingent consideration		$ 12,000,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Classified (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investment securities classified as available for sale
Amortized cost	$ 236,777	$ 226,665
Gross unrealized gains	16,532	11,885
Gross unrealized losses	1,097	1,923
Fair value	252,212	236,627
U.S. Treasury securities
Investment securities classified as available for sale
Amortized cost	35,499	48,483
Gross unrealized gains	13	1
Gross unrealized losses	6	182
Fair value	35,506	48,302
Government sponsored entity debt securities
Investment securities classified as available for sale
Amortized cost	8,788	9,404
Gross unrealized gains	202	58
Gross unrealized losses		8
Fair value	8,990	9,454
Agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost	67,536	66,902
Gross unrealized gains	1,134	835
Gross unrealized losses	14	210
Fair value	68,656	67,527
Non-agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost	1	2
Fair value	1	2
Covered non-agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost	58,376	66,397
Gross unrealized gains	14,386	10,886
Gross unrealized losses	669	1,304
Fair value	72,093	75,979
State and municipal securities
Investment securities classified as available for sale
Amortized cost	21,724	15,441
Gross unrealized gains	271	77
Gross unrealized losses	15	24
Fair value	21,980	15,494
Corporate securities
Investment securities classified as available for sale
Amortized cost	44,853	20,036
Gross unrealized gains	526	28
Gross unrealized losses	393	195
Fair value	$ 44,986	$ 19,869

INVESTMENT SECURITIES AVAILABLE FOR SALE - Continuous unrealized loss position (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($) item	Sep. 30, 2015 USD ($) item	Sep. 30, 2016 USD ($) item	Sep. 30, 2015 USD ($) item	Dec. 31, 2015 USD ($) item
Securities available for sale:
Less than 12 Months, Fair value	$ 37,802,000		$ 37,802,000		$ 96,287,000
Less than 12 Months, Unrealized loss			448,000		1,663,000
12 Months or more, Fair value	7,879,000		7,879,000		4,988,000
12 Months or more, Unrealized loss			649,000		260,000
Total, Fair value	$ 45,681,000		45,681,000		101,275,000
Total, Unrealized loss			$ 1,097,000		$ 1,923,000
Unrealized loss
Number of securities, unrealized losses \| item	30		30		54
Aggregate depreciation	2.35%		2.35%		1.86%
Other than temporary impairment:
Number of other than temporary impairment securities \| item		2
Other than temporary impairment, recognized as losses	$ 0	$ 299,000
U.S. Treasury securities
Securities available for sale:
Less than 12 Months, Fair value	17,994,000		$ 17,994,000
Less than 12 Months, Unrealized loss			6,000
Total, Fair value	17,994,000		17,994,000
Total, Unrealized loss			6,000
Government sponsored entity debt securities
Securities available for sale:
Less than 12 Months, Fair value					$ 42,301,000
Less than 12 Months, Unrealized loss					182,000
Total, Fair value					42,301,000
Total, Unrealized loss					182,000
Agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	5,066,000		5,066,000		4,229,000
Less than 12 Months, Unrealized loss			14,000		8,000
Total, Fair value	5,066,000		5,066,000		4,229,000
Total, Unrealized loss			$ 14,000		8,000
Non-agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value					19,404,000
Less than 12 Months, Unrealized loss					167,000
12 Months or more, Fair value					1,932,000
12 Months or more, Unrealized loss					43,000
Total, Fair value					21,336,000
Total, Unrealized loss					210,000
Other than temporary impairment:
Number of other than temporary impairment securities \| item			3
Other than temporary impairment, recognized as losses			$ 824,000
Covered non-agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	429,000		429,000		14,149,000
Less than 12 Months, Unrealized loss			27,000		1,114,000
12 Months or more, Fair value	4,895,000		4,895,000		1,431,000
12 Months or more, Unrealized loss			642,000		190,000
Total, Fair value	5,324,000		5,324,000		15,580,000
Total, Unrealized loss			669,000		1,304,000
Other than temporary impairment:
Number of other than temporary impairment securities \| item				3
Other than temporary impairment, recognized as losses				$ 461,000
State and municipal securities
Securities available for sale:
Less than 12 Months, Fair value	3,417,000		3,417,000		4,959,000
Less than 12 Months, Unrealized loss			15,000		20,000
12 Months or more, Fair value					812,000
12 Months or more, Unrealized loss					4,000
Total, Fair value	3,417,000		3,417,000		5,771,000
Total, Unrealized loss			15,000		24,000
Corporate securities
Securities available for sale:
Less than 12 Months, Fair value	10,896,000		10,896,000		11,245,000
Less than 12 Months, Unrealized loss			386,000		172,000
12 Months or more, Fair value	2,984,000		2,984,000		813,000
12 Months or more, Unrealized loss			7,000		23,000
Total, Fair value	$ 13,880,000		13,880,000		12,058,000
Total, Unrealized loss			$ 393,000		$ 195,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Amortized cost and fair value (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Amortized cost of available-for-sale securities, by contractual maturity
Within one year	$ 46,521,000		$ 46,521,000
One to five years	109,963,000		109,963,000
Five to ten years	64,747,000		64,747,000
After ten years	15,546,000		15,546,000
Total, single maturity date	236,777,000		236,777,000
Amortized cost	236,777,000		236,777,000		$ 226,665,000
Fair Value of available-for-sale securities, by contractual maturity
Within one year	46,450,000		46,450,000
One to five years	120,369,000		120,369,000
Five to ten years	68,130,000		68,130,000
After ten years	17,263,000		17,263,000
Total, single maturity date	252,212,000		252,212,000
Fair value	252,212,000		252,212,000		236,627,000
Gross realized gains/losses
Gross realized gains	39,000	$ 1,000	315,000	$ 335,000
Gross realized losses		$ 0		$ 175,000
Agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost	67,536,000		67,536,000		66,902,000
Fair Value of available-for-sale securities, by contractual maturity
Fair value	68,656,000		68,656,000		67,527,000
Non-agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost	1,000		1,000		2,000
Fair Value of available-for-sale securities, by contractual maturity
Fair value	1,000		1,000		2,000
Covered non-agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost	58,376,000		58,376,000		66,397,000
Fair Value of available-for-sale securities, by contractual maturity
Fair value	$ 72,093,000		$ 72,093,000		$ 75,979,000

INVESTMENT SECURITIES HELD TO MATURITY - Classified (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investment securities classified as held to maturity
Amortized cost	$ 82,941	$ 87,521
Fair value	88,590	92,816
State and municipal securities
Investment securities classified as held to maturity
Amortized cost	82,941	87,521
Gross unrealized gains	5,724	5,364
Gross unrealized losses	75	69
Fair value	$ 88,590	$ 92,816

INVESTMENT SECURITIES HELD TO MATURITY - Continuous unrealized loss position (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Unrealized loss
Number of securities, unrealized losses \| item	17	25
Aggregate depreciation	1.88%	1.08%
State and municipal securities
Securities held to maturity:
Less than 12 Months, Fair value	$ 605	$ 3,573
Less than 12 Months, Unrealized loss	2	24
12 Months or more, Fair value	3,306	2,743
12 Months or more, Unrealized loss	73	45
Total, Fair value	3,911	6,316
Total, Unrealized loss	$ 75	$ 69

INVESTMENT SECURITIES HELD TO MATURITY - Amortized cost and fair value (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Amortized cost of held-to-maturity securities, by contractual maturity
Within one year	$ 1,734
One to five years	17,166
Five to ten years	43,234
After ten years	20,807
Amortized cost	82,941	$ 87,521
Fair Value of held-to-maturity securities, by contractual maturity
Within one year	1,738
One to five years	17,834
Five to ten years	47,114
After ten years	21,904
Fair value	$ 88,590	$ 92,816

LOANS - Summary of loans (Details) - USD ($)	3 Months Ended		9 Months Ended
LOANS - Summary of loans (Details) - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Summary of loans
Total loans	$ 2,312,778,000		$ 2,312,778,000		$ 1,995,589,000
Loans, additional information
Net deferred loan fees	3,500,000		3,500,000		5,800,000
Unearned discounts	19,700,000		19,700,000		15,700,000
Loans held for sale	61,363,000		61,363,000		54,413,000
Proceeds from sales of loans held for sale			907,306,000	$ 836,133,000
Directors, executive officers, principal shareholders and affiliates
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Loans outstanding to related parties	21,500,000		21,500,000		39,200,000
New loans to related parties and other additions	468,000		10,600,000
Repayments from related parties and other reductions	2,200,000		28,500,000
Commercial loan portfolio
Summary of loans
Total loans	1,665,267,000		1,665,267,000		1,526,623,000
Commercial loan portfolio \| Commercial
Summary of loans
Total loans	545,069,000		545,069,000		499,573,000
Commercial loan portfolio \| Commercial real estate
Summary of loans
Total loans	956,298,000		956,298,000		876,784,000
Commercial loan portfolio \| Construction and land development
Summary of loans
Total loans	163,900,000		$ 163,900,000		150,266,000
Other loan portfolio \| Maximum
Loans, additional information
Term of lease			4 years
Other loan portfolio \| Residential real estate
Summary of loans
Total loans	216,935,000		$ 216,935,000		163,224,000
Other loan portfolio \| Consumer
Summary of loans
Total loans	248,131,000		248,131,000		161,512,000
Other loan portfolio \| Lease financing
Summary of loans
Total loans	182,445,000		182,445,000		144,230,000
Commercial and Residential Loan
Loans, additional information
Loans held for sale	61,400,000		61,400,000		$ 54,400,000
Proceeds from sales of loans held for sale	$ 450,900,000	$ 299,700,000	$ 907,300,000	$ 836,100,000

LOANS - Risk category (Details) $ in Thousands	9 Months Ended
LOANS - Risk category (Details) $ in Thousands	Sep. 30, 2016 USD ($) region	Dec. 31, 2015 USD ($)
Risk category
Number of main regions \| region	4
Total loans	$ 2,312,778	$ 1,995,589
Commercial loan portfolio
Risk category
Total loans	1,665,267	1,526,623
Non-PCI loans
Risk category
Total loans	2,283,354	1,957,112
Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	1,642,706	1,496,396
Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	1,576,189	1,424,957
Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	14,704	40,866
Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	33,038	11,551
Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	12,071	14,546
Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	6,704	4,476
Non-PCI loans \| Other loan portfolio
Risk category
Total loans	640,648	460,716
Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	635,253	456,112
Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	5,395	4,604
Commercial \| Commercial loan portfolio
Risk category
Total loans	545,069	499,573
Commercial \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	541,452	493,445
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	518,512	467,355
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	5,293	16,589
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	11,516	3,448
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	5,520	5,702
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	611	351
Commercial real estate \| Commercial loan portfolio
Risk category
Total loans	956,298	876,784
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	948,831	862,744
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	910,187	821,314
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	9,411	23,737
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	21,072	8,103
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	6,551	8,844
Commercial real estate \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	1,610	746
Construction and land development \| Commercial loan portfolio
Risk category
Total loans	163,900	150,266
Construction and land development \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	152,423	140,207
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	147,490	136,288
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans		540
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	450
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	4,483	3,379
Residential real estate \| Other loan portfolio
Risk category
Total loans	216,935	163,224
Residential real estate \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	210,367	155,266
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	205,901	151,111
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	4,466	4,155
Consumer \| Other loan portfolio
Risk category
Total loans	248,131	161,512
Consumer \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	247,836	161,220
Consumer \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	247,634	161,169
Consumer \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	202	51
Lease financing \| Other loan portfolio
Risk category
Total loans	182,445	144,230
Lease financing \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	182,445	144,230
Lease financing \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	181,718	143,832
Lease financing \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	$ 727	$ 398

LOANS - Impaired Loans (Details) - USD ($)	3 Months Ended		9 Months Ended
LOANS - Impaired Loans (Details) - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	243,000	172,000	484,000	741,000
Recognized interest income on loans modified under troubled debt restructurings	90,000	$ 104,000	196,000	$ 316,000
Non-PCI loans
Summay of impaired loans
Nonaccrual loans	16,958,000		16,958,000		$ 18,462,000
Loans modified under troubled debt restructuring	17,983,000		17,983,000		11,042,000
Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	16,958,000		16,958,000		18,462,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	456,000		456,000		1,142,000
Loans modified under troubled debt restructuring	12,512,000		12,512,000		5,287,000
Total impaired loans	29,926,000		29,926,000		24,891,000
PCI loans
Summay of impaired loans
Total impaired loans	29,400,000		29,400,000		38,500,000
Commercial \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	5,520,000		5,520,000		5,702,000
Loans modified under troubled debt restructuring	682,000		682,000		43,000
Commercial \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	5,520,000		5,520,000		5,702,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	351,000		351,000		865,000
Loans modified under troubled debt restructuring	648,000		648,000		3,000
Total impaired loans	6,519,000		6,519,000		6,570,000
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	6,551,000		6,551,000		8,844,000
Loans modified under troubled debt restructuring	16,499,000		16,499,000		10,205,000
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	6,551,000		6,551,000		8,844,000
Loans modified under troubled debt restructuring	11,397,000		11,397,000		4,873,000
Total impaired loans	17,948,000		17,948,000		13,717,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Loans modified under troubled debt restructuring	64,000		64,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Loans modified under troubled debt restructuring	64,000		64,000
Total impaired loans	64,000		64,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	4,063,000		4,063,000		3,516,000
Loans modified under troubled debt restructuring	738,000		738,000		794,000
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	4,063,000		4,063,000		3,516,000
Accruing loans contractually past due 90 days or more as to interest or principal payments					228,000
Loans modified under troubled debt restructuring	403,000		403,000		411,000
Total impaired loans	4,466,000		4,466,000		4,155,000
Consumer \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	97,000		97,000		2,000
Consumer \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	97,000		97,000		2,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	105,000		105,000		49,000
Total impaired loans	202,000		202,000		51,000
Lease financing \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	727,000		727,000		398,000
Lease financing \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	727,000		727,000		398,000
Total impaired loans	$ 727,000		$ 727,000		$ 398,000

LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Impaired loans (excluding PCI loans) by portfolio
Difference between the recorded investment and unpaid principal balance	$ 4,600		$ 4,600		$ 5,200
Impaired \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	12,316		12,316		18,641
With a valuation allowance, Unpaid Principal Balance	16,358		16,358		22,523
With a valuation allowance, Average Annual Recorded Investment	12,660	$ 23,254	14,533	$ 25,214
With a related valuation allowance, Interest Income Recognized while on Impaired Status	104	116	169	265
With no related valuation allowance, Recorded Investment	17,610		17,610		6,250
With no related valuation allowance, Unpaid Principal Balance	18,136		18,136		7,610
With no related valuation allowance, Average Annual Recorded Investment	17,481	6,390	17,510	7,334
With no related valuation allowance, Interest Income Recognized while on Impaired Status	3	3	60	90
Total impaired loans	29,926		29,926		24,891
Total, Unpaid Principal Balance	34,494		34,494		30,133
Total, Related Valuation Allowance	2,786		2,786		2,994
Total, Average Annual Recorded Investment	30,141	29,644	32,043	32,548
Total, Interest Income Recognized While on Impaired Status	107	119	229	355
Commercial \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	6,119		6,119		5,789
With a valuation allowance, Unpaid Principal Balance	9,448		9,448		8,760
With a valuation allowance, Average Annual Recorded Investment	6,426	10,972	8,115	12,435
With a related valuation allowance, Interest Income Recognized while on Impaired Status	23	3	24	6
With no related valuation allowance, Recorded Investment	400		400		781
With no related valuation allowance, Unpaid Principal Balance	445		445		781
With no related valuation allowance, Average Annual Recorded Investment	439	383	313	663
With no related valuation allowance, Interest Income Recognized while on Impaired Status	2		1
Total impaired loans	6,519		6,519		6,570
Total, Unpaid Principal Balance	9,893		9,893		9,541
Total, Related Valuation Allowance	1,962		1,962		1,797
Total, Average Annual Recorded Investment	6,865	11,355	8,428	13,098
Total, Interest Income Recognized While on Impaired Status	25	3	25	6
Commercial real estate \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	2,067		2,067		9,197
With a valuation allowance, Unpaid Principal Balance	2,256		2,256		9,489
With a valuation allowance, Average Annual Recorded Investment	2,170	9,475	2,273	9,897
With a related valuation allowance, Interest Income Recognized while on Impaired Status	65	101	115	234
With no related valuation allowance, Recorded Investment	15,881		15,881		4,520
With no related valuation allowance, Unpaid Principal Balance	16,107		16,107		5,840
With no related valuation allowance, Average Annual Recorded Investment	15,610	4,632	15,742	4,970
With no related valuation allowance, Interest Income Recognized while on Impaired Status			56	76
Total impaired loans	17,948		17,948		13,717
Total, Unpaid Principal Balance	18,363		18,363		15,329
Total, Related Valuation Allowance	145		145		514
Total, Average Annual Recorded Investment	17,780	14,107	18,015	14,867
Total, Interest Income Recognized While on Impaired Status	65	101	171	310
Construction and land development \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	64		64
With a valuation allowance, Unpaid Principal Balance	64		64		26
With a valuation allowance, Average Annual Recorded Investment	65	9	66	35
With a related valuation allowance, Interest Income Recognized while on Impaired Status	3		6
With no related valuation allowance, Average Annual Recorded Investment				18
Total impaired loans	64		64
Total, Unpaid Principal Balance	64		64		26
Total, Related Valuation Allowance	6		6
Total, Average Annual Recorded Investment	65	9	66	53
Total, Interest Income Recognized While on Impaired Status	3		6
Residential real estate \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	3,137		3,137		3,206
With a valuation allowance, Unpaid Principal Balance	3,750		3,750		3,798
With a valuation allowance, Average Annual Recorded Investment	3,157	2,114	3,234	2,163
With a related valuation allowance, Interest Income Recognized while on Impaired Status	13	12	24	25
With no related valuation allowance, Recorded Investment	1,329		1,329		949
With no related valuation allowance, Unpaid Principal Balance	1,493		1,493		989
With no related valuation allowance, Average Annual Recorded Investment	1,341	1,364	1,364	1,641
With no related valuation allowance, Interest Income Recognized while on Impaired Status	1	3	3	6
Total impaired loans	4,466		4,466		4,155
Total, Unpaid Principal Balance	5,243		5,243		4,787
Total, Related Valuation Allowance	567		567		626
Total, Average Annual Recorded Investment	4,498	3,478	4,598	3,804
Total, Interest Income Recognized While on Impaired Status	14	15	27	31
Consumer \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	202		202		51
With a valuation allowance, Unpaid Principal Balance	113		113		52
With a valuation allowance, Average Annual Recorded Investment	115	35	118	35
With no related valuation allowance, Unpaid Principal Balance	91		91
With no related valuation allowance, Average Annual Recorded Investment	91	11	91	42
With no related valuation allowance, Interest Income Recognized while on Impaired Status				8
Total impaired loans	202		202		51
Total, Unpaid Principal Balance	204		204		52
Total, Related Valuation Allowance	37		37		7
Total, Average Annual Recorded Investment	206	46	209	77
Total, Interest Income Recognized While on Impaired Status				8
Lease financing \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	727		727		398
With a valuation allowance, Unpaid Principal Balance	727		727		398
With a valuation allowance, Average Annual Recorded Investment	727	649	727	649
Total impaired loans	727		727		398
Total, Unpaid Principal Balance	727		727		398
Total, Related Valuation Allowance	69		69		$ 50
Total, Average Annual Recorded Investment	$ 727	$ 649	$ 727	$ 649

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Aging Status of recorded investment
Total loans	$ 2,312,778	$ 1,995,589
Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	16,958	18,462
Total Past Due	27,732	29,724
Current	2,255,622	1,927,388
Total loans	2,283,354	1,957,112
Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	5,498	5,124
Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	4,820	4,996
Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	456	1,142
Commercial loan portfolio
Aging Status of recorded investment
Total loans	1,665,267	1,526,623
Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Total loans	1,642,706	1,496,396
Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Total loans	640,648	460,716
Commercial \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	545,069	499,573
Commercial \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	5,520	5,702
Total Past Due	11,824	10,774
Current	529,628	482,671
Total loans	541,452	493,445
Commercial \| Commercial loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	2,974	1,911
Commercial \| Commercial loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	2,979	2,296
Commercial \| Commercial loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	351	865
Commercial real estate \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	956,298	876,784
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	6,551	8,844
Total Past Due	7,822	11,121
Current	941,009	851,623
Total loans	948,831	862,744
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	768	288
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	503	1,989
Construction and land development \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	163,900	150,266
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Total Past Due	22	340
Current	152,401	139,867
Total loans	152,423	140,207
Construction and land development \| Commercial loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due		340
Construction and land development \| Commercial loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	22
Residential real estate \| Other loan portfolio
Aging Status of recorded investment
Total loans	216,935	163,224
Residential real estate \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	4,063	3,516
Total Past Due	5,747	6,165
Current	204,620	149,101
Total loans	210,367	155,266
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	782	1,983
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	902	438
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due		228
Consumer \| Other loan portfolio
Aging Status of recorded investment
Total loans	248,131	161,512
Consumer \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	97	2
Total Past Due	1,568	889
Current	246,268	160,331
Total loans	247,836	161,220
Consumer \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	952	565
Consumer \| Other loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	414	273
Consumer \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	105	49
Lease financing \| Other loan portfolio
Aging Status of recorded investment
Total loans	182,445	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	727	398
Total Past Due	749	435
Current	181,696	143,795
Total loans	182,445	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	$ 22	$ 37

LOANS - TDRs by portfolio (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
TDRs by portfolio
TDRs, individually impaired for impairment	$ 27,179,000	$ 22,528,000
Allowance for loan losses on TDRs	191,000	109,000
Unfunded commitments	164,000
Minimum \| Performing
TDRs by portfolio
TDRs, individually impaired for impairment	50,000
Non-PCI loans
TDRs by portfolio
TDR's Accruing	12,512,000	5,287,000
TDR's Nonaccrual	5,471,000	5,755,000
Total	17,983,000	11,042,000
Commercial \| Commercial loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	6,423,000	6,316,000
Commercial \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	648,000	3,000
TDR's Nonaccrual	34,000	40,000
Total	682,000	43,000
Commercial real estate \| Commercial loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	17,728,000	13,434,000
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	11,397,000	4,873,000
TDR's Nonaccrual	5,102,000	5,332,000
Total	16,499,000	10,205,000
Construction and land development \| Commercial loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	64,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	64,000
Total	64,000
Residential real estate \| Other loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	2,752,000	2,778,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	403,000	411,000
TDR's Nonaccrual	335,000	383,000
Total	738,000	$ 794,000
Consumer \| Other loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	14,000
Lease financing \| Other loan portfolio
TDRs by portfolio
TDRs, individually impaired for impairment	$ 198,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2016 USD ($)	Jun. 30, 2016 loan	Sep. 30, 2015 USD ($)	Jun. 30, 2015 loan	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan		2		1	5	1
Pre-modification outstanding balance	$ 10,207		$ 42		$ 10,892	$ 42
Post-modification outstanding balance	10,207		42		$ 10,854	$ 42
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan						1
Recorded balance						$ 71
Commercial \| Commercial loan portfolio
Troubled debt restructurings:
Number of loans \| loan				1	3	1
Pre-modification outstanding balance			42		$ 685	$ 42
Post-modification outstanding balance			$ 42		$ 647	$ 42
Commercial real estate \| Commercial loan portfolio
Troubled debt restructurings:
Number of loans \| loan		2			2
Pre-modification outstanding balance	10,207				$ 10,207
Post-modification outstanding balance	$ 10,207				$ 10,207
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan						1
Recorded balance						$ 71

LOANS - Allowance for loan losses and recorded investment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Changes in allowance for loan losses :
Beginning balance	$ 14,752,000	$ 16,206,000	$ 15,988,000	$ 12,300,000
Provision for loan losses	1,392,000	6,699,000	3,146,000	10,075,000
Charge-offs	(864,000)	(7,949,000)	(4,286,000)	(8,945,000)
Recoveries	279,000	201,000	711,000	1,727,000
Net loan charge-offs	(585,000)	(7,748,000)	(3,575,000)	(7,218,000)
Ending balance	15,559,000	15,157,000	15,559,000	15,157,000
Non-PCI loans
Changes in allowance for loan losses :
Beginning balance	13,629,000	14,464,000	14,093,000	10,504,000
Provision for loan losses	1,156,000	6,681,000	3,752,000	10,163,000
Charge-offs	(806,000)	(7,930,000)	(4,228,000)	(8,914,000)
Recoveries	250,000	172,000	612,000	1,634,000
Net loan charge-offs	(556,000)	(7,758,000)	(3,616,000)	(7,280,000)
Ending balance	14,229,000	13,387,000	14,229,000	13,387,000
Non-PCI loans \| Nonpeforming, one borrower
Changes in allowance for loan losses :
Charge-offs			(1,600,000)
Non-PCI loans \| Nonpeforming, single credit relationship borrower
Changes in allowance for loan losses :
Charge-offs			(530,000)
PCI loans
Changes in allowance for loan losses :
Beginning balance	1,123,000	1,742,000	1,895,000	1,796,000
Provision for loan losses	236,000	18,000	(606,000)	(88,000)
Charge-offs	(58,000)	(19,000)	(58,000)	(31,000)
Recoveries	29,000	29,000	99,000	93,000
Net loan charge-offs	(29,000)	10,000	41,000	62,000
Ending balance	$ 1,330,000	$ 1,770,000	$ 1,330,000	$ 1,770,000

LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Dec. 31, 2015
Changes in allowance for loan losses :
Beginning balance	$ 14,752	$ 16,206	$ 15,988	$ 12,300
Provision for loan losses	1,392	6,699	3,146	10,075
Charge-offs	(864)	(7,949)	(4,286)	(8,945)
Recoveries	279	201	711	1,727
Ending balance	15,559	15,157	15,559	15,157
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					$ 2,452	$ 2,696
Loans collectively evaluated for impairment					334	298
Non-impaired loans collectively evaluated for impairment					11,443	11,099
Total	14,752	16,206	15,988	12,300	15,559	15,988
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					27,179	22,528
Impaired loans collectively evaluated for impairment					2,747	2,363
Non-impaired loans collectively evaluated for impairment					2,253,428	1,932,221
Total loans					2,312,778	1,995,589
Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans					1,665,267	1,526,623
Commercial \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance	6,186	5,488	6,917	2,284
Provision for loan losses	1,216	7,294	2,619	9,514
Charge-offs	(251)	(7,486)	(2,513)	(7,587)
Recoveries	36	56	164	1,141
Ending balance	7,187	5,352	7,187	5,352
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					1,950	1,765
Loans collectively evaluated for impairment					12	32
Non-impaired loans collectively evaluated for impairment					4,569	4,745
Total	6,186	5,488	6,917	2,284	7,187	6,917
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					6,423	6,316
Impaired loans collectively evaluated for impairment					96	254
Non-impaired loans collectively evaluated for impairment					534,933	486,875
Total loans					545,069	499,573
Commercial real estate \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance	3,511	7,657	5,179	6,925
Provision for loan losses	(12)	(2,097)	(1,520)	(1,316)
Charge-offs	(214)	(12)	(461)	(307)
Recoveries	129	57	216	303
Ending balance	3,414	5,605	3,414	5,605
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					118	479
Loans collectively evaluated for impairment					27	35
Non-impaired loans collectively evaluated for impairment					3,041	3,662
Total	3,511	7,657	5,179	6,925	3,414	5,179
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					17,728	13,434
Impaired loans collectively evaluated for impairment					220	283
Non-impaired loans collectively evaluated for impairment					930,883	849,027
Total loans					956,298	876,784
Construction and land development \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance	569	435	435	486
Provision for loan losses	(271)	48	(154)	(4)
Charge-offs	(1)	(23)	(1)	(39)
Recoveries	13	8	30	25
Ending balance	310	468	310	468
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					6
Non-impaired loans collectively evaluated for impairment					304	419
Total	569	435	435	486	310	435
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					64
Non-impaired loans collectively evaluated for impairment					152,359	140,207
Total loans					163,900	150,266
Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	2,584	1,883	2,120	2,038
Provision for loan losses	220	799	886	922
Charge-offs	(153)	(318)	(454)	(665)
Recoveries	32	52	131	121
Ending balance	2,683	2,416	2,683	2,416
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					359	452
Loans collectively evaluated for impairment					207	174
Non-impaired loans collectively evaluated for impairment					1,694	1,000
Total	2,584	1,883	2,120	2,038	2,683	2,120
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					2,752	2,778
Impaired loans collectively evaluated for impairment					1,714	1,377
Non-impaired loans collectively evaluated for impairment					205,901	151,111
Total loans					216,935	163,224
Consumer \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	827	611	749	567
Provision for loan losses	326	282	479	386
Charge-offs	(91)	(110)	(225)	(237)
Recoveries	20	25	79	92
Ending balance	1,082	808	1,082	808
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					14
Loans collectively evaluated for impairment					23	7
Non-impaired loans collectively evaluated for impairment					1,022	735
Total	827	611	749	567	1,082	749
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					14
Impaired loans collectively evaluated for impairment					188	51
Non-impaired loans collectively evaluated for impairment					247,634	161,169
Total loans					248,131	161,512
Lease financing \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance	1,075	132	588
Provision for loan losses	(87)	373	836	573
Charge-offs	(154)		(632)	(110)
Recoveries	49	3	91	45
Ending balance	883	508	883	508
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment					5
Loans collectively evaluated for impairment					65	50
Non-impaired loans collectively evaluated for impairment					813	538
Total	1,075	132	588	508	883	588
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment					198
Impaired loans collectively evaluated for impairment					529	398
Non-impaired loans collectively evaluated for impairment					181,718	143,832
Total loans					182,445	144,230
PCI loans
Changes in allowance for loan losses :
Beginning balance	1,123	1,742	1,895	1,796
Provision for loan losses	236	18	(606)	(88)
Charge-offs	(58)	(19)	(58)	(31)
Recoveries	29	29	99	93
Ending balance	1,330	1,770	1,330	1,770
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	1,123	$ 1,742	1,895	$ 1,796	1,330	1,895
Recorded investment (loan balance) at December 31, 2014:
Total loans					29,424	38,477
PCI loans \| Commercial \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance			375
Ending balance	656		656
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	656		375		656	375
Recorded investment (loan balance) at December 31, 2014:
Total loans					3,617	6,128
PCI loans \| Commercial real estate \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance			1,003
Ending balance	228		228
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	228		1,003		228	1,003
Recorded investment (loan balance) at December 31, 2014:
Total loans					7,467	14,040
PCI loans \| Construction and land development \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance			16
Allowance for loan losses balance at December 31, 2014 attributable to:
Total			16			16
Recorded investment (loan balance) at December 31, 2014:
Total loans					11,477	10,059
PCI loans \| Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance			494
Ending balance	423		423
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	423		494		423	494
Recorded investment (loan balance) at December 31, 2014:
Total loans					6,568	7,958
PCI loans \| Consumer \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance			7
Ending balance	23		23
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	$ 23		$ 7		23	7
Recorded investment (loan balance) at December 31, 2014:
Total loans					$ 295	$ 292

LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - PCI loans - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Changes in the accretable yield for PCI loans
Balance at beginning of period	$ 6,729	$ 14,237	$ 10,526	$ 16,198
Accretion	(1,810)	(1,006)	(7,066)	(3,013)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)	179		(96)	67
Reclassification from (to) non-accretable	2,568	325	4,302	304
Balance at end of period	$ 7,666	$ 13,556	$ 7,666	$ 13,556

LOANS - Covered and noncovered loans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Covered and noncovered loans
Covered loans	$ 786	$ 3,629
Non-covered loans	2,311,992	1,991,960
Total loans	2,312,778	1,995,589
Non-PCI loans
Covered and noncovered loans
Covered loans	688	1,969
Non-covered loans	2,282,666	1,955,143
Total loans	2,283,354	1,957,112
PCI loans
Covered and noncovered loans
Covered loans	98	1,660
Non-covered loans	29,326	36,817
Total loans	29,424	38,477
Customer outstanding balances	37,100	44,500
Commercial loan portfolio
Covered and noncovered loans
Total loans	1,665,267	1,526,623
Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Total loans	1,642,706	1,496,396
Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Total loans	640,648	460,716
Commercial \| Commercial loan portfolio
Covered and noncovered loans
Covered loans		1,445
Non-covered loans	545,069	498,128
Total loans	545,069	499,573
Commercial \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans		378
Non-covered loans	541,452	493,067
Total loans	541,452	493,445
Commercial \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans		1,067
Non-covered loans	3,617	5,061
Total loans	3,617	6,128
Commercial real estate \| Commercial loan portfolio
Covered and noncovered loans
Covered loans		1,194
Non-covered loans	956,298	875,590
Total loans	956,298	876,784
Commercial real estate \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans		876
Non-covered loans	948,831	861,868
Total loans	948,831	862,744
Commercial real estate \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans		318
Non-covered loans	7,467	13,722
Total loans	7,467	14,040
Construction and land development \| Commercial loan portfolio
Covered and noncovered loans
Non-covered loans	163,900	150,266
Total loans	163,900	150,266
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	152,423	140,207
Total loans	152,423	140,207
Construction and land development \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Non-covered loans	11,477	10,059
Total loans	11,477	10,059
Residential real estate \| Other loan portfolio
Covered and noncovered loans
Covered loans	786	990
Non-covered loans	216,149	162,234
Total loans	216,935	163,224
Residential real estate \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans	688	715
Non-covered loans	209,679	154,551
Total loans	210,367	155,266
Residential real estate \| Other loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans	98	275
Non-covered loans	6,470	7,683
Total loans	6,568	7,958
Consumer \| Other loan portfolio
Covered and noncovered loans
Non-covered loans	248,131	161,512
Total loans	248,131	161,512
Consumer \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	247,836	161,220
Total loans	247,836	161,220
Consumer \| Other loan portfolio \| PCI loans
Covered and noncovered loans
Non-covered loans	295	292
Total loans	295	292
Lease financing \| Other loan portfolio
Covered and noncovered loans
Non-covered loans	182,445	144,230
Total loans	182,445	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	182,445	144,230
Total loans	$ 182,445	$ 144,230

MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Servicing Assets at Fair Value [Line Items]
Loans serviced for others	$ 5,628,023	$ 5,475,804
Commercial
Servicing Assets at Fair Value [Line Items]
Loans serviced for others	3,806,872	3,649,524
Residential mortgage loans
Servicing Assets at Fair Value [Line Items]
Loans serviced for others	$ 1,821,151	$ 1,826,280

MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Mortgage servicing rights:
Balance at beginning of period	$ 68,395	$ 64,921	$ 67,218	$ 62,900
Balance at end of period	71,349	66,212	71,349	66,212
Valuation allowances – residential mortgage loans:
Balance at beginning of period	5,587		567	119
Additions	1,073	795	6,301	1,630
Reductions			(208)	(954)
Balance at end of period	6,660	795	6,660	795
Mortgage servicing rights, net	64,689	65,417	64,689	65,417
Fair Value	64,689	66,074	64,689	66,074	$ 62,960	$ 66,700	$ 66,442	$ 62,781
Commercial
Mortgage servicing rights:
Servicing rights capitalized	3,506	1,411	5,777	2,866
Amortization	(592)	(552)	(1,741)	(1,708)
Residential mortgage loans
Mortgage servicing rights:
Servicing rights capitalized	1,125	1,105	2,764	4,185
Amortization	$ (1,085)	$ (673)	$ (2,669)	$ (2,031)

MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Commercial
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.13%	0.12%
Interest Rate	3.75%	3.85%
Remaining Years to Maturity	30 years 3 months 18 days	30 years 7 months 6 days
Prepayment Rate	8.33%	8.53%
Servicing Cost	1000.00%	1000.00%
Commercial \| Maximum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	13.00%	13.00%
Commercial \| Minimum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	10.00%	10.00%
Residential mortgage loans
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.27%	0.27%
Interest Rate	3.93%	3.96%
Remaining Years to Maturity	24 years 2 months 12 days	24 years 4 months 24 days
Prepayment Rate	18.42%	11.22%
Servicing Cost	73.46%	73.66%
Residential mortgage loans \| Maximum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	11.00%	11.00%
Residential mortgage loans \| Minimum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	9.00%	9.00%

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
GOODWILL AND INTANGIBLE ASSETS
Goodwill	$ 46,519	$ 46,519

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Finite-lived intangible assets
Gross Carrying Amount	$ 23,683,000		$ 23,683,000		$ 23,683,000
Accumulated Amortization	(18,292,000)		(18,292,000)		(16,679,000)
Total	5,391,000		5,391,000		7,004,000
Amortization of intangible assets	514,000	$ 597,000	1,613,000	$ 1,863,000
Estimated amortization expense of intangible assets
Total	5,391,000		5,391,000		7,004,000
Core deposits
Finite-lived intangible assets
Gross Carrying Amount	20,542,000		20,542,000		20,542,000
Accumulated Amortization	(15,770,000)		(15,770,000)		(14,471,000)
Total	4,772,000		4,772,000		6,071,000
Estimated amortization expense of intangible assets
Total	4,772,000		4,772,000		6,071,000
Customer relationship
Finite-lived intangible assets
Gross Carrying Amount	3,141,000		3,141,000		3,141,000
Accumulated Amortization	(2,522,000)		(2,522,000)		(2,208,000)
Total	619,000		619,000		933,000
Estimated amortization expense of intangible assets
Total	$ 619,000		$ 619,000		$ 933,000

DERIVATIVE INSTRUMENTS (Details) - USD ($)	3 Months Ended		9 Months Ended
DERIVATIVE INSTRUMENTS (Details) - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Net gains recognized on derivative instruments	$ (5,200,000)	$ 272,000	$ 527,000	$ 6,300,000
Interest rate lock commitments
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	294,010,000		294,010,000			$ 257,023,000
Fair value of asset derivatives	$ 6,798,000		$ 6,798,000			6,029,000
Forward commitments to sell mortgage-backed securities
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, liability derivatives					$ 323,103,000	278,313,000
Fair value of liability derivatives					$ 244,000	$ 2,000

DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($)	1 Months Ended	9 Months Ended
	Aug. 31, 2011	Sep. 30, 2016	Dec. 31, 2015	Aug. 15, 2012
Three-month LIBOR
Derivative disclosures
Variable interest rate (as a percent)		4.35%
Interest rate swap agreements
Derivative disclosures
Notional amount of interest rate swaps				$ 10,000,000
Fixed interest (as a percent)	4.66%
Fair value of interest rate swaps		$ 32,000	$ 126,000
Interest rate swap agreements \| Three-month LIBOR
Derivative disclosures
Variable interest rate (as a percent)	2.75%

DEPOSITS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Classification of deposits
Non-interest bearing demand	$ 629,113	$ 543,401
Interest bearing:
NOW	658,021	621,925
Money market	366,193	377,654
Savings	162,742	155,778
Time	603,963	668,890
Total deposits	$ 2,420,032	$ 2,367,648

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Short-term borrowings
Outstanding at period-end	$ 138,289	$ 107,538
Average amount outstanding	123,191	123,447
Maximum amount outstanding at any month end	$ 138,289	$ 147,542
Weighted average interest rate:
During period	0.24%	0.19%
End of period	0.23%	0.21%
Federal funds lines of credit	$ 68,000
Investment securites pledged/collateralized for secured borrowings	145,700	$ 113,400
Line of credit	39,600	62,100
Commercial real estate
Weighted average interest rate:
Investment securites pledged/collateralized for secured borrowings	$ 47,600	$ 76,700

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings	$ 237,543	$ 40,178
Federal Hom Loan Bank Advances, Interest Rate Information
FHLB advances, collateral for mortgage and home equity line of credit loans	1,150,000	987,400
FHLB advances – fixed rate, fixed term, at rates averaging 0.96% and 0.93%, maturing through May 2023
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings	$ 237,500	$ 40,000
Federal Hom Loan Bank Advances, Interest Rate Information
Federal Home Loan Bank advances average interest rate	0.66%	0.93%
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings	$ 43	$ 178
Federal Hom Loan Bank Advances, Interest Rate Information
Federal Home Loan Bank advances, interest rate	1.70%

SUBORDINATED DEBT (Details) $ / shares in Units, $ in Thousands			1 Months Ended	9 Months Ended
	Jun. 28, 2016 USD ($)	Mar. 26, 2013 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) tranche	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jan. 02, 2013 USD ($)
Subordinated Borrowing [Line Items]
Carrying amount				$ 54,484		$ 61,859
Duration with fixed interest rate				5 years
Number of tranches \| tranche			2
Investment face amount							$ 10,000
Common stock				$ 154		118	2,000
Term of warrant		8 years
Number of securities called by warrants \| shares		125,000
Exercise price \| $ / shares		$ 16.00
Warrants outstanding		$ 600
Repayments of Subordinated Debt				$ 8,000
Other non interest expense
Subordinated Borrowing [Line Items]
Discount	$ 500
Three-month LIBOR
Subordinated Borrowing [Line Items]
Variable interest rate (as a percent)				4.35%
Subordinate debt
Subordinated Borrowing [Line Items]
Face amount							$ 8,000
Debt issuance cost			$ 900
Repayments of Subordinated Debt	$ 8,000
Discount		$ 600
Subordinate debt \| Private Placement [Member]
Subordinated Borrowing [Line Items]
Face amount			$ 55,300
Subordinate debt, $8,000 maturing June 28, 2021
Subordinated Borrowing [Line Items]
Fixed interest rate				8.25%
Face amount				$ 8,000
Carrying amount						7,448
Subordinate debt, $40,325 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.00%
Face amount				$ 40,325	$ 40,325
Carrying amount				$ 39,712		39,659
Subordinate debt, $15,000 maturing June 18, 2025
Subordinated Borrowing [Line Items]
Fixed interest rate				6.50%
Face amount				$ 15,000
Carrying amount				$ 14,772		$ 14,752

TRUST PREFERRED DEBNTURES (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 37,316	$ 37,057
Trust preferred debentures maturing January 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 1,980	$ 1,932
Trust preferred debentures maturing January 23, 2034 \| Grant Park Trust
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	2.85%
Interest rate (as a percent)	3.61%	3.17%
Face amount	$ 3,000	$ 3,000
Trust preferred debentures maturing April 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 9,956	$ 9,954
Trust preferred debentures maturing April 23, 2034 \| Midland Trust
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	2.75%
Interest rate (as a percent)	3.46%	3.07%
Face amount	$ 10,000	$ 10,000
Trust preferred debentures maturing December 31, 2036
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 13,105	$ 13,001
Trust preferred debentures maturing December 31, 2036 \| LSHC Trust III
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	1.75%
Interest rate (as a percent)	2.60%	2.26%
Face amount	$ 20,000	$ 20,000
Trust preferred debentures maturing September 6, 2037
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 12,275	$ 12,170
Trust preferred debentures maturing September 6, 2037 \| LSHC Trust IV
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	1.47%
Interest rate (as a percent)	2.31%	1.92%
Face amount	$ 20,000	$ 20,000

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
EARNINGS PER SHARE
Net income	$ 8,051	$ 3,445	$ 19,959	$ 16,629
Common shareholder dividends	(2,773)	(1,881)	(7,022)	(5,643)
Unvested restricted stock award dividends	(12)	(12)	(35)	(37)
Undistributed earnings to unvested restricted stock awards	(26)	(10)	(69)	(71)
Undistributed earnings to common shareholders	5,240	1,542	12,833	10,878
Basic
Distributed earnings to common shareholders	2,773	1,881	7,022	5,643
Undistributed earnings to common shareholders	5,240	1,542	12,833	10,878
Net income attributable to Midland States Bancorp, Inc.	8,013	3,423	19,855	16,521
Diluted
Distributed earnings to common shareholders	2,773	1,881	7,022	5,643
Undistributed earnings to common shareholders	5,240	1,542	12,833	10,878
Net income attributable to Midland States Bancorp, Inc.	8,013	3,423	19,855	16,521
Add back:
Undistributed earnings reallocated from unvested restricted stock awards			1	1
Total common shareholders earnings, diluted	$ 8,013	$ 3,423	$ 19,856	$ 16,522
Weighted average common shares outstanding, basic (In shares)	15,578,703	11,911,414	13,637,997	11,895,337
Options and warrants	279,570	219,115	264,667	216,358
Weighted average common shares outstanding, diluted (In shares)	15,858,273	12,130,529	13,902,664	12,111,695
Basic earnings per common share (In dollars per share)	$ 0.51	$ 0.29	$ 1.46	$ 1.39
Diluted earnings per common share (In dollars per share)	$ 0.51	$ 0.28	$ 1.43	$ 1.36

CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Actual Amount	$ 366,333	$ 288,958
Total Capital (to Risk Weighted Assets): Actual Ratio	13.53%	11.82%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 216,588	$ 195,550
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	8.00%	8.00%
Tier I Capital (to Risk Weighted Assets): Actual Amount	$ 296,148	$ 210,614
Tier I Capital (to Risk Weighted Assets): Actual Ratio	10.94%	8.62%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 162,441	$ 146,662
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	6.00%	6.00%
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount	$ 244,378	$ 158,969
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio	9.03%	6.50%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount	$ 121,831	$ 109,997
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio	4.50%	4.50%
Tier I Capital (to Average Assets): Actual Amount	$ 296,148	$ 210,614
Tier I Capital (to Average Assets): Actual Ratio	9.82%	7.49%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount	$ 120,688	$ 112,500
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio	4.00%	4.00%
Midland States Bank
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Actual Amount	$ 317,823	$ 270,436
Total Capital (to Risk Weighted Assets): Actual Ratio	11.72%	11.06%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 216,957	$ 195,702
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	8.00%	8.00%
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements	$ 271,196	$ 244,628
Total Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements	10.00%	10.00%
Tier I Capital (to Risk Weighted Assets): Actual Amount	$ 302,122	$ 254,228
Tier I Capital (to Risk Weighted Assets): Actual Ratio	11.14%	10.39%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 162,718	$ 146,777
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Ratio	6.00%	6.00%
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements	$ 216,957	$ 195,702
Tier I Capital (to Risk Weighted Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements	8.00%	8.00%
Common equity Tier 1 capital (to risk-weighted assets): Actual Amount	$ 302,122	$ 254,228
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio	11.14%	10.39%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount	$ 122,038	$ 110,082
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Ratio	4.50%	4.50%
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements	$ 176,277	$ 159,008
Common equity Tier 1 capital (to risk-weighted assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements	6.50%	6.50%
Tier I Capital (to Average Assets): Actual Amount	$ 302,122	$ 254,228
Tier I Capital (to Average Assets): Actual Ratio	10.00%	9.01%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount	$ 120,794	$ 112,827
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio	4.00%	4.00%
Tier I Capital (to Average Assets): Required to be Well Capitalized Amount Under Prompt Corrective Action Requirements	$ 150,993	$ 141,034
Tier I Capital (to Average Assets): Required to be Well Capitalized Ratio Under Prompt Corrective Action Requirements	5.00%	5.00%

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Assets
Securities available for sale:	$ 252,212,000		$ 252,212,000		$ 236,627,000
Liabilities
Impaired loans	144,000	$ 1,755,000	310,000	$ 1,755,000
Other real estate owned	4,000		219,000	49,000
Total loss on assets measured on a nonrecurring basis	148,000	1,755,000	529,000	1,804,000
Non-agency mortgage-backed securities
Assets
Securities available for sale:	2,000		2,000
Covered non-agency mortgage-backed securities
Assets
Securities available for sale:		$ 55,900,000		$ 55,900,000
Corporate securities
Assets
Securities available for sale:	6,700,000		6,700,000
Level 1
Assets
Securities available for sale:	35,506,000		35,506,000		48,302,000
Level 2
Assets
Securities available for sale:	209,225,000		209,225,000		188,325,000
Loans held for sale	61,363,000		61,363,000		54,413,000
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Level 2 \| Interest rate swap agreements
Liabilities
Derivative liability	32,000		32,000		126,000
Level 2 \| Forward commitments to sell mortgage-backed securities
Liabilities
Derivative liability	244,000		244,000		2,000
Level 3
Assets
Securities available for sale:	7,481,000		7,481,000
Recurring member
Assets
Loans held for sale	61,363,000		61,363,000		54,413,000
Total Assets	320,373,000		320,373,000		297,069,000
Liabilities
Contingent consideration					350,000
Total	276,000		276,000		478,000
Recurring member \| Interest rate lock commitments
Assets
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Recurring member \| Interest rate swap agreements
Liabilities
Derivative liability	32,000		32,000		126,000
Recurring member \| Forward commitments to sell mortgage-backed securities
Liabilities
Derivative liability	244,000		244,000		2,000
Recurring member \| U.S. Treasury securities
Assets
Securities available for sale:	35,506,000		35,506,000		48,302,000
Recurring member \| Government sponsored entity debt securities
Assets
Securities available for sale:	8,990,000		8,990,000		9,454,000
Recurring member \| Agency mortgage-backed securities
Assets
Securities available for sale:	68,656,000		68,656,000		67,527,000
Recurring member \| Non-agency mortgage-backed securities
Assets
Securities available for sale:	1,000		1,000		2,000
Recurring member \| Covered non-agency mortgage-backed securities
Assets
Securities available for sale:	72,093,000		72,093,000		75,979,000
Recurring member \| State and municipal securities
Assets
Securities available for sale:	21,980,000		21,980,000		15,494,000
Recurring member \| Corporate securities
Assets
Securities available for sale:	44,986,000		44,986,000		19,869,000
Recurring member \| Level 1
Assets
Total Assets	35,506,000		35,506,000		48,302,000
Recurring member \| Level 1 \| U.S. Treasury securities
Assets
Securities available for sale:	35,506,000		35,506,000		48,302,000
Recurring member \| Level 2
Assets
Loans held for sale	61,363,000		61,363,000		54,413,000
Total Assets	277,386,000		277,386,000		248,767,000
Liabilities
Total	276,000		276,000		128,000
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Recurring member \| Level 2 \| Interest rate swap agreements
Liabilities
Derivative liability	32,000		32,000		126,000
Recurring member \| Level 2 \| Forward commitments to sell mortgage-backed securities
Liabilities
Derivative liability	244,000		244,000		2,000
Recurring member \| Level 2 \| Government sponsored entity debt securities
Assets
Securities available for sale:	8,990,000		8,990,000		9,454,000
Recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Securities available for sale:	68,656,000		68,656,000		67,527,000
Recurring member \| Level 2 \| Non-agency mortgage-backed securities
Assets
Securities available for sale:					2,000
Recurring member \| Level 2 \| Covered non-agency mortgage-backed securities
Assets
Securities available for sale:	72,093,000		72,093,000		75,979,000
Recurring member \| Level 2 \| State and municipal securities
Assets
Securities available for sale:	21,980,000		21,980,000		15,494,000
Recurring member \| Level 2 \| Corporate securities
Assets
Securities available for sale:	37,506,000		37,506,000		19,869,000
Recurring member \| Level 3
Assets
Total Assets	7,481,000		7,481,000
Liabilities
Contingent consideration					350,000
Total					350,000
Recurring member \| Level 3 \| Non-agency mortgage-backed securities
Assets
Securities available for sale:	1,000		1,000
Recurring member \| Level 3 \| Corporate securities
Assets
Securities available for sale:	7,480,000		7,480,000
Non recurring member
Liabilities
Impaired loans	10,542,000		10,542,000		16,667,000
Other real estate owned	915,000		915,000		535,000
Non recurring member \| Level 2
Liabilities
Impaired loans	3,081,000		3,081,000		8,821,000
Other real estate owned	915,000		915,000		535,000
Non recurring member \| Level 3
Liabilities
Impaired loans	$ 7,461,000		$ 7,461,000		$ 7,846,000

FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Corporate securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 9,765
Purchases of investment securities recognized as Level 3		$ 3,000
Transferred from Level 2		6,749
Transferred to Level 2	(2,000)	(2,000)
Total realized in earnings(1)	93	251
Total unrealized in other comprehensive income	(294)	(296)
Net settlements (principal and interest)	(84)	(224)
Balance, end of period	7,480	7,480
Non-agency mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	2
Transferred from Level 2		2
Net settlements (principal and interest)	(1)	(1)
Balance, end of period	$ 1	$ 1
Covered non-agency mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period			$ 56,437
Transferred to Level 2			(55,910)
Total realized in earnings(1)			1,487
Net settlements (principal and interest)			$ (2,014)

FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Assets
Securities available for sale:	$ 252,212,000		$ 252,212,000		$ 236,627,000
Investment securities held to maturity	88,590,000		88,590,000		92,816,000
Accrued interest receivable	8,811,000		8,811,000		7,697,000
Liabilities
Trust preferred debentures	37,316,000		37,316,000		37,057,000
Accrued interest payable	1,875,000		1,875,000		979,000
Other than temporary impairment, net of applicable loss-share reimbursements		$ 299,000	824,000	$ 461,000
Level 1
Assets
Cash and due from banks	227,496,000		227,496,000		211,976,000
Federal funds sold	534,000		534,000		499,000
Securities available for sale:	35,506,000		35,506,000		48,302,000
Level 2
Assets
Securities available for sale:	209,225,000		209,225,000		188,325,000
Investment securities held to maturity	88,590,000		88,590,000		92,816,000
Nonmarketable equity securities	18,810,000		18,810,000		15,472,000
Loans held for sale	61,363,000		61,363,000		54,413,000
Accrued interest receivable	8,811,000		8,811,000		7,697,000
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Liabilities
Deposits	2,422,295,000		2,422,295,000		2,371,397,000
Short-term borrowings	138,289,000		138,289,000		107,538,000
FHLB and other borrowings	237,896,000		237,896,000		40,054,000
Subordinated debt	50,260,000		50,260,000		58,198,000
Trust preferred debentures	31,885,000		31,885,000		33,537,000
Accrued interest payable	1,875,000		1,875,000		979,000
Level 3
Assets
Securities available for sale:	7,481,000		7,481,000
Loans, net	2,316,066,000		2,316,066,000		1,992,745,000
Carrying value
Assets
Cash and due from banks	227,496,000		227,496,000		211,976,000
Federal funds sold	534,000		534,000		499,000
Securities available for sale:	252,212,000		252,212,000		236,627,000
Investment securities held to maturity	82,941,000		82,941,000		87,521,000
Nonmarketable equity securities	18,810,000		18,810,000		15,472,000
Loans, net	2,297,219,000		2,297,219,000		1,979,601,000
Loans held for sale	61,363,000		61,363,000		54,413,000
Accrued interest receivable	8,811,000		8,811,000		7,697,000
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Liabilities
Deposits	2,420,032,000		2,420,032,000		2,367,648,000
Short-term borrowings	138,289,000		138,289,000		107,538,000
FHLB and other borrowings	237,543,000		237,543,000		40,178,000
Subordinated debt	54,484,000		54,484,000		61,859,000
Trust preferred debentures	37,316,000		37,316,000		37,057,000
Accrued interest payable	1,875,000		1,875,000		979,000
Fair value
Assets
Cash and due from banks	227,496,000		227,496,000		211,976,000
Federal funds sold	534,000		534,000		499,000
Securities available for sale:	252,212,000		252,212,000		236,627,000
Investment securities held to maturity	88,590,000		88,590,000		92,816,000
Nonmarketable equity securities	18,810,000		18,810,000		15,472,000
Loans, net	2,316,066,000		2,316,066,000		1,992,745,000
Loans held for sale	61,363,000		61,363,000		54,413,000
Accrued interest receivable	8,811,000		8,811,000		7,697,000
Interest rate lock commitments	6,798,000		6,798,000		6,029,000
Liabilities
Deposits	2,422,295,000		2,422,295,000		2,371,397,000
Short-term borrowings	138,289,000		138,289,000		107,538,000
FHLB and other borrowings	237,896,000		237,896,000		40,054,000
Subordinated debt	50,260,000		50,260,000		58,198,000
Trust preferred debentures	31,885,000		31,885,000		33,537,000
Accrued interest payable	1,875,000		1,875,000		979,000
Forward commitments to sell mortgage-backed securities \| Level 2
Liabilities
Derivative Liability	244,000		244,000		2,000
Forward commitments to sell mortgage-backed securities \| Carrying value
Liabilities
Derivative Liability	244,000		244,000		2,000
Forward commitments to sell mortgage-backed securities \| Fair value
Liabilities
Derivative Liability	244,000		244,000		2,000
Interest rate swap agreements \| Level 2
Liabilities
Derivative Liability	32,000		32,000		126,000
Interest rate swap agreements \| Carrying value
Liabilities
Derivative Liability	32,000		32,000		126,000
Interest rate swap agreements \| Fair value
Liabilities
Derivative Liability	32,000		32,000		$ 126,000
Corporate securities
Assets
Securities available for sale:	6,700,000		6,700,000
Liabilities
Transferred to Level 2	2,000,000		$ 2,000,000
Corporate securities \| Minimum
Liabilities
Discount rate (negative)			(2.5)
Corporate securities \| Maximum
Liabilities
Discount rate			2.50%
Corporate securities \| Weighted average
Liabilities
Discount rate			1.50%
Non-agency mortgage-backed securities
Assets
Securities available for sale:	$ 2,000		$ 2,000
Liabilities
Other than temporary impairment, net of applicable loss-share reimbursements		299,000	$ 824,000	461,000
Non-agency mortgage-backed securities \| Minimum
Liabilities
Discount rate			4.00%
Cumulative prepayment rate			0.00%
Cumulative default			1.50%
Loss given default			85.00%
Non-agency mortgage-backed securities \| Maximum
Liabilities
Discount rate			14.00%
Cumulative prepayment rate			100.00%
Cumulative default			100.00%
Loss given default			100.00%
Non-agency mortgage-backed securities \| Weighted average
Liabilities
Discount rate			6.50%
Cumulative prepayment rate			14.00%
Cumulative default			11.00%
Loss given default			96.50%
Covered non-agency mortgage-backed securities
Assets
Securities available for sale:		$ 55,900,000		55,900,000
Liabilities
Transferred to Level 2				$ 55,910,000

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Anticipated material loss	$ 0		$ 0
Losses as a result of make whole requests and loan repurchases	0	$ 12,000	83,000	$ 65,000
Liability for unresolved repurchase demands	340,000		340,000		$ 378,000
Commitments to extend credit
Loan commitments	504,937,000		504,937,000		495,506,000
Financial guarantees – standby letters of credit
Loan commitments	$ 35,608,000		$ 35,608,000		$ 31,029,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 27,265	$ 25,437	$ 79,294	$ 78,455
Provision for loan losses	1,392	6,699	3,146	10,075
Noninterest income	14,937	14,464	41,572	46,683
Noninterest expense	28,663	27,823	87,205	90,071
Income (loss) before income taxes (benefit)	12,147	5,379	30,515	24,992
Income taxes (benefit)	4,102	1,928	10,562	8,281
Net income (loss)	8,045	3,451	19,953	16,711
Total assets	3,247,727	2,832,308	3,247,727	2,832,308	$ 2,884,824
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)	28,394	26,513	82,939	80,406
Provision for loan losses	1,392	6,699	3,146	10,075
Noninterest income	9,714	8,284	21,347	28,427
Noninterest expense	23,646	22,848	69,790	74,005
Income (loss) before income taxes (benefit)	13,070	5,250	31,350	24,753
Income taxes (benefit)	4,573	1,326	9,348	6,936
Net income (loss)	8,497	3,924	22,002	17,817
Total assets	3,252,421	2,838,074	3,252,421	2,838,074
Commercial FHA Origination and Servicing
Segment Reporting Information [Line Items]
Net interest income (expense)	215	348	712	1,240
Noninterest income	3,557	6,124	19,212	16,916
Noninterest expense	3,511	3,783	12,203	11,675
Income (loss) before income taxes (benefit)	261	2,689	7,721	6,481
Income taxes (benefit)	104	1,097	3,088	2,614
Net income (loss)	157	1,592	4,633	3,867
Total assets	100,516	82,991	100,516	82,991
Other
Segment Reporting Information [Line Items]
Net interest income (expense)	(1,344)	(1,424)	(4,357)	(3,191)
Noninterest income	1,666	56	1,013	1,340
Noninterest expense	1,506	1,192	5,212	4,391
Income (loss) before income taxes (benefit)	(1,184)	(2,560)	(8,556)	(6,242)
Income taxes (benefit)	(575)	(495)	(1,874)	(1,269)
Net income (loss)	(609)	(2,065)	(6,682)	(4,973)
Total assets	$ (105,210)	$ (88,757)	$ (105,210)	$ (88,757)

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended		9 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Related Party Transaction [Line Items]
Rent paid	$ 165,000	$ 166,000	$ 540,000	$ 527,000
Chairman
Related Party Transaction [Line Items]
Payment for work on various projects	$ 0	$ 738,000	$ 159,000	$ 1,600,000

SUBSEQUENT EVENTS (Details)		3 Months Ended		9 Months Ended
SUBSEQUENT EVENTS (Details)	Oct. 03, 2016 USD ($) item	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Subsequent Event [Line Items]
Reversal of accrued loss share liabilities, after tax	$ 225,000
Available-for-sale Securities		$ 252,212,000		$ 252,212,000		$ 236,627,000
Available-for-sale Securities, Gross Realized Gains		$ 39,000	$ 1,000	$ 315,000	$ 335,000
Covered non-agency mortgage-backed securities
Subsequent Event [Line Items]
Available-for-sale Securities			$ 55,900,000		$ 55,900,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Number of FDIC Assisted Acquisitions \| item	2
Early termination, consideration paid	$ 565,000
Reversal of accrued loss share liabilities	214,000
Subsequent Event [Member] \| Covered non-agency mortgage-backed securities
Subsequent Event [Line Items]
Available-for-sale Securities	72,100,000
Available-for-sale Securities, Gross Realized Gains	$ 14,300,000