Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2016	Feb. 28, 2017	Jun. 30, 2016
Document and Entity Information
Entity Registrant Name	Midland States Bancorp, Inc.
Entity Central Index Key	0001466026
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 242,113,280
Entity Common Stock, Shares Outstanding		15,561,366
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 189,543	$ 211,976
Federal funds sold	1,173	499
Cash and cash equivalents	190,716	212,475
Investment securities available for sale, at fair value ($0 and $75,979 covered by FDIC loss-share at December 31, 2016 and 2015, respectively)	246,339	236,627
Investment securities held to maturity, at amortized cost (fair value of $81,952 and $92,816 at December 31, 2016 and 2015, respectively)	78,672	87,521
Loans	2,319,976	1,995,589
Allowance for loan losses	(14,862)	(15,988)
Total loans, net	2,305,114	1,979,601
Loans held for sale, at fair value	70,565	54,413
Premises and equipment, net	66,692	73,133
Other real estate owned	3,560	5,472
Nonmarketable equity securities	19,485	15,472
Accrued interest receivable	8,202	7,697
Mortgage servicing rights at lower of cost or market	68,008	66,651
Intangible assets	7,187	7,004
Goodwill	48,836	46,519
Cash surrender value of life insurance policies	74,226	52,729
Accrued income taxes receivable	5,862	8,754
Deferred tax assets, net		1,496
Other assets	40,259	29,260
Total assets	3,233,723	2,884,824
Deposits:
Noninterest-bearing	562,333	543,401
Interest- bearing	1,842,033	1,824,247
Total deposits	2,404,366	2,367,648
Short-term borrowings	131,557	107,538
FHLB advances and other borrowings	237,518	40,178
Subordinated debt	54,508	61,859
Trust preferred debentures	37,405	37,057
Accrued interest payable	1,045	979
Deferred tax liabilities, net	8,598
Other liabilities	36,918	36,509
Total liabilities	2,911,915	2,651,768
Shareholders’ Equity:
Common stock, $0.01 par value; 40,000,000 shares authorized; 15,483,499 and 11,797,404 shares issued and outstanding at December 31, 2016 and 2015, respectively	155	118
Capital surplus	209,712	135,822
Retained earnings	112,513	90,911
Accumulated other comprehensive (loss) income	(610)	6,029
Total Midland States Bancorp, Inc. shareholders’ equity	321,770	232,880
Noncontrolling interest in subsidiaries	38	176
Total shareholders’ equity	321,808	233,056
Total liabilities and shareholders’ equity	$ 3,233,723	$ 2,884,824

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Available for sale, covered by FDIC loss-share	$ 0	$ 75,979
Investment securities held to maturity	$ 81,952	$ 92,816
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	15,483,499	11,797,404
Common stock, shares outstanding	15,483,499	11,797,404

CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Loans:
Taxable	$ 105,531	$ 100,814	$ 55,514
Tax exempt	1,155	1,175	782
Investment securities:
Taxable	9,981	11,502	12,063
Tax exempt	3,634	3,916	4,604
Federal funds sold and cash investments	948	389	178
Total interest income	121,249	117,796	73,141
Interest expense:
Deposits	8,936	7,511	5,198
Short-term borrowings	303	237	179
FHLB advances and other borrowings	1,057	741	1,682
Subordinated debt	3,858	2,731	728
Trust preferred debentures	1,841	1,669	756
Total interest expense	15,995	12,889	8,543
Net interest income	105,254	104,907	64,598
Provision for loan losses	5,591	11,127	92
Net interest income after provision for loan losses	99,663	93,780	64,506
Noninterest income:
Commercial FHA revenue	22,064	20,175
Residential mortgage banking revenue	13,389	17,634	3,000
Wealth management revenue	8,091	7,292	7,098
Merchant services revenue	1,697	1,529	1,083
Service charges on deposit accounts	3,904	3,969	3,036
Interchange revenue	3,750	3,562	2,613
FDIC loss-sharing expense	(1,661)	(566)	(3,491)
Gain on sales of investment securities, net	14,702	193	77
Other-than-temporary impairment on investment securities	(824)	(461)	(190)
Gain on sales of other real estate owned	113	600	761
Gain on sales of other assets			3,224
Other income	6,832	5,555	3,230
Total noninterest income	72,057	59,482	20,441
Noninterest expense:
Salaries and employee benefits	66,293	63,313	32,503
Occupancy and equipment	13,080	13,151	7,587
Data processing	10,658	10,197	6,402
FDIC insurance	1,707	2,051	1,328
Professional	8,049	8,687	5,677
Marketing	2,733	2,891	2,530
Communications	2,150	2,354	1,541
Loan expense	1,957	2,960	1,204
Other real estate owned	935	945	2,189
Amortization of intangible assets	2,147	2,460	2,115
FHLB advances prepayment fee			1,746
Other expense	11,589	8,755	4,658
Total noninterest expense	121,298	117,764	69,480
Income before income taxes	50,422	35,498	15,467
Income taxes	18,889	11,091	4,651
Net income	31,533	24,407	10,816
Less: net (loss) income attributable to noncontrolling interest in subsidiaries	(9)	83
Net income attributable to Midland States Bancorp, Inc.	31,542	24,324	10,816
Preferred stock dividends			7,601
Net income available to common shareholders	$ 31,542	$ 24,324	$ 3,215
Per common share data:
Basic earnings per common share	$ 2.22	$ 2.03	$ 0.53
Diluted earnings per common share	$ 2.17	$ 2.00	$ 0.53
Weighted average common shares outstanding	14,130,552	11,902,455	5,945,615
Weighted average diluted common shares outstanding	14,428,839	12,112,403	6,025,454

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 31,533	$ 24,407	$ 10,816
Investment securities available for sale:
Unrealized gains (losses) that occurred during the period	3,556	(7,278)	7,517
Reclassification adjustment for realized net gains on sales of investment securities included in net income	(14,702)	(193)	(77)
Income tax effect	4,469	3,007	(3,519)
Change in investment securities available for sale, net of tax	(6,677)	(4,464)	3,921
Investment securities held to maturity:
Amortization of unrealized gain on investment securities transferred from available-for-sale	(66)	(356)	(537)
Income tax effect	29	143	156
Change in investment securities held to maturity, net of tax	(37)	(213)	(381)
Cash flow hedges:
Change in fair value of interest rate swap	126	115	112
Income tax effect	(51)	(46)	(27)
Change in cash flow hedges, net of tax	75	69	85
Other comprehensive (loss) income, net of tax	(6,639)	(4,608)	3,625
Total comprehensive income	24,894	19,799	14,441
Less: net (loss) income attributable to noncontrolling interest in subsidiaries	(9)	83
Total comprehensive income attributable to Midland States Bancorp, Inc.	$ 24,903	$ 19,716	$ 14,441

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands	Midland States Bancorp, Inc.'s Shareholders' Equity IPO	Midland States Bancorp, Inc.'s Shareholders' Equity Private Placement	Midland States Bancorp, Inc.'s Shareholders' Equity Dividend Declared [Member]	Midland States Bancorp, Inc.'s Shareholders' Equity	Preferred stock Series C preferred stock	Preferred stock Series D preferred stock	Preferred stock Series E preferred stock	Preferred stock Series F preferred stock	Preferred stock	Common stock IPO	Common stock Private Placement	Common stock Series C preferred stock	Common stock Series D preferred stock	Common stock Series E preferred stock	Common stock Series F preferred stock	Common stock	Capital surplus IPO	Capital surplus Private Placement	Capital surplus Series C preferred stock	Capital surplus Series D preferred stock	Capital surplus Series E preferred stock	Capital surplus Series F preferred stock	Capital surplus	Retained earnings Dividend Declared [Member]	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock Series C preferred stock	Treasury stock	Noncontrolling interests in subsidiaries	IPO	Private Placement	Dividend Declared [Member]	Total
Balance at the beginning of the period at Dec. 31, 2013				$ 149,440					$ 57,370							$ 50							$ 14,797		$ 74,576	$ 7,012		$ (4,365)					$ 149,440
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				10,816																					10,816								10,816
Compensation expense for stock option grants				240																			240										240
Amortization of restricted stock awards				468																			468										468
Common dividends declared				(3,512)																					(3,512)								(3,512)
Preferred dividends declared			$ (4,698)																					$ (4,698)								$ (4,698)	(7,601)
Conversion of preferred stock into shares of common stock					(23,600)	(22,470)	(6,300)	(5,000)				17	10	5	2				19,259	22,460	6,295	4,998					4,324
Issuance of common stock for preferred dividends																1							2,902		(2,903)								2,903
Issuance of 2,224,091 shares of common stock for an acquisition				46,706												22							46,684										46,706
Fair value of noncontrolling interest recognized from business combination																													$ 473				473
Issuance of common stock		$ 16,156									$ 9							$ 16,147													$ 16,156
Issuance of common stock under employee benefits plans				215												1							173					$ 41					215
Other comprehensive income (loss)				3,625																						3,625							3,625
Balance at the end 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				24,324																					24,324				83				24,407
Cash distributions to noncontrolling interests																													(380)				(380)
Compensation expense for stock option grants				413																			413										413
Amortization of restricted stock awards				517																			517										517
Common dividends declared				(7,692)																					(7,692)								(7,692)
Issuance of common stock under employee benefits plans				470												1							469										470
Other comprehensive income (loss)				(4,608)																						(4,608)							(4,608)
Balance at the end of the period (Scenario, Previously Reported [Member]) at Dec. 31, 2015				232,880												118							135,822		90,911	6,029			176				233,056
Balance at the end of the period at Dec. 31, 2015				232,880												118							135,909		90,824	6,029			176				233,056
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle \| Adjustments for New Accounting Principle, Early Adoption [Member] \| Accounting Standards Update 2016-09 [Member]																							87		(87)
Net income				31,542																					31,542				(9)				31,533
Cash distributions to noncontrolling interests																													(129)				(129)
Compensation expense for stock option grants				492																			492										492
Amortization of restricted stock awards				(555)																			(555)										(555)
Common dividends declared				(9,853)																					(9,853)								(9,853)
Issuance of common stock	$ 71,475									$ 36							$ 71,439													$ 71,475
Issuance of common stock under employee benefits plans				1,318												1							1,317										1,318
Other comprehensive income (loss)				(6,639)																						(6,639)							(6,639)
Balance at the end of the period at Dec. 31, 2016				$ 321,770												$ 155							$ 209,712		$ 112,513	$ (610)			$ 38				$ 321,808

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Common dividend declared, per share	$ 0.72	$ 0.65	$ 0.59
Common stock shares			138,239
Issuance of of common stock (shares)			138,239
Issuance of 2,224,091 shares of common stock for an acquisition (shares)			2,224,091
IPO
Common stock shares	3,590,065
Issuance of of common stock (shares)	3,590,065
Private Placement
Common stock shares			887,562
Issuance of of common stock (shares)			887,562
Series C preferred stock
Common stock shares			2,008,543
Issuance of of common stock (shares)			2,008,543
Series D preferred stock
Common stock shares			1,039,823
Issuance of of common stock (shares)			1,039,823
Series E preferred stock
Common stock shares			536,171
Issuance of of common stock (shares)			536,171
Series F preferred stock
Common stock shares			231,375
Issuance of of common stock (shares)			231,375

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income	$ 31,533	$ 24,407	$ 10,816
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	5,591	11,127	92
Depreciation on premises and equipment	5,080	5,139	3,464
Amortization of intangible assets	2,147	2,460	2,115
FDIC loss-sharing expense	1,661	566	3,491
Amortization of restricted stock awards	555	517	468
Compensation expense for stock option grants	492	413	240
Increase in cash surrender value of life insurance	(1,497)	(1,474)	(1,065)
Provision for deferred income taxes	14,541	6,474	4,064
Investment securities amortization, net	1,133	1,202	857
Other-than-temporary impairment on investment securities	824	461	190
Gain on sales of investment securities, net	(14,702)	(193)	(77)
Gain on sales of other real estate owned	(113)	(600)	(761)
Write-down of other real estate owned	247	114	1,530
Origination of loans held for sale	(1,176,716)	(943,844)	(88,444)
Proceeds from sales of loans held for sale	1,184,739	1,002,770	88,562
Gain on loans sold and held for sale	(35,127)	(34,017)	(1,994)
Amortization of mortgage servicing rights	6,141	5,015	421
Impairment (recapture) of mortgage servicing rights	3,135	448	(83)
Gain on sales of other assets			(3,224)
Net change in operating assets and liabilities:
Accrued interest receivable	(505)	945	646
Accrued interest payable	66	(88)	50
Accrued income taxes receivable / payable	2,892	(4,775)	(3,048)
Other assets	(6,399)	(2,774)	1,797
Other liabilities	(175)	(648)	1,391
Net cash provided by operating activities	25,543	73,645	21,498
Investment securities available for sale:
Purchases	(198,680)	(83,668)	(30,405)
Sales	115,999	62,751	24,958
Maturities and payments	74,948	29,989	30,594
Investment securities held to maturity:
Purchases	(2,617)	(809)	(8,509)
Maturities	11,019	14,225	15,283
Net increase in loans	(335,943)	(209,109)	(94,858)
Purchases of premises and equipment	(2,071)	(6,008)	(2,920)
Purchase of bank-owned life insurance	(20,000)	(20,000)
Purchases of nonmarketable equity securities	(4,103)	(5,311)
Sales of nonmarketable equity securities	90	1,918
Proceeds from sales of other real estate owned	6,199	6,617	10,928
Net cash (paid) acquired in acquisitions	(5,191)	(20,053)	85,021
Net cash (used in) provided by investing activities	(360,350)	(229,458)	30,092
Cash flows from financing activities:
Net increase in deposits	36,718	217,015	2,674
Net increase (decrease) in short-term borrowings	24,019	(22,176)	25,324
Proceeds from FHLB borrowings	1,015,000	47,500	112,500
Payments made on FHLB borrowings	(817,500)	(67,500)	(117,500)
Proceeds from other borrowings			14,000
Payments made on other borrowings		(14,177)	(7,857)
Proceeds from issuance of subordinated debt, net of issuance costs		55,325
Payments made on subordinated debt	(8,000)
Cash dividends paid on preferred stock			(4,254)
Cash dividends paid on common stock	(9,853)	(7,692)	(3,512)
Proceeds from issuance of common stock in initial public offering, net of issuance costs	71,475
Proceeds from issuance of common stock under employee benefit plans	1,318	470	215
Cash distributions to noncontrolling interests	(129)	(380)
Net cash provided by (used in) financing activities	313,048	208,385	21,590
Net (decrease) increase in cash and cash equivalents	(21,759)	52,572	73,180
Cash and cash equivalents:
Beginning of year	212,475	159,903	86,723
End of year	190,716	212,475	159,903
Cash payments for:
Interest paid on deposits and borrowed funds	15,929	12,977	8,493
Income tax paid	1,073	8,541	4,684
Supplemental disclosures of noncash investing and financing activities:
Transfer of loans to other real estate owned	$ 4,839	$ 3,533	6,509
Issuance of common stock for preferred dividends			2,903
Cash portion of merger consideration accrued for at year-end			20,053
Private Placement
Supplemental disclosures of noncash investing and financing activities:
Stock Issued During Period, Value, New Issues			16,156
Series C preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock			23,600
Series D preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock			22,470
Series E preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock			6,300
Series F preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock			$ 5,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 1 – Summary of Significant Accounting Policies Nature of Operations Midland States Bancorp, Inc. (“the Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. 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. 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 Love Savings Holding Company (“LSHC”) in December 2014, 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 The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and conform to predominant practices within the banking industry. Such principles require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes. These estimates are based on information available to management at the time the estimates are made. 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. Current economic and market conditions significantly affect the judgments. While the consolidated financial statements reflect management’s best estimates and judgments, actual results could differ from those estimates. Certain amounts for prior years have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or total assets. 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 consolidated financial statements. The Company operates through its principal wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and principal subsidiaries: Love Funding and Business Credit. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally federal funds are sold for one‑day periods, but not longer than 30 days. Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities, non‑agency mortgage‑backed securities and covered non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as trading, available for sale, or held to maturity at the time of purchase. Securities purchased with the intention of recognizing short‑term profits or which are actively bought and sold are classified as trading account securities and reported at fair value. Unrealized gains and losses on trading securities are included in earnings. Held‑to‑maturity securities are those debt instruments which the Company has the positive intent and ability to hold until maturity. Held‑to‑maturity securities are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. All other securities are classified as available for sale. Available‑for‑sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available‑for‑sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available‑for‑sale or held‑to‑maturity security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other‑than‑temporary impairment (“OTTI”) losses, we consider the severity and duration of the impairment; the financial condition and near‑term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; projected cash flows on covered non‑agency mortgage‑backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. Covered investment securities. Covered investment securities included non‑agency mortgage‑backed securities acquired from the Federal Deposit Insurance Corporation (“FDIC”) as receiver of Strategic Capital Bank (“Strategic”). Investment securities covered under the loss‑sharing agreements with the FDIC were reported exclusive of the expected reimbursement cash flows from the FDIC. Reimbursements could be claimed for realized losses including losses realized on the sale of the securities and losses due to OTTI. The securities were initially recorded at fair value at the acquisition date and continued to be carried at fair value. Declines in the fair value of available‑for‑sale securities below their cost that were deemed to be other than temporary were reflected in earnings as realized losses in other‑than‑temporary impairment of investment securities in the consolidated statements of income. 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 the section titled “Indemnification Asset Due from FDIC.” Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”), and other nonmarketable equity securities. The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank is also a member of its regional FRB. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Loans Covered loans. We refer to “covered loans” as those loans that we acquired in the Strategic and Westbridge Bank and Trust Company (“Westbridge”) acquisitions for which we would be reimbursed for a substantial portion of any future losses under the terms of the FDIC loss‑sharing agreements. Loans covered under loss‑sharing or similar credit protection agreements with the FDIC were reported in loans exclusive of the expected reimbursement cash flows from the FDIC. Covered loans were initially recorded at fair value at the acquisition date. Subsequent decreases in the amount expected to be collected resulted in a provision for loan losses and a corresponding increase was recorded to the indemnification asset due from FDIC on the consolidated balance sheet. Covered loans were accounted for as either non‑Purchased Credit Impaired loans or Purchased Credit Impaired (“PCI”) loans, as discussed below. 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 the section titled “Indemnification Asset Due from FDIC.” Non‑Purchased Credit Impaired loans. Non‑PCI loans for which the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as loans in the consolidated balance sheets. Non‑PCI loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of any unearned discount or unamortized premium. Interest income is recorded on the accrual basis in accordance with the terms of the respective loan. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well‑secured and management believes full collectability of principal and interest is probable. Nonrefundable loan fees and related direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Lease Financing. The Company provides indirect financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the lease property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans. We account for loans under Accounting Standards Codification (“ASC”) 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. An allowance related to PCI loans was required at December 31, 2016 and 2015 due to changes in expected cash flows since the date of acquisition. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. At December 31, 2016 and 2015, generally, loans in the commercial loan portfolio that were in nonaccrual status were valued based on the fair value of the collateral securing the loan, while certain of the impaired loans in the commercial loan portfolio that were modified under troubled debt restructurings and in an accrual status were valued based on the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually, obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods. Covered loans included PCI and non‑PCI loans and were subject to our internal and external credit review. If and when credit deterioration occurred subsequent to the acquisition dates, a provision for loan losses for covered loans was charged to earnings for the full amount without regard to the FDIC loss‑sharing agreements. The portion of the loss on covered loans reimbursable from the FDIC was recorded in noninterest income as “FDIC loss‑sharing income, net” and increased the FDIC indemnification asset. 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 the section titled “Indemnification Asset Due from FDIC”. Loans Held for Sale Loans held for sale consist of residential and commercial mortgage loans that management intends to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in mortgage banking revenue. Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 23 in the consolidated financial statements for additional information on the mortgage repurchase reserve. Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income. Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 30th as of the date to perform the annual impairment test. Refer to Note 9 in the consolidated financial statements for additional information on the annual impairment test results. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value. Mortgage Servicing Rights The Company sells residential and commercial mortgage loans in the secondary market and typically retains the right to service the loans sold. Upon sale, a mortgage servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. Mortgage servicing rights, when purchased, are initially recorded at fair value. As the Company has not elected to subsequently measure either of its classes of servicing assets, residential or commercial, under the fair value measurement method, the Company follows the amortization method. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The Company periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on the fair value of net servicing cash flows at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are determined based on current market conditions. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other‑than‑temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write‑down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write‑down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. We recognize revenue from servicing residential and commercial mortgages as earned based on the specific contractual terms. This revenue, along with changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Cash Surrender Value of Life Insurance Policies We have purchased life insurance policies on the lives of certain officers and key employees and are the owner and beneficiary of the policies. These policies provide an efficient form of funding for long‑term retirement and other employee benefits costs. These policies are recorded as cash surrender value of life insurance policies in the consolidated balance sheets at each policy’s respective cash surrender value, with changes in value recorded in noninterest income in the consolidated statements of income. Indemnification Asset Due from FDIC As part of the Strategic and WestBridge transactions, the Company entered into loss‑share agreements with the FDIC. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss-share agreements. Under the terms of this agreement, the Company paid the FDIC $565,000 as consideration for 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. Derivative Financial Instruments All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. On the date the derivative contract is entered into, the derivative is designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability “cash flow” hedge. Changes in the fair value of a derivative that is highly effective as—and that is designated and qualifies as—a cash flow hedge are recorded in accumulated other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable‑rate asset or liability are recorded in earnings). We formally document all relationships between hedging instruments and hedged items, as well as the risk‑management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, hedge accounting is prospectively discontinued, as discussed below. Hedge accounting is prospectively discontinued when (a) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (b) the derivative expires or is sold, terminated, or exercised; (c) the derivative is no longer designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the consolidated balance sheet at its fair value, and gains and losses that were in accumulated other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the consolidated balance sheet, with subsequent changes in its fair value recognized in current‑period earnings. The Company also enters into interest rate lock commitments, which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Interest rate lock commitments for mortgage loans that will be held for resale are carried at fair value on the consolidated balance sheet with changes in fair value reflected in mortgage banking revenue. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. Forward loan sales commitments that meet the definition of a derivative are recorded at fair value in the consolidated balance sheet with changes in fair value reflected in mortgage banking income. Credit‑Related Financial Instruments In the ordinary course of business, the Company has entered into credit‑related financial instruments consisting of commitments to extend credit, commercial letters of credit and standby letters of credit. The notional amount of these commitments is not reflected in the consolidated financial statements until they are funded. A liability for losses related to unfunded commitments is maintained by the Company at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the liability is based on an evaluation of the unfunded credit facilities, including an assessment of historical commitment utilization experience, credit risk grading and historical loss rates. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of the Company’s allowance for loan losses, as discussed above. Net adjustments to the liability for unfunded commitments are included in other noninterest expense in the consolidated statements of income. The liability for unfunded commitments totaled $302,000 and $220,000 at December 31, 2016 and 2015, respectively. Income Taxes We file consolidated federal and state income tax returns, with each organization computing its taxes on a separate return basis. The provision for income taxes is based on income as reported in the consolidated financial statements. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. The deferred tax assets and liabilities are computed based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely than‑not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. Interest and penalties associated with unrecognized tax benefits are to be classified as additional income taxes in the consolidated statements of income. The Company evaluated its tax positions and concluded that it had taken no uncertain tax positions that require adjustment in the consolidated financial statements. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, states or local tax authorities for the years before 2011. Stock Compensation Plans Compensation cost for share‑based payment awards is based on the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a Black‑Scholes option pricing model. The fair value of restricted stock is determined based on the Company’s current market price on the date of grant. Compensation cost is recognized in the consolidated financial statements on a straight‑line basis over the requisite service period, which is generally defined as the vesting period. Additionally, the Company accounts for forfeitures as they occur. Comprehensive Income Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non‑owner changes in equity. Non‑owner equity changes include unrealized gains and losses on available for sale securities and changes in the fair value of cash flow hedges. These are components of comprehensive income and do not have an impact on the Company’s net income. Earnings per Share Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards and common stock warrants using the treasury stock method and convertible preferred stock and convertible debentures using the if‑converted method. Impact of Recently Issued Accounting Standards FASB Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”; FASB ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” – In May 2014, the Financial Accounting Standards Board (the “FASB”) amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company’s revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and noninterest income. The Company expects that ASU 2014-09 will require a change in how the Company recognizes certain recurring revenue streams within wealth management and merchant services; however, these changes are not expected to have a significant impact on the Company’s consolidated financial statements. The Company continues to evaluate the impact of ASU 2014-09 on other components of noninterest income and expects to adopt the standard in the first quarter of 2018 with a cumulative effective adjustment to opening retained earnings, if such adjustment is deemed to be significant. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. This update is effective for us on January 1, 2019, with early adoption permitted. We have not yet decided whether we will early adopt the new standard. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. The Company has developed a project plan for evaluating the provisions of the new lease standard, but has not yet determined the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the pending adoption of ASU 2016-02 and its impact on the Company’s consolidated financial statements. FASB ASU 2016-09, “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 elected to early adopt the new guidance in the fourth quarter of 2016. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In connection with the adoption, the Company has elected to account for forfeitures as they occur. 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. While the Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, the Company cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the potential impact on the Company’s consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends 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 plans to adopt this new guidance in the first quarter of fiscal year 2017 and does not expect the adoption to have a material impact on its consolidated financial statements.

ACQUISITIONS	12 Months Ended
ACQUISITIONS	Dec. 31, 2016
ACQUISITIONS
ACQUISITIONS	Note 2 – Acquisitions On November 10, 2016, the Bank completed its acquisition of approximately $400.0 million in wealth management assets from Sterling National Bank of Yonkers, New York (“Sterling”) for approximately $5.2 million in cash. Intangible assets recognized as a result of the transaction consisted of approximately $2.3 million in goodwill and $2.3 million in trust relationship intangible. The trust relationship intangible is being amortized on a straight-line basis over 20 years. 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 was defined as the amount, if any, by which 50% of Love Funding’s adjusted net income (for the two-year period ended December 31, 2016) exceeded $9.1 million, multiplied by an earn-out multiple. The payment of any contingent consideration was not required as a result of Love Funding not reaching the certain level of net income for the two-year period ending December 31, 2016 and as a result, the remaining contingent consideration liability of $350,000 was reversed in 2016. The Company had reversed $180,000 of the contingent consideration liability in 2015 based on its assessment of the liability at that time. The reversals of this liability were recognized in other income in the consolidated statements of income. 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.

- 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

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+ Details

CASH AND DUE FROM BANKS	12 Months Ended
CASH AND DUE FROM BANKS	Dec. 31, 2016
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS	Note 3 – Cash and Due From Banks The Bank is required to maintain cash reserves based on the level of certain of its deposits. This reserve requirement may be met by funds on deposit with the FRB and cash on hand. The required balance at December 31, 2016 and 2015 was $22.6 million and $20.3 million, respectively. The Bank maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Bank has not experienced any losses in such accounts. The Bank believes it is not exposed to any significant credit risk from cash and cash equivalents.

- Definition

The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify.

+ References + Details

INVESTMENT SECURITIES AVAILABLE FOR SALE

12 Months Ended

Dec. 31, 2016

Available for sale

Schedule of Available-for-sale Securities [Line Items]

Investment securities

Note 4 – Investment Securities Available for Sale

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


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


	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 1 to the consolidated financial statements.

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 inputs.

Unrealized losses and fair values for investment securities available for sale as of December 31, 2016 and 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):


	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	$	75,901	$	72	$	—	$	—	$	75,901	$	72
Government sponsored entity debt securities		4,107		22		—		—		4,107		22
Agency mortgage-backed securities		57,882		930		402		2		58,284		932
State and municipal securities		20,215		567		—		—		20,215		567
Corporate securities		11,111		334		8,312		107		19,423		441
Total	$	169,216	$	1,925	$	8,714	$	109	$	177,930	$	2,034


	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 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 December 31, 2016 and 2015, 107 and 54 investment securities available for sale, respectively, had unrealized losses with aggregate depreciation of 1.13% 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 2016, the Company determined that three covered non-agency mortgage-backed securities had OTTI of $824,000, primarily resulting from changes in expected cash flows. These amounts were recognized as losses in the consolidated statements of income.

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

During 2014, the Company determined that one non‑agency mortgage‑backed security had OTTI of $20,000 and one covered non‑agency mortgage‑backed security had OTTI of $170,000, both 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 investment securities available for sale, by maturity, at December 31, 2016 (in thousands). The maturities of 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 investment securities available for sale are based on final contractual maturity.


	Amortized		Fair
	cost		value
Within one year	$	75,030	$	75,008
After one year through five years		105,597		105,344
After five years through ten years		52,866		52,625
After ten years		14,032		13,362
Subtotal	$	247,525	$	246,339

Gross realized gains from the sale of securities available for sale were $15.5 million, $368,000 and $173,000 for the years ended December 31, 2016, 2015 and 2014, respectively. On October 4, 2016, the Company sold its previously covered non-agency mortgage-backed securities which had a carrying value of $72.1 million. As a result of the sale, the Company realized a gain totaling $14.3 million.

Gross realized losses were $837,000, $175,000 and $96,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

INVESTMENT SECURITIES HELD TO MATURITY

12 Months Ended

Dec. 31, 2016

Held to maturity

Schedule of Held-to-maturity Securities [Line Items]

Investment securities

Note 5 – Investment Securities Held to Maturity

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


	2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	78,672	$	3,517	$	237	$	81,952


	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 December 31, 2016 and 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):


	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	$	13,991	$	140	$	2,699	$	97	$	16,690	$	237


	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 December 31, 2016 and 2015, 47 and 25 investment securities held to maturity, respectively, had unrealized losses with aggregate depreciation of 1.40% 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 investment securities held to maturity as of December 31, 2016, by contractual maturity, are as follows (in thousands):


	Amortized		Fair
	cost		value
Within one year	$	861	$	865
After one year through five years		22,915		23,537
After five years through ten years		42,080		44,547
After ten years		12,816		13,003
Total	$	78,672	$	81,952

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

LOANS

12 Months Ended

Dec. 31, 2016

LOANS

LOANS

Note 6 – Loans

The following table presents total loans outstanding by portfolio, which includes PCI loans, as of December 31, 2016 and 2015 (in thousands):


	2016		2015
Loans:
Commercial	$	457,827	$	499,573
Commercial real estate		969,615		876,784
Construction and land development		177,325		150,266
Total commercial loans		1,604,767		1,526,623
Residential real estate		253,713		163,224
Consumer		270,017		161,512
Lease financing		191,479		144,230
Total loans	$	2,319,976	$	1,995,589

Total loans include net deferred loan fees of $3.1 million and $5.8 million at December 31, 2016 and 2015, respectively, and unearned discounts of $20.7 million and $15.7 million within the lease financing portfolio at December 31, 2016 and 2015, respectively.

At December 31, 2016 and 2015, the Company had commercial and residential loans held for sale totaling $70.6 million and $54.4 million, respectively. During the years ended December 31, 2016 and 2015, the Company sold commercial and residential real estate loans with proceeds totaling $1.18 billion and $1.00 billion, respectively.

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

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

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

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

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

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

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

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

We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon normal terms, including collateralization and interest rates prevailing at the time, and did not involve more than the normal risk of repayment by the borrower. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates totaled $26.5 million and $39.2 million at December 31, 2016 and 2015, respectively. During 2016 and 2015, there were $16.1 million and $36.2 million, respectively, of new loans and other additions, while repayments and other reductions totaled $28.8 million and $15.0 million, respectively.

Credit Quality Monitoring

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

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

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

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

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

Credit Quality Indicators

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

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

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

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

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

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

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

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


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	426,560	$	925,244	$	159,702	$	1,511,506
Special mention		10,930		8,735		—		19,665
Substandard		12,649		21,178		450		34,277
Substandard – nonaccrual		3,559		7,145		21		10,725
Doubtful		—		—		—		—
Not graded		612		1,593		5,002		7,207
Total (excluding PCI)	$	454,310	$	963,895	$	165,175	$	1,583,380

The Company evaluates the credit quality of its other loans based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be impaired for purposes of credit quality evaluation. The following table presents the recorded investment of our other loans (excluding PCI loans) based on the credit risk profile of loans that are performing and loans that are impaired as of December 31, 2016 (in thousands):


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	242,127	$	269,492	$	190,148	$	701,767
Impaired		5,029		213		1,331		6,573
Total (excluding PCI)	$	247,156	$	269,705	$	191,479	$	708,340

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 December 31, 2016 and 2015 do not include $28.3 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 December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Nonaccrual loans:
Commercial	$	3,559	$	5,702
Commercial real estate		7,145		8,844
Construction and land development		21		—
Residential real estate		4,629		3,516
Consumer		187		2
Lease financing		1,330		398
Total nonaccrual loans		16,871		18,462
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		2,378		865
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		—		228
Consumer		26		49
Lease financing		1		—
Total accruing loans contractually past due 90 days or more as to interest or principal payments		2,405		1,142
Loans modified under troubled debt restructurings:
Commercial		611		3
Commercial real estate		11,253		4,873
Construction and land development		63		—
Residential real estate		400		411
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings		12,327		5,287
Total impaired loans (excluding PCI)	$	31,603	$	24,891

There was no interest income recognized on nonaccrual loans during 2016, 2015 and 2014 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 $718,000, $992,000 and $615,000 in 2016, 2015 and 2014, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $339,000, $267,000 and $222,000 in 2016, 2015 and 2014, respectively.

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


							Average		Interest Income
			Unpaid		Related		Annual		Recognized
	Recorded		Principal		Valuation		Recorded		While on
	Investment		Balance		Allowance		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	3,877	$	3,888	$	882	$	3,974	$	15
Commercial real estate		2,142		2,331		309		2,379		306
Construction and land development		84		84		8		87		7
Residential real estate		3,735		4,404		604		3,782		30
Consumer		213		190		23		221		—
Lease financing		1,331		1,331		356		1,331		—
Total impaired loans with a valuation allowance		11,382		12,228		2,182		11,774		358
Impaired loans with no related valuation allowance:
Commercial		2,671		7,567		—		5,604		1
Commercial real estate		16,256		17,058		—		16,847		17
Construction and land development		—		—		—		—		—
Residential real estate		1,294		1,462		—		1,179		2
Consumer		—		26		—		26		—
Lease financing		—		—		—		—		—
Total impaired loans with no related valuation allowance		20,221		26,113		—		23,656		20
Total impaired loans:
Commercial		6,548		11,455		882		9,578		16
Commercial real estate		18,398		19,389		309		19,226		323
Construction and land development		84		84		8		87		7
Residential real estate		5,029		5,866		604		4,961		32
Consumer		213		216		23		247		—
Lease financing		1,331		1,331		356		1,331		—
Total impaired loans (excluding PCI)	$	31,603	$	38,341	$	2,182	$	35,430	$	378

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


							Average		Interest Income
			Unpaid		Related		Annual		Recognized
	Recorded		Principal		Valuation		Recorded		While on
	Investment		Balance		Allowance		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	5,789	$	8,760	$	1,797	$	7,088	$	—
Commercial real estate		9,197		9,489		514		9,225		267
Construction and land development		—		26		—		—		—
Residential real estate		3,206		3,798		626		3,231		16
Consumer		51		52		7		52		—
Lease financing		398		398		50		398		—
Total impaired loans with a valuation allowance		18,641		22,523		2,994		19,994		283
Impaired loans with no related valuation allowance:
Commercial		781		781		—		781		—
Commercial real estate		4,520		5,840		—		4,599		—
Construction and land development		—		—		—		—		—
Residential real estate		949		989		—		954		2
Consumer		—		—		—		—		—
Lease financing		—		—		—		—		—
Total impaired loans with no related valuation allowance		6,250		7,610		—		6,334		2
Total impaired loans:
Commercial		6,570		9,541		1,797		7,869		—
Commercial real estate		13,717		15,329		514		13,824		267
Construction and land development		—		26		—		—		—
Residential real estate		4,155		4,787		626		4,185		18
Consumer		51		52		7		52		—
Lease financing		398		398		50		398		—
Total impaired loans (excluding PCI)	$	24,891	$	30,133	$	2,994	$	26,328	$	285

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 $6.7 million and $5.2 million at December 31, 2016 and 2015, respectively.

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


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

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
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	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, the release of a personal guarantee in a bankruptcy situation or any other concessionary type of renegotiated debt. Loans are not classified as TDRs when the modification is short-term or results in only an insignificant delay or shortfall in the payments to be received.

Loans modified as TDRs for commercial and commercial real estate loans generally consist of allowing commercial borrowers to defer scheduled principal payments and make interest only payments for a specified period of time at the stated interest rate of the original loan agreement or lower payments due to a modification of the loans’ contractual terms. TDRs that continue to accrue interest and are greater than $50,000 are individually evaluated for impairment, on a quarterly basis, and transferred to nonaccrual status when it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the contractual terms of the loan. TDRs that subsequently default are individually evaluated for impairment at the time of default. The allowance for loan losses on TDRs totaled $203,000 and $109,000 as of December 31, 2016 and 2015, respectively. The Company had no unfunded commitments in connection with TDRs at December 31, 2016 and 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 December 31, 2016 and 2015 (in thousands):


	2016						2015
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	611	$	—	$	611	$	3	$	40	$	43
Commercial real estate		11,253		5,098		16,351		4,873		5,332		10,205
Construction and land development		63		—		63		—		—		—
Residential real estate		400		527		927		411		383		794
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	12,327	$	5,625	$	17,952	$	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 year ended December 31, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2016 (dollars in thousands):


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Troubled debt restructurings:
Number of loans		3		2		—		3		—		—		8
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	206	$	—	$	—	$	11,098
Post-modification outstanding balance		611		10,139		—		206		—		—		10,956

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

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


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

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

Allowance for Loan Losses

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

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

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

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

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

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

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

Changes in the allowance for loan losses for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):


	2016						2015						2014
	Non-PCI		PCI				Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300	$	11,985	$	11,687	$	23,672
Provision for loan losses		6,425		(834)		5,591		11,061		66		11,127		300		(208)		92
Loan charge-offs		(7,668)		(68)		(7,736)		(9,565)		(92)		(9,657)		(2,271)		(9,825)		(12,096)
Loan recoveries		894		125		1,019		2,094		124		2,218		489		143		632
Net loan charge-offs		(6,774)		57		(6,717)		(7,471)		32		(7,439)		(1,782)		(9,682)		(11,464)
Balance at end of period	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300

In 2016, the Company recorded $7.7 million of non-PCI loan charge-offs, which included a $1.6 million charge-off on a nonperforming commercial loan to one borrower, a $1.4 million charge-off on a nonperforming commercial loan to one borrower and a $530,000 charge-off on nonperforming commercial loans related to a single credit relationship as a result of the deterioration in the borrower’s collateral position on the respective loans. In 2015, the Company recorded $9.6 million of non-PCI loan charge-offs, which included a $7.5 million charge-off on a group of nonperforming loans to one borrower due to deterioration in the borrower’s collateral position on these loans. In 2014, the Company recorded $9.8 million of PCI loan charge-offs primarily due to a PCI loan pool of commercial real estate loans from a previous acquisition being closed out in 2014 due to no more active loans remaining in the pool.

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


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

(1)

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

The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the year ended December 31, 2015 and provides details regarding the balance in the allowance for loan losses and the recorded investment in loans as of 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
Changes in allowance for loan losses in 2015:
Beginning balance	$	2,284	$	6,925	$	486	$	2,038	$	567	$	—	$	12,300
Provision for loan losses		11,154		(2,001)		86		663		405		820		11,127
Charge-offs		(7,742)		(379)		(171)		(742)		(334)		(289)		(9,657)
Recoveries		1,221		634		34		161		111		57		2,218
Ending balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Allowance for loan losses at December 31, 2015 attributable to:
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) at December 31, 2015:
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)

Purchased Credit Impaired Loans

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

Changes in the accretable yield for PCI loans were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands):


	2016		2015		2014
Balance at beginning of period	$	10,526	$	16,198	$	5,480
New loans purchased – Heartland acquisition		—		—		11,242
Accretion		(8,579)		(5,676)		(1,393)
Disposals related to foreclosures		—		—		(3)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		915		—		608
Reclassification from non-accretable		6,173		4		264
Balance at end of period	$	9,035	$	10,526	$	16,198

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 December 31, 2016 and 2015 consisted of PCI loans and non-PCI loans as shown in the following table (in thousands):


	2016						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		—		—		—		715		275		990
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total covered loans		—		—		—		1,969		1,660		3,629

Non-covered loans:
Commercial		454,310		3,517		457,827		493,067		5,061		498,128
Commercial real estate		963,895		5,720		969,615		861,868		13,722		875,590
Construction and land development		165,175		12,150		177,325		140,207		10,059		150,266
Residential real estate		247,156		6,557		253,713		154,551		7,683		162,234
Consumer		269,705		312		270,017		161,220		292		161,512
Lease financing		191,479		—		191,479		144,230		—		144,230
Total non-covered loans		2,291,720		28,256		2,319,976		1,955,143		36,817		1,991,960
Total loans	$	2,291,720	$	28,256	$	2,319,976	$	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 1 to the consolidated financial statements.

The outstanding customer balance for PCI loans totaled $34.6 million and $44.5 million as of December 31, 2016 and 2015, respectively.

PREMISES AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2016

PREMISES AND EQUIPMENT

PREMISES AND EQUIPMENT

Note 7 – Premises and Equipment, Net

A summary of premises and equipment as of December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Land	$	14,314	$	14,942
Buildings and improvements		56,766		58,922
Furniture and equipment		21,419		21,803
Total		92,499		95,667
Accumulated depreciation		(25,807)		(22,534)
Premises and equipment, net	$	66,692	$	73,133

Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $5.1 million, $5.1 million, and $3.5 million, respectively.

In November 2016, the Company announced a branch network optimization plan which will reduce the number of banking offices from 46 to 39 by March 2017. As a result of this plan, the Company recorded $1.9 million of asset impairment on existing banking facilities, which was recognized in other expense in the consolidated statements of income, and reclassified $1.6 million of branch related assets as held for sale from premises and equipment, net to other assets on the consolidated balance sheet as of December 31, 2016.

MORTGAGE SERVICING RIGHTS

12 Months Ended

Dec. 31, 2016

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

Note 8 – Mortgage Servicing Rights

At December 31, 2016 and 2015, the Company serviced mortgage loans for others totaling $5.64 billion and $5.48 billion, respectively. A summary of mortgage loans serviced for others as of December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Commercial FHA mortgage loans	$	3,811,066	$	3,649,524
Residential mortgage loans		1,833,443		1,826,280
Total loans serviced for others	$	5,644,509	$	5,475,804

Changes in our mortgage servicing rights were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands):


	2016		2015		2014
Mortgage servicing rights:
Balance at beginning of period	$	67,218	$	62,900	$	2,522
Servicing rights acquired – commercial FHA mortgage loans		—		—		45,544
Servicing rights acquired – residential mortgage loans		—		—		14,791
Servicing rights capitalized – commercial FHA mortgage loans		6,805		4,318		—
Servicing rights capitalized – residential mortgage loans		3,828		5,015		464
Amortization – commercial FHA mortgage loans		(2,388)		(2,272)		—
Amortization – residential mortgage loans		(3,753)		(2,743)		(421)
Balance at end of period		71,710		67,218		62,900
Valuation allowances:
Balance at beginning of period		567		119		202
Additions		6,962		1,630		92
Reductions		(3,827)		(1,182)		(175)
Balance at end of period		3,702		567		119
Mortgage servicing rights, net	$	68,008	$	66,651	$	62,781
Fair value:
At beginning of period	$	66,700	$	62,781	$	2,320
At end of period	$	68,008	$	66,700	$	62,781

The following table is a summary of key assumptions, representing both general economic and other published information and the weighted average characteristics of the commercial and residential portfolios, used in the valuation of servicing rights at December 31, 2016 and 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
December 31, 2016:
Commercial FHA mortgage loans	0.13	%	3.72	%	30.2	8.31	%	$	1,000	10 - 13	%
Residential mortgage loans	0.26	%	3.89	%	24.2	9.72	%	$	60.27	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

12 Months Ended

Dec. 31, 2016

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Note 9 – Goodwill and Intangible Assets

At December 31, 2016 and 2015, goodwill totaled $48.8 million and $46.5 million, respectively, reflecting an increase of approximately $2.3 million as a result of the Sterling acquisition, as further discussed in Note 2 to the consolidated financial statements. Goodwill represents the amount by which the cost of an acquisition exceeded fair value of net assets acquired in connection with the purchase of another financial institution. Goodwill is tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company performed its most recent annual goodwill impairment test as of September 30, 2016 and concluded that no impairment existed as of that date.

The following table summarizes the carrying amount of goodwill by segment at December 31, 2016 and 2015 (in thousands).


	2016		2015
Banking	$	35,627	$	35,627
Commercial FHA Origination and Servicing		10,892		10,892
Other		2,317		—
Total goodwill	$	48,836	$	46,519

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


	2016						2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	20,542	$	(16,181)	$	4,361	$	20,542	$	(14,471)	$	6,071
Trust relationship intangibles		5,471		(2,645)		2,826		3,141		(2,208)		933
Total intangible assets	$	26,013	$	(18,826)	$	7,187	$	23,683	$	(16,679)	$	7,004

In conjunction with the acquisition of wealth management assets from Sterling on November 10, 2016, we recorded $2.3 million of trust relationship intangibles, which are being amortized on a straight line basis over 20 years, as further discussed in Note 2 to the consolidated financial statements.

Amortization of intangible assets was $2.1 million, $2.5 million and $2.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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


	Amount
Year ending December 31,
2017	$	1,827
2018		1,247
2019		913
2020		597
2021		446
Thereafter		2,157
Total	$	7,187

- Definition

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

+ References + Details

DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2016

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Note 10 – Derivative Instruments

As part of the Company’s overall management of interest rate sensitivity, the Company utilizes derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest rate volatility, including interest rate lock commitments, forward commitments to sell mortgage-backed securities and interest rate swap 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 December 31, 2016 and 2015 (in thousands):


	Notional Amount				Fair Value Gain
	2016		2015		2016		2015
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	264,359	$	257,023	$	6,253	$	6,029
Forward commitments to sell mortgage-backed securities		301,788		—		125		—
Total	$	566,147	$	257,023	$	6,378	$	6,029


	Notional Amount				Fair Value Loss
	2016		2015		2016		2015
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	—	$	278,313	$	—	$	2

Net gains recognized on derivative instruments were $351,000, $6.0 million and $97,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Net gains 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 terms of 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 December 31, 2015, the fair value of the agreement reflected losses of $126,000, 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
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-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
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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+ Details

DEPOSITS

12 Months Ended

Dec. 31, 2016

Deposits [Abstract]

DEPOSITS

Note 11 – Deposits

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


	2016		2015
Noninterest-bearing demand	$	562,333	$	543,401
Interest-bearing:
Checking		656,248		621,925
Money market		399,851		377,654
Savings		166,910		155,778
Time		619,024		668,890
Total deposits	$	2,404,366	$	2,367,648

Included in time deposits are time certificates of $250,000 or more and brokered certificates of deposits of $52.9 million and $218.7 million as of December 31, 2016, respectively, and $52.2 million and $222.3 million as of December 31, 2015, respectively.

Investment securities with a carrying amount of $75.3 million and $120.2 million were pledged for public deposits at December 31, 2016 and 2015, respectively. Standby letters of credit issued by the FHLB on our behalf of $68.0 million and $8.0 million were pledged for public deposits at December 31, 2016 and 2015, respectively.

As of December 31, 2016, the scheduled maturities of time deposits are as follows (in thousands):


	Amount
Year ending December 31,
2017	$	334,631
2018		213,568
2019		55,837
2020		6,288
2021		8,698
Thereafter		2
Total	$	619,024

SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2016

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

Note 12 – Short-Term Borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2016 and 2015 (in thousands):


	Repurchase Agreements
	2016			2015
Outstanding at period-end	$	131,557		$	107,538
Average amount outstanding		130,228			123,447
Maximum amount outstanding at any month end		168,369			147,542
Weighted average interest rate:
During period		0.23	%		0.19	%
End of period		0.21	%		0.21	%

At December 31, 2016, the Bank had federal funds lines of credit totaling $30.0 million. These lines of credit were unused at December 31, 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 $140.0 million and $135.4 million at December 31, 2016 and 2015, respectively, were pledged for securities sold under agreements to repurchase.

The Bank had lines of credit of $35.1 million and $62.1 million at December 31, 2016 and 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 $43.3 million and $76.7 million at December 31, 2016 and 2015, respectively. There were no outstanding borrowings at December 31, 2016 and 2015.

FHLB ADVANCES AND OTHER BORROWINGS

12 Months Ended

Dec. 31, 2016

FHLB ADVANCES AND OTHER BORROWINGS

FHLB ADVANCES AND OTHER BORROWINGS

Note 13 – FHLB Advances and Other Borrowings

The following table summarizes our FHLB advances and other borrowings as of December 31, 2016 and 2015 (in thousands):


	2016		2015
FHLB advances – fixed rate, fixed term, at rates averaging 0.89% and 0.93%, respectively, at December 31, 2016 and 2015, respectively – maturing through August 2023	$	237,500	$	40,000
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018		18		178
Total FHLB advances and other borrowings	$	237,518	$	40,178

On December 18, 2014, the Company entered into a $14.0 million term loan agreement with another bank. The interest rate was fixed at 4.85% for the term of the loan. This loan was paid off in June 2015.

On December 31, 2014, the Company repaid $40.0 million of FHLB advances with a weighted average interest rate of 2.86% and maturity dates ranging from 2016 to 2017. As a result, the Company paid a prepayment fee of $1.7 million that was recorded as noninterest expense in the consolidated statements of income.

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 $1.18 billion and $987.4 million at December 31, 2016 and 2015, respectively.

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


	Amount
2017	$	62,514
2018		50,004
2019		—
2020		—
2021		50,000
Thereafter		75,000
Total	$	237,518

SUBORDINATED DEBT

12 Months Ended

Dec. 31, 2016

SUBORDINATED DEBT

SUBORDINATED DEBT

Note 14 – Subordinated Debt

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


	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		39,729		39,659
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,779		14,752
Total subordinated debt	$	54,508	$	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

12 Months Ended

Dec. 31, 2016

TRUST PREFERRED DEBENTURES.

TRUST PREFERRED DEBENTURES

Note 15 – Trust Preferred Debentures

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


	2016		2015

Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.74% and 3.17%, at December 31, 2016 and 2015, respectively – $3,000 maturing January 23, 2034	$	1,996	$	1,932
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.63% and 3.07% at December 31, 2016 and 2015, respectively – $10,000 maturing April 23, 2034		9,957		9,954
LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.71% and 2.26% at December 31, 2016 and 2015, respectively – $20,000 maturing December 31, 2036		13,141		13,001
LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.42% and 1.92% at December 31, 2016 and 2015, respectively – $20,000 maturing September 6, 2037		12,311		12,170
Total trust preferred debentures	$	37,405	$	37,057

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

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

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

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

INCOME TAXES

12 Months Ended

Dec. 31, 2016

INCOME TAXES

INCOME TAXES

Note 16 – Income Taxes

The components of income taxes for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):


	2016		2015		2014
Federal:
Current	$	1,718	$	3,500	$	217
Deferred		11,381		5,604		2,970
State:
Current		2,630		1,117		370
Deferred		3,160		870		1,094
Total income tax expense	$	18,889	$	11,091	$	4,651

The Company’s income tax expense differed from the statutory federal rate of 35% for the years ended December 31, 2016, 2015 and 2014 as follows (in thousands):


	2016		2015		2014
Expected income taxes	$	17,648	$	12,424	$	5,414
Less income tax effect of:
Tax exempt interest		(1,670)		(1,934)		(1,809)
Interest expense disallowance		33		29		38
State tax, net of federal benefit		3,132		1,292		1,540
Increase in cash surrender value of life insurance policies		(1,007)		(516)		(373)
Indemnification income		—		(311)		—
Valuation allowance		631		—		—
Other		122		107		(159)
Actual income tax expense	$	18,889	$	11,091	$	4,651

Deferred tax (liabilities) assets, net in the accompanying consolidated balance sheets as of December 31, 2016 and 2015 include the following amounts of deferred tax assets and liabilities (in thousands):


	2016		2015
Assets:
Allowance for loan losses	$	5,766	$	6,435
Deferred compensation		2,136		2,029
Loans acquired in FDIC assisted transactions		—		3,878
Investments acquired in FDIC assisted transactions		—		3,504
Loans		1,972		2,889
Write-down of other real estate owned		70		1,758
Tax credits		3,106		3,076
Nonaccrual interest		1,007		727
Unrealized loss on securities		387		—
Intangible assets		292		—
Stock compensation		689		268
Other, net		777		2,160
Deferred tax assets		16,202		26,724
Valuation allowance		(631)		—
Deferred tax assets, net of valuation allowance		15,571		26,724
Liabilities:
Premises and equipment		1,268		2,414
Unrealized gain on securities		—		4,061
Mortgage servicing rights		15,092		12,084
Fair value adjustment on trust preferred debentures		6,023		6,387
Federal Home Loan Bank stock dividends		227		235
Indemnification asset due from FDIC		—		(82)
Deferred loan fees, net of costs		136		103
Intangible assets		—		26
Accounting method changes		1,156		—
Other, net		267		—
Deferred tax liabilities		24,169		25,228
Deferred tax (liabilities) assets, net	$	(8,598)	$	1,496

At December 31, 2016 and 2015, the accumulation of prior year’s earnings representing tax bad debt deductions was approximately $3.1 million for both years. If these tax bad debt reserves were charged for losses other than bad debt losses, the Company would be required to recognize taxable income in the amount of the charge. It is not expected that such tax‑restricted retained earnings will be used in a manner that would create federal income tax liabilities.

The Company had no material federal or state net operating loss carryforwards at December 31, 2016.

The Company has a federal alternative minimum tax credit carryforward of $1.5 million that can be carried forward indefinitely.

The Company has state tax credit carryforwards of $920,000 with a five year carryforward period and expiring between 2016 and 2021. Any amounts that are expected to expire before being fully utilized have been accounted for through a valuation allowance as discussed below.

We had no unrecognized tax benefits as of December 31, 2016 and 2015, and did not recognize any increase of unrecognized benefits during 2016 relative to any tax positions taken during the year.

Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to record such accruals in other income or expense; no such accruals existed as of December 31, 2016 and 2015.

Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. All available evidence, both positive and negative, should be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. The Company has concluded, based on all available evidence, a valuation allowance is needed for the Company’s deferred tax asset related to state tax credit carryforwards. A valuation allowance of $631,000 was established for the state tax credit carryforwards. For the Company’s remaining deferred tax assets, based on our taxpaying history and estimates of taxable income over the years in which the items giving rise to the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences.

The Company is subject to U.S. federal income tax as well as income tax of various states. Years that remain open for potential review by the Internal Revenue Service are 2013 through 2015 and for state taxing authorities are 2012 through 2015.

A company that was purchased in a recent acquisition is under examination by the state of Missouri for tax years 2012, 2013, and 2014.

RETIREMENT PLANS	12 Months Ended
RETIREMENT PLANS	Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]
RETIREMENT PLANS	Note 17 – Retirement Plans We sponsor the Midland States Bank 401(k) Profit Sharing Plan which provides retirement benefits to substantially all of our employees. There were no employer discretionary profit sharing contributions made to the 401(k) plan in 2016, 2015 and 2014. The 401(k) component of the plan allows participants to defer a portion of their compensation ranging from 1% to 100%. Such deferrals accumulate on a tax deferred basis until the employee withdraws the funds. The Company matches 50% of employee contributions up to 6% of their compensation. Total expense recorded for the Company match was $1.2 million, $1.1 million and $484,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Certain directors and executive officers participate in a deferred compensation arrangement. We match 25% of the amount deferred by directors who defer all of their director fees into a Company stock unit account. The directors vest in the Company match at a rate of 25% per year. Distributions of amounts vested under the plan are made to participants upon their separation from service. At December 31, 2016 and 2015, the accrued liability for these arrangements totaled $3.1 million and $2.7 million, respectively, and was reflected in other liabilities in the consolidated balance sheets. Expense associated with these arrangements was $605,000, $596,000 and $519,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Distributions of $126,000, $56,000 and $115,000 were made to directors who resigned during the years ended December 31, 2016, 2015 and 2014, respectively. In November 2015, the Company entered into a supplemental retirement agreement with its Chief Executive Officer (“CEO”). The CEO is eligible to receive supplemental retirement payments in each of 2019, 2020 and 2021 equal to 50%, 40% and 30%, respectively, of his final salary on December 31, 2018 (retirement date). A liability for these benefit payments is being accrued on a present value basis up to his retirement date using applicable risk-free interest rates. At December 31, 2016 and 2015, the accrued liability for this arrangement totaled $219,000 and $24,000, respectively, and was reflected in other liabilities in the consolidated balance sheets. Midland participates in the Pentegra Defined Benefit Plan for Financial Institutions, a noncontributory defined benefit pension plan for certain former employees of Heartland who have met prescribed eligibility requirements. The multiple‑employer plan operates as a single plan under Internal Revenue code 413(c) and, as a result, all of the amounts contributed by the participating institutions are maintained in the aggregate. The plan is funded based on an annual valuation performed by the plan administrator. Benefits under the plan were frozen in 2004. The funded status of the plan (market value of assets divided by funding target) was 119.53% as of July 1, 2016, the latest actuarial valuation date. Future costs for administration, shortfalls in funds to maintain the frozen level of benefit coverage and differences of actuarial assumptions related to the frozen benefits will be expensed as incurred. The minimum required contribution for these costs in 2016 and 2015 was $134,000 and $132,000, respectively.

STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2016

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

Note 18 – Stock Based Compensation

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

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


	2016		2015		2014
Dividend yield	3.00	%	3.14	%	3.36	%
Expected volatility	16.98		16.94		21.80
Risk free interest rate	1.64		1.93		1.90
Expected life	6.25	years	6.25	years	6.25	years

The summary of our stock option activity during the years ended December 31, 2016 and 2015 is as follows:


	2016					2015
				Weighted					Weighted
		Weighted		average			Weighted		average
		average		remaining			average		remaining
		exercise		contractual			exercise		contractual
	Shares	price		life		Shares	price		life
Options outstanding, beginning of year	1,233,606	$	17.52			1,115,841	$	16.57
Options granted	182,118		26.15			176,093		22.81
Options exercised	(66,024)		16.01			(39,448)		14.15
Options forfeited	(30,441)		20.15			(18,880)		18.00
Options outstanding, end of year	1,319,259	$	18.73	6.3	years	1,233,606	$	17.52	6.8	years
Options exercisable	729,483	$	16.37	4.6	years	667,808	$	15.68	5.0	years
Options vested and expected to vest	1,245,713	$	18.56	6.2	years	1,158,706	$	17.37	6.6	years

The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2016 was $23.0 million and $14.5 million, respectively. As of December 31, 2016, there was $1.2 million of total unrecognized compensation cost related to nonvested share‑based compensation arrangements granted under our stock option plans. This cost is expected to be recognized over a period of 2.5 years. The weighted average fair value of options granted during the years ended December 31, 2016, 2015 and 2014 was $2.94, $2.55 and $2.75, respectively.

The total intrinsic value and cash received from options exercised under all share‑based payment arrangements was $971,000 and $890,000, respectively, for the year ended December 31, 2016, $299,000 and $558,000, respectively, for the year ended December 31, 2015, and $32,000 and $74,000, respectively for the year ended December 31, 2014.

The following table summarizes information about the Company’s nonvested stock option activity for 2016:


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2015	565,798	$	2.61
Granted	182,118		2.94
Vested	(132,184)		2.41
Forfeited	(25,956)		2.18
Nonvested at December 31, 2016	589,776	$	2.73

In 2016 and 2015, the Company granted 63,728 and 21,789 shares of restricted stock awards, respectively. These awards have a vesting period of four years. Compensation expense is recognized over the vesting period of the award based on the fair value of the stock at the date of issue. Also, in 2016 and 2015, the Company granted 7,048 and 7,596 restricted stock unit awards, respectively, that may be settled in cash or stock, at the election of the recipient. These awards have a vesting period of two years and three years, respectively. They are classified as a liability and measured at each financial reporting date until settlement of the award.

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


		Weighted
		average
	Number	grant date
	outstanding	fair value
Nonvested at December 31, 2015	73,147	$	20.21
Granted during the year	70,776		27.38
Vested during the year	(29,849)		19.14
Forfeited during the year	(5,427)		20.36
Nonvested at December 31, 2016	108,647	$	25.16

As of December 31, 2016, there was $2.8 million of total unrecognized compensation cost related to the nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted average period of 3.4 years.

The weighted average grant date fair value for restricted stock awards was $27.38, $22.95 and $20.87 during the years ended December 31, 2016, 2015 and 2014, respectively.

Compensation cost that has been charged against income for these plans was $1.1 million, $940,000 and $708,000 for 2016, 2015 and 2014, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

PREFERRED STOCK	12 Months Ended
PREFERRED STOCK	Dec. 31, 2016
Temporary Equity [Abstract]
PREFERRED STOCK	Note 19 – Preferred Stock In 2009, the Company issued $23.6 million of Series C preferred stock through a private placement to qualified accredited investors. The stock paid noncumulative dividends semiannually at a rate of 9% per year. On June 26, 2014, the Company exercised its right and converted all of the 2,360 shares of Series C preferred stock into 2,008,543 shares of common stock. In 2010, the Company issued $23.8 million of Series D preferred stock through a private placement to qualified accredited investors. The stock paid noncumulative dividends semiannually at a rate of 9% per year. In 2011, the Company initiated the repurchase of its Series D preferred stock pursuant to an optional repurchase offer which ended on June 20, 2011. Out of an aggregate 2,377 shares of Series D preferred stock that were originally issued, holders of 130 shares accepted the offer. The repurchase transaction, which was fulfilled on August 31, 2011, totaled $1.3 million based on the original redemption amount of $10,000 per share. In 2011, the Company issued $6.3 million of Series E preferred stock through the exchange of the corresponding principal amount of the May 2009 convertible subordinated debt. The stock paid noncumulative dividends semiannually at a rate of 9% per year. In 2011, the Company issued $5.0 million of Series F preferred stock through the exchange of the corresponding principal amount of the March 2010 convertible subordinated debt. The stock paid noncumulative dividends semiannually at a rate of 9% per year. To further facilitate the acquisition of LSHC, as previously discussed in Note 2 to the consolidated financial statements, all holders of the Company’s outstanding Series D, E, and F preferred stock voluntarily agreed during the fourth quarter of 2013 to convert their preferred holdings into shares of the Company’s common stock at the stated conversion rates, as adjusted, for each series. Preferred shareholders concurrently made an election to receive the amount of any unpaid dividends that would have been payable through the applicable call dates with respect to their preferred shares, at the holders’ option, in the form of either cash or additional common stock. In conjunction with the acquisition of LSHC on December 31, 2014, all of the 3,377 shares of Series D, E and F preferred stock were converted into 1,807,369 shares of common stock. An additional 138,239 shares of common stock were issued to preferred shareholders who elected to receive some or all of their unpaid dividends in the form of additional common stock, while $0.4 million was accrued for those who elected to receive some or all of their unpaid dividends in cash.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2016

Per common share data

EARNINGS PER SHARE

Note 20 – Earnings Per Share

Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards 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 years ended December 31, 2016, 2015 and 2014 (in thousands, except for share and per share data):



	2016		2015		2014
Net income	$	31,542	$	24,324	$	10,816
Preferred stock dividends		—		—		(7,601)
Net income available to common equity		31,542		24,324		3,215
Common shareholder dividends		(9,797)		(7,642)		(3,465)
Unvested restricted stock award dividends		(56)		(50)		(47)
Undistributed earnings to unvested restricted stock awards		(110)		(108)		—
Undistributed earnings to common shareholders	$	21,579	$	16,524	$	(297)
Basic
Distributed earnings to common shareholders	$	9,797	$	7,642	$	3,465
Undistributed earnings to common shareholders		21,579		16,524		(297)
Total common shareholders earnings, basic	$	31,376	$	24,166	$	3,168
Diluted
Distributed earnings to common shareholders	$	9,797	$	7,642	$	3,465
Undistributed earnings to common shareholders		21,579		16,524		(297)
Total common shareholders earnings		31,376		24,166		3,168
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		2		2		—
Total common shareholders earnings, diluted	$	31,378	$	24,168	$	3,168
Weighted average common shares outstanding, basic		14,130,552		11,902,455		5,945,615
Options and warrants		298,287		209,948		79,839
Weighted average common shares outstanding, diluted		14,428,839		12,112,403		6,025,454
Basic earnings per common share	$	2.22	$	2.03	$	0.53
Diluted earnings per common share		2.17		2.00		0.53

CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2016

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

Note 21 – 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 Rule”), 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 Rule, 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 Rule also established a new capital conservation buffer, comprised of common equity Tier 1 capital, which is 0.625% beginning January 1, 2016 and increases 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 Rule for well-capitalized banks (under prompt corrective action provisions) are 6.5% for Common equity tier 1 capital, 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 December 31, 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 December 31, 2016 and 2015, the Company’s and the Bank’s actual and required capital ratios were as follows (dollars in thousands):


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


	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

12 Months Ended

Dec. 31, 2016

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Note 22 – 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 December 31, 2016 and 2015, are summarized below (in thousands):


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

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


	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 years ended December 31, 2016 and 2015 (in thousands):


	2016		2015
Impaired loans	$	2,459	$	1,589
Other real estate owned		247		114
Assets held for sale		1,646		—
Total loss on assets measured on a nonrecurring basis	$	4,352	$	1,703

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


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

(1)

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

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2015 (in thousands).


	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 December 31, 2016 and 2015 (in thousands):


	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	$	189,543	$	189,543	$	189,543	$	—	$	—
Federal funds sold		1,173		1,173		1,173		—		—
Investment securities available for sale		246,339		246,339		75,901		162,957		7,481
Investment securities held to maturity		78,672		81,952		—		81,952		—
Nonmarketable equity securities		19,485		19,485		—		19,485		—
Loans, net		2,305,114		2,305,206		—		—		2,305,206
Loans held for sale		70,565		70,565		—		70,565		—
Accrued interest receivable		8,202		8,202		—		8,202		—
Interest rate lock commitments		6,253		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		125		—		125		—
Liabilities
Deposits	$	2,404,366	$	2,404,231	$	—	$	2,404,231	$	—
Short-term borrowings		131,557		131,557		—		131,557		—
FHLB and other borrowings		237,518		236,736		—		236,736		—
Subordinated debt		54,508		49,692		—		49,692		—
Trust preferred debentures		37,405		33,054		—		33,054		—
Accrued interest payable		1,045		1,045		—		1,045		—


	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		—
Forward commitments to sell mortgage-backed securities		2		2		—		2		—
Interest rate swap agreement		126		126		—		126		—

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

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

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

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

For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). During the year ended December 31, 2016, $6.7 million of corporate securities and $2,000 of non-agency mortgage backed securities were transferred from Level 2 to Level 3 because observable market inputs were not available and the securities were not actively traded; therefore, the fair value was determined utilizing third-party valuation services through consensus pricing.

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

Non-agency mortgage backed 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 non-agency mortgage-backed securities is net market price (range of -5.0% to 5.0%; weighted average was not available.) Significant changes in any of the inputs in isolation would result in a significant change to the fair value measurement. Net market price generally increases when market interest rates decline and declines when market interest rates increase.

During the year ended December 31, 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 years ended December 31, 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 previously covered by FDIC loss-sharing agreements.

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

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

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

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.

Impaired loans. Impaired loans are measured and recorded at fair value on a non-recurring basis. All of our nonaccrual loans and restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure impaired loans based on the estimated fair value of such collateral. The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment. The loan balances shown in the above tables represent nonaccrual and restructured loans for which impairment was recognized during the years ended December 31, 2016 and 2015. The amounts shown as losses represent, for the loan balances shown, the impairment recognized during those same years.

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

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

Assets held for sale. Assets held for sale represent the fair value of the banking facilities that are expected to be sold as a result of the branch network optimization plan that was announced in November 2016, as further discussed in Note 7 to the consolidated financial statements. The fair value of the assets held for sale was based on estimated market prices from independently prepared current appraisals. Such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis.

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

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

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

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

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

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

Derivative financial instruments. The Company enters into interest rate lock commitments which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. These commitments are carried at fair value in other assets on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. These commitments are carried at fair value in other assets or other liabilities on the consolidated balance sheets with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The interest rate swap agreement, which matured in October 2016 as discussed in Note 10 to the consolidated financial statements, was 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

12 Months Ended

Dec. 31, 2016

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Note 23 – Commitments, Contingencies and Credit Risk

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

We are obligated under noncancelable operating leases for office space and other commitments. Certain leases contain escalation clauses providing for increased rental payments based primarily on increases in real estate taxes or in the average consumer price index. Net rent expense under operating leases included in occupancy and equipment expense was approximately $2.4 million, $2.4 million and $460,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

The projected minimum rental payments under the terms of the leases as of December 31, 2016 are as follows (in thousands):


	Amount
Year ending December 31:
2017	$	2,415
2018		2,248
2019		2,023
2020		1,919
2021		1,832
Thereafter		5,122
Total estimated lease payments	$	15,559

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

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The commitments are principally tied to variable rates. Loan commitments as of December 31, 2016 and 2015 are as follows (in thousands):


	2016		2015
Commitments to extend credit	$	483,345	$	495,506
Financial guarantees – standby letters of credit		89,233		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, $63,000 and $86,000 for the years ended December 31, 2016, 2015 and 2014, respectively. The liability for unresolved repurchase demands totaled $329,000 and $378,000 at December 31, 2016 and 2015, respectively.

In 2015, the Company recorded a loss contingency liability related to a Love Funding legal dispute with a former employee. The claim was expressly covered by the indemnities received by the Company pursuant to the terms of certain agreements associated with the acquisition of LSHC and as a result, a corresponding indemnification asset was recorded. As of December 31, 2015, the loss contingency liability was $1.2 million and the corresponding indemnification asset, net of the loss contingency tax benefit, was $890,000, which were included in other liabilities and other assets, respectively, in the 2015 consolidated balance sheet. In the first quarter of 2016, the legal dispute with the former employee was resolved, and there are no outstanding loss contingency liabilities or indemnification assets related to this matter.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2016

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 24 – Segment Information

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

Selected business segment financial information as of and for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
December 31, 2016
Net interest income (expense)	$	109,950	$	1,003	$	(5,699)	$	105,254
Provision for loan losses		5,591		—		—		5,591
Noninterest income		47,646		22,979		1,432		72,057
Noninterest expense		100,062		15,104		6,132		121,298
Income (loss) before income taxes (benefit)		51,943		8,878		(10,399)		50,422
Income taxes (benefit)		17,129		3,332		(1,572)		18,889
Net income (loss)	$	34,814	$	5,546	$	(8,827)	$	31,533
Total assets	$	3,225,765	$	129,943	$	(121,985)	$	3,233,723

December 31, 2015
Net interest income (expense)	$	107,825	$	1,762	$	(4,680)	$	104,907
Provision for loan losses		11,127		—		—		11,127
Noninterest income		34,751		20,148		4,583		59,482
Noninterest expense		95,712		16,232		5,820		117,764
Income (loss) before income taxes (benefit)		35,737		5,678		(5,917)		35,498
Income taxes (benefit)		10,626		2,271		(1,806)		11,091
Net income (loss)	$	25,111	$	3,407	$	(4,111)	$	24,407
Total assets	$	2,886,539	$	89,242	$	(90,957)	$	2,884,824

December 31, 2014
Net interest income (expense)	$	66,449	$	—	$	(1,851)	$	64,598
Provision for loan losses		92		—		—		92
Noninterest income		13,343		—		7,098		20,441
Noninterest expense		63,351		—		6,129		69,480
Income (loss) before income taxes (benefit)		16,349		—		(882)		15,467
Income taxes (benefit)		5,181		—		(530)		4,651
Net income (loss)	$	11,168	$	—	$	(352)	$	10,816
Total assets	$	2,710,476	$	119,649	$	(153,511)	$	2,676,614

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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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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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599

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-Name Accounting Standards Codification
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+ Details

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2016
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	Note 25 – Related Party Transactions The Company utilizes the services of a company to act as a general manager for the construction of new branch facilities. A member of our board of directors is a substantial shareholder of this company and currently serves as its Chairman. During the years ended December 31, 2016, 2015 and 2014, the Company paid $161,000, $1.8 million and $306,000, 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 years ended December 31, 2016 and 2015, the Company paid rent on these properties of $706,000 and $693,000, respectively.

PARENT COMPANY ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2016

PARENT COMPANY ONLY FINANCIAL INFORMATION

PARENT COMPANY ONLY FINANCIAL INFORMATION

Note 26 – Parent Company Only Financial Information

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


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2016		2015
Assets:
Cash	$	38,803	$	8,318
Investment in common stock of subsidiaries		380,474		325,682
Accrued income taxes receivable		17		2,657
Other assets		2,047		3,644
Total assets	$	421,341	$	340,301
Liabilities:
Subordinated debt	$	54,508	$	61,859
Trust preferred debentures		37,405		37,057
Deferred tax liabilities, net		5,037		5,087
Other liabilities		2,621		3,418
Total liabilities		99,571		107,421
Shareholders’ equity		321,770		232,880
Total liabilities and shareholders’ equity	$	421,341	$	340,301


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2016		2015		2014
Dividends from subsidiaries	$	—	$	14,500	$	13,600
Other income		428		1,070		—
Interest expense		(5,699)		(4,680)		(1,851)
Other expense		(1,130)		(132)		(60)
(Loss) income before income taxes and equity in undistributed income (loss) of subsidiaries		(6,401)		10,758		11,689
Equity in undistributed income (loss) of subsidiaries		36,256		11,760		(1,403)
Income before income taxes		29,855		22,518		10,286
Income tax benefit		1,687		1,806		530
Net income	$	31,542	$	24,324	$	10,816


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2016		2015		2014
Cash flows from operating activities:
Net income	$	31,542	$	24,324	$	10,816
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries		(36,256)		(11,760)		1,403
Amortization of restricted stock awards		555		517		468
Compensation expense for stock option grants		492		413		240
Change in other assets		4,237		(3,559)		576
Change in other liabilities		225		(8,426)		(1,065)
Net cash provided by operating activities		795		1,509		12,438
Cash flows from investing activities:
Net cash acquired in acquisition		—		(20,053)		1,500
Capital injection to subsidiaries		(25,250)		(30,000)		—
Net cash (used in) provided by investing activities		(25,250)		(50,053)		1,500
Cash flows from financing activities:
Payment made on subordinated debt		(8,000)		—		—
Proceeds from issuance of subordinated debt, net of issuance costs		—		55,325		—
Proceeds from other borrowings		—		—		14,000
Payments made on other borrowings		—		(14,000)		(15,938)
Cash dividends paid on common stock		(9,853)		(7,692)		(3,512)
Cash dividends paid on preferred stock		—		—		(4,254)
Proceeds from issuance of common stock in initial public offering, net of issuance costs		71,475		—		—
Proceeds from issuance of common stock under employee benefit plans		1,318		470		215
Net cash provided by (used in) financing activities		54,940		34,103		(9,489)
Net increase (decrease) in cash		30,485		(14,441)		4,449
Cash:
Beginning of year		8,318		22,759		18,310
End of year	$	38,803	$	8,318	$	22,759
Supplemental disclosures of noncash investing and financing activities:
Conversion of Series C preferred stock into common stock	$	—	$	—	$	23,600
Conversion of Series D preferred stock into common stock		—		—		22,470
Conversion of Series E preferred stock into common stock		—		—		6,300
Conversion of Series F preferred stock into common stock		—		—		5,000
Issuance of common stock for preferred dividends		—		—		2,903
Cash portion of merger consideration accrued for at year-end		—		—		20,053
Issuance of common stock for private placement		—		—		16,156

- Definition

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

+ References + Details

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED)

Note 27 – Quarterly Condensed Financial Information (Unaudited)

The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2016 and 2015 (in thousands, except for per share data):


	2016 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,967	$	32,115	$	31,186	$	29,981
Interest expense		3,926		4,126		3,921		4,022
Net interest income		24,041		27,989		27,265		25,959
Provision for loan losses		1,125		629		1,392		2,445
Net interest income after provision for loan losses		22,916		27,360		25,873		23,514
Noninterest income		12,618		14,016		14,937		30,486
Noninterest expense		27,639		30,903		28,663		34,093
Income before income taxes		7,895		10,473		12,147		19,907
Income taxes		2,777		3,683		4,102		8,327
Net income		5,118		6,790		8,045		11,580
Less: net (loss) income attributable to noncontrolling interest in subsidiaries		(1)		1		(6)		(3)
Net income attributable to Midland States Bancorp, Inc.	$	5,119	$	6,789	$	8,051	$	11,583
Per common share data:
Basic earnings per common share	$	0.43	$	0.51	$	0.51	$	0.74
Diluted earnings per common share		0.42		0.50		0.51		0.72


	2015 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,305	$	31,242	$	28,949	$	30,300
Interest expense		2,604		2,925		3,512		3,848
Net interest income		24,701		28,317		25,437		26,452
Provision for loan losses		997		2,379		6,699		1,052
Net interest income after provision for loan losses		23,704		25,938		18,738		25,400
Noninterest income		18,022		14,197		14,464		12,799
Noninterest expense		31,546		30,703		27,823		27,692
Income before income taxes		10,180		9,432		5,379		10,507
Income taxes		3,590		2,762		1,928		2,811
Net income		6,590		6,670		3,451		7,696
Less: net income attributable to noncontrolling interest in subsidiaries		59		17		6		1
Net income attributable to Midland States Bancorp, Inc.	$	6,531	$	6,653	$	3,445	$	7,695
Per common share data:
Basic earnings per common share	$	0.55	$	0.56	$	0.29	$	0.64
Diluted earnings per common share		0.54		0.55		0.28		0.63

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2016
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	Note 28 – Subsequent Events On January 26, 2017, the Company announced that it had entered into a definitive agreement to acquire Centrue Financial Corporation (“Centrue”) for estimated total consideration of $175.1 million, or $26.75 per share of Centrue common stock. Centrue, the parent company of Centrue Bank, is headquartered in Ottawa, Illinois, and operates 20 full-service banking centers located principally in northern Illinois. As of December 31, 2016, Centrue had total assets of $977.8 million, net loans of $676.9 million and total deposits of $740.0 million. Under the terms of the definitive agreement, upon consummation of the transaction, holders of Centrue common stock will have the right to receive a fixed exchange ratio of 0.7604 shares of the Company’s common stock, $26.75 in cash, or a combination of cash and stock for each share of Centrue common stock they own, subject to proration so that, in the aggregate, 65% of Centrue’s common stock is exchanged for Company common stock and 35% of Centrue’s common stock is exchanged for cash, and subject to potential adjustment based on Centrue’s adjusted stockholders’ equity at closing. Based on an assumed value of $35.18 per share of Midland common stock, the Company estimates the value of the total consideration will be $175.1 million, although the actual value of the total consideration will be higher or lower to the extent the trading price of Company common stock at closing differs from $35.18 per share. For purposes of determining the exchange ratio, the transaction utilizes the Company’s 10-day volume-weighted average stock price through January 13, 2017, or $35.18 per share. In addition, holders of Centrue preferred stock will have the right to receive newly issued shares of the Company’s preferred stock having similar terms. The transaction is expected to close in mid-2017, subject to regulatory approvals, the approval of Centrue’s and the Company’s shareholders, and the satisfaction of customary closing conditions.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and conform to predominant practices within the banking industry. Such principles require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and notes. These estimates are based on information available to management at the time the estimates are made. 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. Current economic and market conditions significantly affect the judgments. While the consolidated financial statements reflect management’s best estimates and judgments, actual results could differ from those estimates. Certain amounts for prior years have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or total assets.
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 consolidated financial statements. The Company operates through its principal wholly owned subsidiary bank, Midland States Bank, headquartered in Effingham, Illinois. The Bank operates through its branch banking offices and principal subsidiaries: Love Funding and Business Credit.
Business Combinations	Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally federal funds are sold for one‑day periods, but not longer than 30 days.
Investment Securities	Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities, non‑agency mortgage‑backed securities and covered non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as trading, available for sale, or held to maturity at the time of purchase. Securities purchased with the intention of recognizing short‑term profits or which are actively bought and sold are classified as trading account securities and reported at fair value. Unrealized gains and losses on trading securities are included in earnings. Held‑to‑maturity securities are those debt instruments which the Company has the positive intent and ability to hold until maturity. Held‑to‑maturity securities are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. All other securities are classified as available for sale. Available‑for‑sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available‑for‑sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available‑for‑sale or held‑to‑maturity security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other‑than‑temporary impairment (“OTTI”) losses, we consider the severity and duration of the impairment; the financial condition and near‑term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; projected cash flows on covered non‑agency mortgage‑backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. Covered investment securities. Covered investment securities included non‑agency mortgage‑backed securities acquired from the Federal Deposit Insurance Corporation (“FDIC”) as receiver of Strategic Capital Bank (“Strategic”). Investment securities covered under the loss‑sharing agreements with the FDIC were reported exclusive of the expected reimbursement cash flows from the FDIC. Reimbursements could be claimed for realized losses including losses realized on the sale of the securities and losses due to OTTI. The securities were initially recorded at fair value at the acquisition date and continued to be carried at fair value. Declines in the fair value of available‑for‑sale securities below their cost that were deemed to be other than temporary were reflected in earnings as realized losses in other‑than‑temporary impairment of investment securities in the consolidated statements of income. 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 the section titled “Indemnification Asset Due from FDIC.”
Nonmarketable Equity Securities	Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”), and other nonmarketable equity securities. The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank is also a member of its regional FRB. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.
Loans	Loans Covered loans. We refer to “covered loans” as those loans that we acquired in the Strategic and Westbridge Bank and Trust Company (“Westbridge”) acquisitions for which we would be reimbursed for a substantial portion of any future losses under the terms of the FDIC loss‑sharing agreements. Loans covered under loss‑sharing or similar credit protection agreements with the FDIC were reported in loans exclusive of the expected reimbursement cash flows from the FDIC. Covered loans were initially recorded at fair value at the acquisition date. Subsequent decreases in the amount expected to be collected resulted in a provision for loan losses and a corresponding increase was recorded to the indemnification asset due from FDIC on the consolidated balance sheet. Covered loans were accounted for as either non‑Purchased Credit Impaired loans or Purchased Credit Impaired (“PCI”) loans, as discussed below. 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 the section titled “Indemnification Asset Due from FDIC.” Non‑Purchased Credit Impaired loans. Non‑PCI loans for which the Company has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as loans in the consolidated balance sheets. Non‑PCI loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of any unearned discount or unamortized premium. Interest income is recorded on the accrual basis in accordance with the terms of the respective loan. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well‑secured and management believes full collectability of principal and interest is probable. Nonrefundable loan fees and related direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Lease Financing. The Company provides indirect financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the lease property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans. We account for loans under Accounting Standards Codification (“ASC”) 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. An allowance related to PCI loans was required at December 31, 2016 and 2015 due to changes in expected cash flows since the date of acquisition. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. At December 31, 2016 and 2015, generally, loans in the commercial loan portfolio that were in nonaccrual status were valued based on the fair value of the collateral securing the loan, while certain of the impaired loans in the commercial loan portfolio that were modified under troubled debt restructurings and in an accrual status were valued based on the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually, obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods. Covered loans included PCI and non‑PCI loans and were subject to our internal and external credit review. If and when credit deterioration occurred subsequent to the acquisition dates, a provision for loan losses for covered loans was charged to earnings for the full amount without regard to the FDIC loss‑sharing agreements. The portion of the loss on covered loans reimbursable from the FDIC was recorded in noninterest income as “FDIC loss‑sharing income, net” and increased the FDIC indemnification asset. 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 the section titled “Indemnification Asset Due from FDIC”.
Loans Held for Sale	Loans Held for Sale Loans held for sale consist of residential and commercial mortgage loans that management intends to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in mortgage banking revenue.
Mortgage Repurchase Reserve	Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 23 in the consolidated financial statements for additional information on the mortgage repurchase reserve.
Premises and Equipment	Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount.
Other Real Estate Owned	Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 30th as of the date to perform the annual impairment test. Refer to Note 9 in the consolidated financial statements for additional information on the annual impairment test results. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value.
Mortgage Servicing Rights	Mortgage Servicing Rights The Company sells residential and commercial mortgage loans in the secondary market and typically retains the right to service the loans sold. Upon sale, a mortgage servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. Mortgage servicing rights, when purchased, are initially recorded at fair value. As the Company has not elected to subsequently measure either of its classes of servicing assets, residential or commercial, under the fair value measurement method, the Company follows the amortization method. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The Company periodically evaluates its mortgage servicing rights asset for impairment. Impairment is assessed based on the fair value of net servicing cash flows at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are determined based on current market conditions. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other‑than‑temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write‑down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write‑down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. We recognize revenue from servicing residential and commercial mortgages as earned based on the specific contractual terms. This revenue, along with changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.
Cash Surrender Value of Life Insurance Policies	Cash Surrender Value of Life Insurance Policies We have purchased life insurance policies on the lives of certain officers and key employees and are the owner and beneficiary of the policies. These policies provide an efficient form of funding for long‑term retirement and other employee benefits costs. These policies are recorded as cash surrender value of life insurance policies in the consolidated balance sheets at each policy’s respective cash surrender value, with changes in value recorded in noninterest income in the consolidated statements of income.
Indemnification Asset Due from FDIC	Indemnification Asset Due from FDIC As part of the Strategic and WestBridge transactions, the Company entered into loss‑share agreements with the FDIC. On October 3, 2016, the Company entered into an agreement with the FDIC to terminate its existing loss-share agreements. Under the terms of this agreement, the Company paid the FDIC $565,000 as consideration for 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.
Derivative Financial Instruments	Derivative Financial Instruments All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. On the date the derivative contract is entered into, the derivative is designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability “cash flow” hedge. Changes in the fair value of a derivative that is highly effective as—and that is designated and qualifies as—a cash flow hedge are recorded in accumulated other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable‑rate asset or liability are recorded in earnings). We formally document all relationships between hedging instruments and hedged items, as well as the risk‑management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, hedge accounting is prospectively discontinued, as discussed below. Hedge accounting is prospectively discontinued when (a) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (b) the derivative expires or is sold, terminated, or exercised; (c) the derivative is no longer designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the consolidated balance sheet at its fair value, and gains and losses that were in accumulated other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the consolidated balance sheet, with subsequent changes in its fair value recognized in current‑period earnings. The Company also enters into interest rate lock commitments, which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Interest rate lock commitments for mortgage loans that will be held for resale are carried at fair value on the consolidated balance sheet with changes in fair value reflected in mortgage banking revenue. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. Forward loan sales commitments that meet the definition of a derivative are recorded at fair value in the consolidated balance sheet with changes in fair value reflected in mortgage banking income.
Credit Related Financial Instruments	Credit‑Related Financial Instruments In the ordinary course of business, the Company has entered into credit‑related financial instruments consisting of commitments to extend credit, commercial letters of credit and standby letters of credit. The notional amount of these commitments is not reflected in the consolidated financial statements until they are funded. A liability for losses related to unfunded commitments is maintained by the Company at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the liability is based on an evaluation of the unfunded credit facilities, including an assessment of historical commitment utilization experience, credit risk grading and historical loss rates. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of the Company’s allowance for loan losses, as discussed above. Net adjustments to the liability for unfunded commitments are included in other noninterest expense in the consolidated statements of income. The liability for unfunded commitments totaled $302,000 and $220,000 at December 31, 2016 and 2015, respectively.
Income Taxes	Income Taxes We file consolidated federal and state income tax returns, with each organization computing its taxes on a separate return basis. The provision for income taxes is based on income as reported in the consolidated financial statements. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. The deferred tax assets and liabilities are computed based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely than‑not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. Interest and penalties associated with unrecognized tax benefits are to be classified as additional income taxes in the consolidated statements of income. The Company evaluated its tax positions and concluded that it had taken no uncertain tax positions that require adjustment in the consolidated financial statements. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, states or local tax authorities for the years before 2011.
Stock Compensation Plans	Stock Compensation Plans Compensation cost for share‑based payment awards is based on the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a Black‑Scholes option pricing model. The fair value of restricted stock is determined based on the Company’s current market price on the date of grant. Compensation cost is recognized in the consolidated financial statements on a straight‑line basis over the requisite service period, which is generally defined as the vesting period. Additionally, the Company accounts for forfeitures as they occur.
Comprehensive Income	Comprehensive Income Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non‑owner changes in equity. Non‑owner equity changes include unrealized gains and losses on available for sale securities and changes in the fair value of cash flow hedges. These are components of comprehensive income and do not have an impact on the Company’s net income.
Earnings per Share	Earnings per Share Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards and common stock warrants using the treasury stock method and convertible preferred stock and convertible debentures using the if‑converted method.
Impact of New Financial Accounting Standards	Impact of Recently Issued Accounting Standards FASB Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”; FASB ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” – In May 2014, the Financial Accounting Standards Board (the “FASB”) amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company’s revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and noninterest income. The Company expects that ASU 2014-09 will require a change in how the Company recognizes certain recurring revenue streams within wealth management and merchant services; however, these changes are not expected to have a significant impact on the Company’s consolidated financial statements. The Company continues to evaluate the impact of ASU 2014-09 on other components of noninterest income and expects to adopt the standard in the first quarter of 2018 with a cumulative effective adjustment to opening retained earnings, if such adjustment is deemed to be significant. FASB ASU 2016-02, “Leases (Topic 842)” - In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. This update is effective for us on January 1, 2019, with early adoption permitted. We have not yet decided whether we will early adopt the new standard. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. The Company has developed a project plan for evaluating the provisions of the new lease standard, but has not yet determined the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the pending adoption of ASU 2016-02 and its impact on the Company’s consolidated financial statements. FASB ASU 2016-09, “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 elected to early adopt the new guidance in the fourth quarter of 2016. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In connection with the adoption, the Company has elected to account for forfeitures as they occur. 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. While the Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, the Company cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. The Company is continuing to evaluate the potential impact on the Company’s consolidated financial statements. FASB ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” – In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which amends 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 plans to adopt this new guidance in the first quarter of fiscal year 2017 and does not expect the adoption to have a material impact on its consolidated financial statements.

INVESTMENT SECURITIES AVAILABLE FOR SALE (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Available-for-sale Securities [Line Items]

Schedule of investment securities classified as available for sale

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


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


	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

Available for sale

Schedule of Available-for-sale Securities [Line Items]

Schedule of unrealized losses and fair values for investment securities


	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	$	75,901	$	72	$	—	$	—	$	75,901	$	72
Government sponsored entity debt securities		4,107		22		—		—		4,107		22
Agency mortgage-backed securities		57,882		930		402		2		58,284		932
State and municipal securities		20,215		567		—		—		20,215		567
Corporate securities		11,111		334		8,312		107		19,423		441
Total	$	169,216	$	1,925	$	8,714	$	109	$	177,930	$	2,034


	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 investment securities available for sale are based on final contractual maturity.


	Amortized		Fair
	cost		value
Within one year	$	75,030	$	75,008
After one year through five years		105,597		105,344
After five years through ten years		52,866		52,625
After ten years		14,032		13,362
Subtotal	$	247,525	$	246,339

INVESTMENT SECURITIES HELD TO MATURITY (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Held-to-maturity Securities [Line Items]

Schedule of investment securities classified as held to maturity

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


	2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
State and municipal securities	$	78,672	$	3,517	$	237	$	81,952


	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 Held-to-maturity Securities [Line Items]

Schedule of unrealized losses and fair values for investment securities


	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	$	13,991	$	140	$	2,699	$	97	$	16,690	$	237


	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 investment securities held to maturity as of December 31, 2016, by contractual maturity, are as follows (in thousands):


	Amortized		Fair
	cost		value
Within one year	$	861	$	865
After one year through five years		22,915		23,537
After five years through ten years		42,080		44,547
After ten years		12,816		13,003
Total	$	78,672	$	81,952

- 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)

12 Months Ended

Dec. 31, 2016

LOANS

Summary of loans

The following table presents total loans outstanding by portfolio, which includes PCI loans, as of December 31, 2016 and 2015 (in thousands):


	2016		2015
Loans:
Commercial	$	457,827	$	499,573
Commercial real estate		969,615		876,784
Construction and land development		177,325		150,266
Total commercial loans		1,604,767		1,526,623
Residential real estate		253,713		163,224
Consumer		270,017		161,512
Lease financing		191,479		144,230
Total loans	$	2,319,976	$	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 December 31, 2016 (in thousands):


			Commercial		Construction and
	Commercial		Real Estate		Land Development		Total
Acceptable credit quality	$	426,560	$	925,244	$	159,702	$	1,511,506
Special mention		10,930		8,735		—		19,665
Substandard		12,649		21,178		450		34,277
Substandard – nonaccrual		3,559		7,145		21		10,725
Doubtful		—		—		—		—
Not graded		612		1,593		5,002		7,207
Total (excluding PCI)	$	454,310	$	963,895	$	165,175	$	1,583,380


	Residential				Lease
	Real Estate		Consumer		Financing		Total
Performing	$	242,127	$	269,492	$	190,148	$	701,767
Impaired		5,029		213		1,331		6,573
Total (excluding PCI)	$	247,156	$	269,705	$	191,479	$	708,340

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 December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Nonaccrual loans:
Commercial	$	3,559	$	5,702
Commercial real estate		7,145		8,844
Construction and land development		21		—
Residential real estate		4,629		3,516
Consumer		187		2
Lease financing		1,330		398
Total nonaccrual loans		16,871		18,462
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial		2,378		865
Commercial real estate		—		—
Construction and land development		—		—
Residential real estate		—		228
Consumer		26		49
Lease financing		1		—
Total accruing loans contractually past due 90 days or more as to interest or principal payments		2,405		1,142
Loans modified under troubled debt restructurings:
Commercial		611		3
Commercial real estate		11,253		4,873
Construction and land development		63		—
Residential real estate		400		411
Consumer		—		—
Lease financing		—		—
Total loans modified under troubled debt restructurings		12,327		5,287
Total impaired loans (excluding PCI)	$	31,603	$	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 December 31, 2016 (in thousands):


							Average		Interest Income
			Unpaid		Related		Annual		Recognized
	Recorded		Principal		Valuation		Recorded		While on
	Investment		Balance		Allowance		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	3,877	$	3,888	$	882	$	3,974	$	15
Commercial real estate		2,142		2,331		309		2,379		306
Construction and land development		84		84		8		87		7
Residential real estate		3,735		4,404		604		3,782		30
Consumer		213		190		23		221		—
Lease financing		1,331		1,331		356		1,331		—
Total impaired loans with a valuation allowance		11,382		12,228		2,182		11,774		358
Impaired loans with no related valuation allowance:
Commercial		2,671		7,567		—		5,604		1
Commercial real estate		16,256		17,058		—		16,847		17
Construction and land development		—		—		—		—		—
Residential real estate		1,294		1,462		—		1,179		2
Consumer		—		26		—		26		—
Lease financing		—		—		—		—		—
Total impaired loans with no related valuation allowance		20,221		26,113		—		23,656		20
Total impaired loans:
Commercial		6,548		11,455		882		9,578		16
Commercial real estate		18,398		19,389		309		19,226		323
Construction and land development		84		84		8		87		7
Residential real estate		5,029		5,866		604		4,961		32
Consumer		213		216		23		247		—
Lease financing		1,331		1,331		356		1,331		—
Total impaired loans (excluding PCI)	$	31,603	$	38,341	$	2,182	$	35,430	$	378

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


							Average		Interest Income
			Unpaid		Related		Annual		Recognized
	Recorded		Principal		Valuation		Recorded		While on
	Investment		Balance		Allowance		Investment		Impaired Status
Impaired loans with a valuation allowance:
Commercial	$	5,789	$	8,760	$	1,797	$	7,088	$	—
Commercial real estate		9,197		9,489		514		9,225		267
Construction and land development		—		26		—		—		—
Residential real estate		3,206		3,798		626		3,231		16
Consumer		51		52		7		52		—
Lease financing		398		398		50		398		—
Total impaired loans with a valuation allowance		18,641		22,523		2,994		19,994		283
Impaired loans with no related valuation allowance:
Commercial		781		781		—		781		—
Commercial real estate		4,520		5,840		—		4,599		—
Construction and land development		—		—		—		—		—
Residential real estate		949		989		—		954		2
Consumer		—		—		—		—		—
Lease financing		—		—		—		—		—
Total impaired loans with no related valuation allowance		6,250		7,610		—		6,334		2
Total impaired loans:
Commercial		6,570		9,541		1,797		7,869		—
Commercial real estate		13,717		15,329		514		13,824		267
Construction and land development		—		26		—		—		—
Residential real estate		4,155		4,787		626		4,185		18
Consumer		51		52		7		52		—
Lease financing		398		398		50		398		—
Total impaired loans (excluding PCI)	$	24,891	$	30,133	$	2,994	$	26,328	$	285

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

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


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

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
	30-59		60-89		Past Due
	Days		Days		90 Days		Nonaccrual		Total				Total
	Past Due		Past Due		or More		Loans		Past Due		Current		Loans
Commercial	$	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)


	2016						2015
	Accruing (1)		Non-accrual (2)		Total		Accruing (1)		Non-accrual (2)		Total
Commercial	$	611	$	—	$	611	$	3	$	40	$	43
Commercial real estate		11,253		5,098		16,351		4,873		5,332		10,205
Construction and land development		63		—		63		—		—		—
Residential real estate		400		527		927		411		383		794
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total loans (excluding PCI)	$	12,327	$	5,625	$	17,952	$	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
Troubled debt restructurings:
Number of loans		3		2		—		3		—		—		8
Pre-modification outstanding balance	$	685	$	10,207	$	—	$	206	$	—	$	—	$	11,098
Post-modification outstanding balance		611		10,139		—		206		—		—		10,956

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


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

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

Summary of changes in allowance for loan losses

Changes in the allowance for loan losses for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):


	2016						2015						2014
	Non-PCI		PCI				Non-PCI		PCI				Non-PCI		PCI
	Loans		Loans		Total		Loans		Loans		Total		Loans		Loans		Total
Balance at beginning of period	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300	$	11,985	$	11,687	$	23,672
Provision for loan losses		6,425		(834)		5,591		11,061		66		11,127		300		(208)		92
Loan charge-offs		(7,668)		(68)		(7,736)		(9,565)		(92)		(9,657)		(2,271)		(9,825)		(12,096)
Loan recoveries		894		125		1,019		2,094		124		2,218		489		143		632
Net loan charge-offs		(6,774)		57		(6,717)		(7,471)		32		(7,439)		(1,782)		(9,682)		(11,464)
Balance at end of period	$	13,744	$	1,118	$	14,862	$	14,093	$	1,895	$	15,988	$	10,503	$	1,797	$	12,300

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


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

(1)


	Commercial Loan Portfolio						Other Loan Portfolio
			Commercial		Construction		Residential
			Real		and Land		Real				Lease
	Commercial		Estate		Development		Estate		Consumer		Financing		Total
Changes in allowance for loan losses in 2015:
Beginning balance	$	2,284	$	6,925	$	486	$	2,038	$	567	$	—	$	12,300
Provision for loan losses		11,154		(2,001)		86		663		405		820		11,127
Charge-offs		(7,742)		(379)		(171)		(742)		(334)		(289)		(9,657)
Recoveries		1,221		634		34		161		111		57		2,218
Ending balance	$	6,917	$	5,179	$	435	$	2,120	$	749	$	588	$	15,988
Allowance for loan losses at December 31, 2015 attributable to:
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) at December 31, 2015:
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

Summary of changes in accretable yield for PCI loans

Changes in the accretable yield for PCI loans were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands):


	2016		2015		2014
Balance at beginning of period	$	10,526	$	16,198	$	5,480
New loans purchased – Heartland acquisition		—		—		11,242
Accretion		(8,579)		(5,676)		(1,393)
Disposals related to foreclosures		—		—		(3)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)		915		—		608
Reclassification from non-accretable		6,173		4		264
Balance at end of period	$	9,035	$	10,526	$	16,198

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 December 31, 2016 and 2015 consisted of PCI loans and non-PCI loans as shown in the following table (in thousands):


	2016						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		—		—		—		715		275		990
Consumer		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Total covered loans		—		—		—		1,969		1,660		3,629

Non-covered loans:
Commercial		454,310		3,517		457,827		493,067		5,061		498,128
Commercial real estate		963,895		5,720		969,615		861,868		13,722		875,590
Construction and land development		165,175		12,150		177,325		140,207		10,059		150,266
Residential real estate		247,156		6,557		253,713		154,551		7,683		162,234
Consumer		269,705		312		270,017		161,220		292		161,512
Lease financing		191,479		—		191,479		144,230		—		144,230
Total non-covered loans		2,291,720		28,256		2,319,976		1,955,143		36,817		1,991,960
Total loans	$	2,291,720	$	28,256	$	2,319,976	$	1,957,112	$	38,477	$	1,995,589

(1)

PREMISES AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2016

PREMISES AND EQUIPMENT

Summary of premises and equipment

A summary of premises and equipment as of December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Land	$	14,314	$	14,942
Buildings and improvements		56,766		58,922
Furniture and equipment		21,419		21,803
Total		92,499		95,667
Accumulated depreciation		(25,807)		(22,534)
Premises and equipment, net	$	66,692	$	73,133

MORTGAGE SERVICING RIGHTS (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2016 and 2015 is as follows (in thousands):


	2016		2015
Commercial FHA mortgage loans	$	3,811,066	$	3,649,524
Residential mortgage loans		1,833,443		1,826,280
Total loans serviced for others	$	5,644,509	$	5,475,804

Changes in our mortgage servicing rights were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands):


	2016		2015		2014
Mortgage servicing rights:
Balance at beginning of period	$	67,218	$	62,900	$	2,522
Servicing rights acquired – commercial FHA mortgage loans		—		—		45,544
Servicing rights acquired – residential mortgage loans		—		—		14,791
Servicing rights capitalized – commercial FHA mortgage loans		6,805		4,318		—
Servicing rights capitalized – residential mortgage loans		3,828		5,015		464
Amortization – commercial FHA mortgage loans		(2,388)		(2,272)		—
Amortization – residential mortgage loans		(3,753)		(2,743)		(421)
Balance at end of period		71,710		67,218		62,900
Valuation allowances:
Balance at beginning of period		567		119		202
Additions		6,962		1,630		92
Reductions		(3,827)		(1,182)		(175)
Balance at end of period		3,702		567		119
Mortgage servicing rights, net	$	68,008	$	66,651	$	62,781
Fair value:
At beginning of period	$	66,700	$	62,781	$	2,320
At end of period	$	68,008	$	66,700	$	62,781

Schedule of summary of key assumptions


					Remaining
	Servicing		Interest		Years to	Prepayment		Servicing		Discount
	Fee		Rate		Maturity	Rate		Cost		Rate
December 31, 2016:
Commercial FHA mortgage loans	0.13	%	3.72	%	30.2	8.31	%	$	1,000	10 - 13	%
Residential mortgage loans	0.26	%	3.89	%	24.2	9.72	%	$	60.27	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)

12 Months Ended

Dec. 31, 2016

GOODWILL AND INTANGIBLE ASSETS

Summarizes the carrying amount of goodwill by segment

Selected business segment financial information as of and for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
December 31, 2016
Net interest income (expense)	$	109,950	$	1,003	$	(5,699)	$	105,254
Provision for loan losses		5,591		—		—		5,591
Noninterest income		47,646		22,979		1,432		72,057
Noninterest expense		100,062		15,104		6,132		121,298
Income (loss) before income taxes (benefit)		51,943		8,878		(10,399)		50,422
Income taxes (benefit)		17,129		3,332		(1,572)		18,889
Net income (loss)	$	34,814	$	5,546	$	(8,827)	$	31,533
Total assets	$	3,225,765	$	129,943	$	(121,985)	$	3,233,723

December 31, 2015
Net interest income (expense)	$	107,825	$	1,762	$	(4,680)	$	104,907
Provision for loan losses		11,127		—		—		11,127
Noninterest income		34,751		20,148		4,583		59,482
Noninterest expense		95,712		16,232		5,820		117,764
Income (loss) before income taxes (benefit)		35,737		5,678		(5,917)		35,498
Income taxes (benefit)		10,626		2,271		(1,806)		11,091
Net income (loss)	$	25,111	$	3,407	$	(4,111)	$	24,407
Total assets	$	2,886,539	$	89,242	$	(90,957)	$	2,884,824

December 31, 2014
Net interest income (expense)	$	66,449	$	—	$	(1,851)	$	64,598
Provision for loan losses		92		—		—		92
Noninterest income		13,343		—		7,098		20,441
Noninterest expense		63,351		—		6,129		69,480
Income (loss) before income taxes (benefit)		16,349		—		(882)		15,467
Income taxes (benefit)		5,181		—		(530)		4,651
Net income (loss)	$	11,168	$	—	$	(352)	$	10,816
Total assets	$	2,710,476	$	119,649	$	(153,511)	$	2,676,614

Schedule of intangible assets

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


	2016						2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Total		Amount		Amortization		Total
Core deposit intangibles	$	20,542	$	(16,181)	$	4,361	$	20,542	$	(14,471)	$	6,071
Trust relationship intangibles		5,471		(2,645)		2,826		3,141		(2,208)		933
Total intangible assets	$	26,013	$	(18,826)	$	7,187	$	23,683	$	(16,679)	$	7,004

Schedule of estimated future amortization expense of intangible assets

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


	Amount
Year ending December 31,
2017	$	1,827
2018		1,247
2019		913
2020		597
2021		446
Thereafter		2,157
Total	$	7,187

DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2016

DERIVATIVE INSTRUMENTS

Schedule of derivative instruments, fair value and notional amounts


	Notional Amount				Fair Value Gain
	2016		2015		2016		2015
Derivative Instruments (included in Other Assets):
Interest rate lock commitments	$	264,359	$	257,023	$	6,253	$	6,029
Forward commitments to sell mortgage-backed securities		301,788		—		125		—
Total	$	566,147	$	257,023	$	6,378	$	6,029


	Notional Amount				Fair Value Loss
	2016		2015		2016		2015
Derivative Instruments (included in Other Liabilities):
Forward commitments to sell mortgage-backed securities	$	—	$	278,313	$	—	$	2

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2016

Deposits [Abstract]

Schedule Of interest and non interest bearing deposits

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


	2016		2015
Noninterest-bearing demand	$	562,333	$	543,401
Interest-bearing:
Checking		656,248		621,925
Money market		399,851		377,654
Savings		166,910		155,778
Time		619,024		668,890
Total deposits	$	2,404,366	$	2,367,648

Schedule of maturities of time deposits

As of December 31, 2016, the scheduled maturities of time deposits are as follows (in thousands):


	Amount
Year ending December 31,
2017	$	334,631
2018		213,568
2019		55,837
2020		6,288
2021		8,698
Thereafter		2
Total	$	619,024

SHORT-TERM BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2016

SHORT-TERM BORROWINGS

Schedule of short term borrowings

The following table presents the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2016 and 2015 (in thousands):


	Repurchase Agreements
	2016			2015
Outstanding at period-end	$	131,557		$	107,538
Average amount outstanding		130,228			123,447
Maximum amount outstanding at any month end		168,369			147,542
Weighted average interest rate:
During period		0.23	%		0.19	%
End of period		0.21	%		0.21	%

FHLB ADVANCES AND OTHER BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2016

FHLB ADVANCES AND OTHER BORROWINGS

Schedule of Federal Home Loan Bank (FHLB) advances

The following table summarizes our FHLB advances and other borrowings as of December 31, 2016 and 2015 (in thousands):


	2016		2015
FHLB advances – fixed rate, fixed term, at rates averaging 0.89% and 0.93%, respectively, at December 31, 2016 and 2015, respectively – maturing through August 2023	$	237,500	$	40,000
Obligations under capital leases – implicit interest rate of 1.70% – maturing through July 2018		18		178
Total FHLB advances and other borrowings	$	237,518	$	40,178

Schedule of payments over the next five years

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


	Amount
2017	$	62,514
2018		50,004
2019		—
2020		—
2021		50,000
Thereafter		75,000
Total	$	237,518

SUBORDINATED DEBT (Tables)

12 Months Ended

Dec. 31, 2016

SUBORDINATED DEBT

Schedule of summary of company's subordinated debt

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


	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		39,729		39,659
Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025		14,779		14,752
Total subordinated debt	$	54,508	$	61,859

TRUST PREFERRED DEBENTURES (Tables)

12 Months Ended

Dec. 31, 2016

TRUST PREFERRED DEBENTURES.

Summary of trust preferred debentures

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


	2016		2015

Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 3.74% and 3.17%, at December 31, 2016 and 2015, respectively – $3,000 maturing January 23, 2034	$	1,996	$	1,932
Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 3.63% and 3.07% at December 31, 2016 and 2015, respectively – $10,000 maturing April 23, 2034		9,957		9,954
LSHC Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 2.71% and 2.26% at December 31, 2016 and 2015, respectively – $20,000 maturing December 31, 2036		13,141		13,001
LSHC Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 2.42% and 1.92% at December 31, 2016 and 2015, respectively – $20,000 maturing September 6, 2037		12,311		12,170
Total trust preferred debentures	$	37,405	$	37,057

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

INCOME TAXES

Schedule of components of income taxes

The components of income taxes for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):


	2016		2015		2014
Federal:
Current	$	1,718	$	3,500	$	217
Deferred		11,381		5,604		2,970
State:
Current		2,630		1,117		370
Deferred		3,160		870		1,094
Total income tax expense	$	18,889	$	11,091	$	4,651

Schedule of reconciliation of income tax expense

The Company’s income tax expense differed from the statutory federal rate of 35% for the years ended December 31, 2016, 2015 and 2014 as follows (in thousands):


	2016		2015		2014
Expected income taxes	$	17,648	$	12,424	$	5,414
Less income tax effect of:
Tax exempt interest		(1,670)		(1,934)		(1,809)
Interest expense disallowance		33		29		38
State tax, net of federal benefit		3,132		1,292		1,540
Increase in cash surrender value of life insurance policies		(1,007)		(516)		(373)
Indemnification income		—		(311)		—
Valuation allowance		631		—		—
Other		122		107		(159)
Actual income tax expense	$	18,889	$	11,091	$	4,651

Schedule of Deferred tax (liabilities) assets, net


	2016		2015
Assets:
Allowance for loan losses	$	5,766	$	6,435
Deferred compensation		2,136		2,029
Loans acquired in FDIC assisted transactions		—		3,878
Investments acquired in FDIC assisted transactions		—		3,504
Loans		1,972		2,889
Write-down of other real estate owned		70		1,758
Tax credits		3,106		3,076
Nonaccrual interest		1,007		727
Unrealized loss on securities		387		—
Intangible assets		292		—
Stock compensation		689		268
Other, net		777		2,160
Deferred tax assets		16,202		26,724
Valuation allowance		(631)		—
Deferred tax assets, net of valuation allowance		15,571		26,724
Liabilities:
Premises and equipment		1,268		2,414
Unrealized gain on securities		—		4,061
Mortgage servicing rights		15,092		12,084
Fair value adjustment on trust preferred debentures		6,023		6,387
Federal Home Loan Bank stock dividends		227		235
Indemnification asset due from FDIC		—		(82)
Deferred loan fees, net of costs		136		103
Intangible assets		—		26
Accounting method changes		1,156		—
Other, net		267		—
Deferred tax liabilities		24,169		25,228
Deferred tax (liabilities) assets, net	$	(8,598)	$	1,496

STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2016

STOCK BASED COMPENSATION

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


	2016		2015		2014
Dividend yield	3.00	%	3.14	%	3.36	%
Expected volatility	16.98		16.94		21.80
Risk free interest rate	1.64		1.93		1.90
Expected life	6.25	years	6.25	years	6.25	years

Summary of our stock option plan and changes made


	2016					2015
				Weighted					Weighted
		Weighted		average			Weighted		average
		average		remaining			average		remaining
		exercise		contractual			exercise		contractual
	Shares	price		life		Shares	price		life
Options outstanding, beginning of year	1,233,606	$	17.52			1,115,841	$	16.57
Options granted	182,118		26.15			176,093		22.81
Options exercised	(66,024)		16.01			(39,448)		14.15
Options forfeited	(30,441)		20.15			(18,880)		18.00
Options outstanding, end of year	1,319,259	$	18.73	6.3	years	1,233,606	$	17.52	6.8	years
Options exercisable	729,483	$	16.37	4.6	years	667,808	$	15.68	5.0	years
Options vested and expected to vest	1,245,713	$	18.56	6.2	years	1,158,706	$	17.37	6.6	years

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


		Weighted
		average
		grant date
Stock Options	Shares	fair value
Nonvested at December 31, 2015	565,798	$	2.61
Granted	182,118		2.94
Vested	(132,184)		2.41
Forfeited	(25,956)		2.18
Nonvested at December 31, 2016	589,776	$	2.73

Summary of the activity for restricted stock awards


		Weighted
		average
	Number	grant date
	outstanding	fair value
Nonvested at December 31, 2015	73,147	$	20.21
Granted during the year	70,776		27.38
Vested during the year	(29,849)		19.14
Forfeited during the year	(5,427)		20.36
Nonvested at December 31, 2016	108,647	$	25.16

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2016

Per common share data

Schedule of basic and diluted earnings per common share

Presented below are the calculations for basic and diluted earnings per common share for the years ended December 31, 2016, 2015 and 2014 (in thousands, except for share and per share data):



	2016		2015		2014
Net income	$	31,542	$	24,324	$	10,816
Preferred stock dividends		—		—		(7,601)
Net income available to common equity		31,542		24,324		3,215
Common shareholder dividends		(9,797)		(7,642)		(3,465)
Unvested restricted stock award dividends		(56)		(50)		(47)
Undistributed earnings to unvested restricted stock awards		(110)		(108)		—
Undistributed earnings to common shareholders	$	21,579	$	16,524	$	(297)
Basic
Distributed earnings to common shareholders	$	9,797	$	7,642	$	3,465
Undistributed earnings to common shareholders		21,579		16,524		(297)
Total common shareholders earnings, basic	$	31,376	$	24,166	$	3,168
Diluted
Distributed earnings to common shareholders	$	9,797	$	7,642	$	3,465
Undistributed earnings to common shareholders		21,579		16,524		(297)
Total common shareholders earnings		31,376		24,166		3,168
Add back:
Undistributed earnings reallocated from unvested restricted stock awards		2		2		—
Total common shareholders earnings, diluted	$	31,378	$	24,168	$	3,168
Weighted average common shares outstanding, basic		14,130,552		11,902,455		5,945,615
Options and warrants		298,287		209,948		79,839
Weighted average common shares outstanding, diluted		14,428,839		12,112,403		6,025,454
Basic earnings per common share	$	2.22	$	2.03	$	0.53
Diluted earnings per common share		2.17		2.00		0.53

CAPITAL REQUIREMENTS (Tables)

12 Months Ended

Dec. 31, 2016

CAPITAL REQUIREMENTS

Schedule of actual and required capital amounts and ratios

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


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


	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)

12 Months Ended

Dec. 31, 2016

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured and recorded at fair value


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

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


	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 years ended December 31, 2016 and 2015 (in thousands):


	2016		2015
Impaired loans	$	2,459	$	1,589
Other real estate owned		247		114
Assets held for sale		1,646		—
Total loss on assets measured on a nonrecurring basis	$	4,352	$	1,703

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

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


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

(1)

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

The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2015 (in thousands).


	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 December 31, 2016 and 2015 (in thousands):


	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	$	189,543	$	189,543	$	189,543	$	—	$	—
Federal funds sold		1,173		1,173		1,173		—		—
Investment securities available for sale		246,339		246,339		75,901		162,957		7,481
Investment securities held to maturity		78,672		81,952		—		81,952		—
Nonmarketable equity securities		19,485		19,485		—		19,485		—
Loans, net		2,305,114		2,305,206		—		—		2,305,206
Loans held for sale		70,565		70,565		—		70,565		—
Accrued interest receivable		8,202		8,202		—		8,202		—
Interest rate lock commitments		6,253		6,253		—		6,253		—
Forward commitments to sell mortgage-backed securities		125		125		—		125		—
Liabilities
Deposits	$	2,404,366	$	2,404,231	$	—	$	2,404,231	$	—
Short-term borrowings		131,557		131,557		—		131,557		—
FHLB and other borrowings		237,518		236,736		—		236,736		—
Subordinated debt		54,508		49,692		—		49,692		—
Trust preferred debentures		37,405		33,054		—		33,054		—
Accrued interest payable		1,045		1,045		—		1,045		—


	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		—
Forward commitments to sell mortgage-backed securities		2		2		—		2		—
Interest rate swap agreement		126		126		—		126		—

- Definition

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

+ References + Details

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables)

12 Months Ended

Dec. 31, 2016

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Projected minimum rental payments under leases

The projected minimum rental payments under the terms of the leases as of December 31, 2016 are as follows (in thousands):


	Amount
Year ending December 31:
2017	$	2,415
2018		2,248
2019		2,023
2020		1,919
2021		1,832
Thereafter		5,122
Total estimated lease payments	$	15,559

Schedule of Loan Commitments

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


	2016		2015
Commitments to extend credit	$	483,345	$	495,506
Financial guarantees – standby letters of credit		89,233		31,029

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2016

SEGMENT INFORMATION

Schedule of segment financial information

Selected business segment financial information as of and for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):


			Commercial FHA
			Origination and
	Banking		Servicing		Other		Total
December 31, 2016
Net interest income (expense)	$	109,950	$	1,003	$	(5,699)	$	105,254
Provision for loan losses		5,591		—		—		5,591
Noninterest income		47,646		22,979		1,432		72,057
Noninterest expense		100,062		15,104		6,132		121,298
Income (loss) before income taxes (benefit)		51,943		8,878		(10,399)		50,422
Income taxes (benefit)		17,129		3,332		(1,572)		18,889
Net income (loss)	$	34,814	$	5,546	$	(8,827)	$	31,533
Total assets	$	3,225,765	$	129,943	$	(121,985)	$	3,233,723

December 31, 2015
Net interest income (expense)	$	107,825	$	1,762	$	(4,680)	$	104,907
Provision for loan losses		11,127		—		—		11,127
Noninterest income		34,751		20,148		4,583		59,482
Noninterest expense		95,712		16,232		5,820		117,764
Income (loss) before income taxes (benefit)		35,737		5,678		(5,917)		35,498
Income taxes (benefit)		10,626		2,271		(1,806)		11,091
Net income (loss)	$	25,111	$	3,407	$	(4,111)	$	24,407
Total assets	$	2,886,539	$	89,242	$	(90,957)	$	2,884,824

December 31, 2014
Net interest income (expense)	$	66,449	$	—	$	(1,851)	$	64,598
Provision for loan losses		92		—		—		92
Noninterest income		13,343		—		7,098		20,441
Noninterest expense		63,351		—		6,129		69,480
Income (loss) before income taxes (benefit)		16,349		—		(882)		15,467
Income taxes (benefit)		5,181		—		(530)		4,651
Net income (loss)	$	11,168	$	—	$	(352)	$	10,816
Total assets	$	2,710,476	$	119,649	$	(153,511)	$	2,676,614

PARENT COMPANY ONLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2016

PARENT COMPANY ONLY FINANCIAL INFORMATION

Schedule of condensed balance sheets


Condensed Balance Sheets
(dollars in thousands)
	December 31,
	2016		2015
Assets:
Cash	$	38,803	$	8,318
Investment in common stock of subsidiaries		380,474		325,682
Accrued income taxes receivable		17		2,657
Other assets		2,047		3,644
Total assets	$	421,341	$	340,301
Liabilities:
Subordinated debt	$	54,508	$	61,859
Trust preferred debentures		37,405		37,057
Deferred tax liabilities, net		5,037		5,087
Other liabilities		2,621		3,418
Total liabilities		99,571		107,421
Shareholders’ equity		321,770		232,880
Total liabilities and shareholders’ equity	$	421,341	$	340,301

Schedule of condensed Statement of income


Condensed Statements of Income
(dollars in thousands)

	Years ended December 31,
	2016		2015		2014
Dividends from subsidiaries	$	—	$	14,500	$	13,600
Other income		428		1,070		—
Interest expense		(5,699)		(4,680)		(1,851)
Other expense		(1,130)		(132)		(60)
(Loss) income before income taxes and equity in undistributed income (loss) of subsidiaries		(6,401)		10,758		11,689
Equity in undistributed income (loss) of subsidiaries		36,256		11,760		(1,403)
Income before income taxes		29,855		22,518		10,286
Income tax benefit		1,687		1,806		530
Net income	$	31,542	$	24,324	$	10,816

Schedule of condensed cash flows


Condensed Statements of Cash Flows
(dollars in thousands)

	Years ended December 31,
	2016		2015		2014
Cash flows from operating activities:
Net income	$	31,542	$	24,324	$	10,816
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries		(36,256)		(11,760)		1,403
Amortization of restricted stock awards		555		517		468
Compensation expense for stock option grants		492		413		240
Change in other assets		4,237		(3,559)		576
Change in other liabilities		225		(8,426)		(1,065)
Net cash provided by operating activities		795		1,509		12,438
Cash flows from investing activities:
Net cash acquired in acquisition		—		(20,053)		1,500
Capital injection to subsidiaries		(25,250)		(30,000)		—
Net cash (used in) provided by investing activities		(25,250)		(50,053)		1,500
Cash flows from financing activities:
Payment made on subordinated debt		(8,000)		—		—
Proceeds from issuance of subordinated debt, net of issuance costs		—		55,325		—
Proceeds from other borrowings		—		—		14,000
Payments made on other borrowings		—		(14,000)		(15,938)
Cash dividends paid on common stock		(9,853)		(7,692)		(3,512)
Cash dividends paid on preferred stock		—		—		(4,254)
Proceeds from issuance of common stock in initial public offering, net of issuance costs		71,475		—		—
Proceeds from issuance of common stock under employee benefit plans		1,318		470		215
Net cash provided by (used in) financing activities		54,940		34,103		(9,489)
Net increase (decrease) in cash		30,485		(14,441)		4,449
Cash:
Beginning of year		8,318		22,759		18,310
End of year	$	38,803	$	8,318	$	22,759
Supplemental disclosures of noncash investing and financing activities:
Conversion of Series C preferred stock into common stock	$	—	$	—	$	23,600
Conversion of Series D preferred stock into common stock		—		—		22,470
Conversion of Series E preferred stock into common stock		—		—		6,300
Conversion of Series F preferred stock into common stock		—		—		5,000
Issuance of common stock for preferred dividends		—		—		2,903
Cash portion of merger consideration accrued for at year-end		—		—		20,053
Issuance of common stock for private placement		—		—		16,156

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of unaudited quartely condensed financial information

The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2016 and 2015 (in thousands, except for per share data):


	2016 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,967	$	32,115	$	31,186	$	29,981
Interest expense		3,926		4,126		3,921		4,022
Net interest income		24,041		27,989		27,265		25,959
Provision for loan losses		1,125		629		1,392		2,445
Net interest income after provision for loan losses		22,916		27,360		25,873		23,514
Noninterest income		12,618		14,016		14,937		30,486
Noninterest expense		27,639		30,903		28,663		34,093
Income before income taxes		7,895		10,473		12,147		19,907
Income taxes		2,777		3,683		4,102		8,327
Net income		5,118		6,790		8,045		11,580
Less: net (loss) income attributable to noncontrolling interest in subsidiaries		(1)		1		(6)		(3)
Net income attributable to Midland States Bancorp, Inc.	$	5,119	$	6,789	$	8,051	$	11,583
Per common share data:
Basic earnings per common share	$	0.43	$	0.51	$	0.51	$	0.74
Diluted earnings per common share		0.42		0.50		0.51		0.72


	2015 Quarter Ended
	March 31		June 30		September 30		December 31
Interest income	$	27,305	$	31,242	$	28,949	$	30,300
Interest expense		2,604		2,925		3,512		3,848
Net interest income		24,701		28,317		25,437		26,452
Provision for loan losses		997		2,379		6,699		1,052
Net interest income after provision for loan losses		23,704		25,938		18,738		25,400
Noninterest income		18,022		14,197		14,464		12,799
Noninterest expense		31,546		30,703		27,823		27,692
Income before income taxes		10,180		9,432		5,379		10,507
Income taxes		3,590		2,762		1,928		2,811
Net income		6,590		6,670		3,451		7,696
Less: net income attributable to noncontrolling interest in subsidiaries		59		17		6		1
Net income attributable to Midland States Bancorp, Inc.	$	6,531	$	6,653	$	3,445	$	7,695
Per common share data:
Basic earnings per common share	$	0.55	$	0.56	$	0.29	$	0.64
Diluted earnings per common share		0.54		0.55		0.28		0.63

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)				12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 06, 2016 USD ($) shares	Jun. 06, 2016 USD ($) shares	May 24, 2016 USD ($) shares	Dec. 31, 2016 USD ($) shares	Oct. 03, 2016 USD ($)	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 shares
Initial Public Offering
Proceeds from Issuance Initial Public Offering	$ 71,500,000
Common stock, shares issued \| shares				15,483,499		11,797,404	138,239
Indemnification Asset Due from FDIC
Early termination, consideration paid					$ 565,000
Reversal of accrued loss share liabilities					214,000
Reversal of accrued loss share liabilities, after tax					$ 225,000
Liabilities for unfunded commitments				$ 302,000		$ 220,000
Minimum
Lease Financing
Percentage of residual value				3
Goodwill and Intangible Assets
Other intangible assets amortized over a period				1 year
Maximum
Lease Financing
Percentage of residual value				15
Goodwill and Intangible Assets
Other intangible assets amortized over a period				20 years
Premises \| Minimum
Premises and Equipment
Estimated useful lives				10 years
Premises \| Maximum
Premises and Equipment
Estimated useful lives				40 years
Equipment \| Minimum
Premises and Equipment
Estimated useful lives				3 years
Equipment \| Maximum
Premises and Equipment
Estimated useful lives				10 years
IPO
Initial Public Offering
Proceeds from Issuance Initial Public Offering			$ 67,000,000
Common stock, shares issued \| shares			3,044,252
Over-Allotment Option [Member]
Initial Public Offering
Proceeds from Issuance Initial Public Offering		$ 12,000,000
Common stock, shares issued \| shares	545,813	545,813

ACQUISITIONS - Sterling (Details) - USD ($) $ in Thousands	Nov. 10, 2016	Dec. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill		$ 48,836	$ 46,519
Intangibles	$ 2,300
Sterling
Business Acquisition [Line Items]
Total Purchase consideration	400,000
Consideration paid in cash	5,200
Goodwill	2,300
Intangibles	$ 2,300
Amortization period	20 years

ACQUISITIONS - LSHC (Details)	Dec. 31, 2014 USD ($) item shares	Dec. 31, 2016 USD ($)	Nov. 10, 2016 USD ($)	Dec. 31, 2015 USD ($)
Business Acquisition [Line Items]
Goodwill		$ 48,836,000		$ 46,519,000
Intangibles			$ 2,300,000
LSHC \| Banking
Business Acquisition [Line Items]
Office location acquired \| item	10
LSHC \| Loan Production
Business Acquisition [Line Items]
Office location acquired \| item	3
LSHC \| Branch
Business Acquisition [Line Items]
Office location acquired \| item	1
Heartland \| LSHC
Business Acquisition [Line Items]
Amortization period	10 years
Amount of trust preferred debentures	$ 40,000,000
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
LFC \| LSHC
Business Acquisition [Line Items]
Total Purchase consideration	67,300,000
Consideration paid in cash	$ 20,100,000
Number of common stock shares issued \| shares	2,224,091
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		$ 350,000		$ 180,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Classified (Details) - USD ($)		12 Months Ended
	Oct. 04, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Investment securities classified as available for sale
Amortized cost		$ 247,525,000	$ 226,665,000
Gross unrealized gains		848,000	11,885,000
Gross unrealized losses		2,034,000	1,923,000
Fair value		246,339,000	236,627,000
Available-for-sale Securities		246,339,000	236,627,000
Available-for-sale Securities, Gross Realized Gains		15,500,000	368,000	$ 173,000
U.S. Treasury securities
Investment securities classified as available for sale
Amortized cost		75,973,000	48,483,000
Gross unrealized gains			1,000
Gross unrealized losses		72,000	182,000
Fair value		75,901,000	48,302,000
Available-for-sale Securities		75,901,000	48,302,000
Government sponsored entity debt securities
Investment securities classified as available for sale
Amortized cost		7,653,000	9,404,000
Gross unrealized gains		57,000	58,000
Gross unrealized losses		22,000	8,000
Fair value		7,688,000	9,454,000
Available-for-sale Securities		7,688,000	9,454,000
Agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost		90,629,000	66,902,000
Gross unrealized gains		373,000	835,000
Gross unrealized losses		932,000	210,000
Fair value		90,070,000	67,527,000
Available-for-sale Securities		90,070,000	67,527,000
Non-agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost		1,000	2,000
Fair value		1,000	2,000
Available-for-sale Securities		1,000	2,000
Covered non-agency mortgage-backed securities
Investment securities classified as available for sale
Amortized cost			66,397,000
Gross unrealized gains			10,886,000
Gross unrealized losses			1,304,000
Fair value	$ 72,100,000		75,979,000
Available-for-sale Securities	72,100,000		75,979,000
Available-for-sale Securities, Gross Realized Gains	$ 14,300,000
State and municipal securities
Investment securities classified as available for sale
Amortized cost		25,826,000	15,441,000
Gross unrealized gains		15,000	77,000
Gross unrealized losses		567,000	24,000
Fair value		25,274,000	15,494,000
Available-for-sale Securities		25,274,000	15,494,000
Corporate securities
Investment securities classified as available for sale
Amortized cost		47,443,000	20,036,000
Gross unrealized gains		403,000	28,000
Gross unrealized losses		441,000	195,000
Fair value		47,405,000	19,869,000
Available-for-sale Securities		$ 47,405,000	$ 19,869,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Continuous unrealized loss position (Details)	12 Months Ended
	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($) item
Securities available for sale:
Less than 12 Months, Fair value	$ 169,216,000	$ 96,287,000
Less than 12 Months, Unrealized loss	1,925,000	1,663,000
12 Months or more, Fair value	8,714,000	4,988,000
12 Months or more, Unrealized loss	109,000	260,000
Total, Fair value	177,930,000	101,275,000
Total, Unrealized loss	$ 2,034,000	$ 1,923,000
Unrealized loss
Number of securities, unrealized losses \| item	107	54
Aggregate depreciation	1.13%	1.86%
U.S. Treasury securities
Securities available for sale:
Less than 12 Months, Fair value	$ 75,901,000	$ 42,301,000
Less than 12 Months, Unrealized loss	72,000	182,000
Total, Fair value	75,901,000	42,301,000
Total, Unrealized loss	72,000	182,000
Government sponsored entity debt securities
Securities available for sale:
Less than 12 Months, Fair value	4,107,000	4,229,000
Less than 12 Months, Unrealized loss	22,000	8,000
Total, Fair value	4,107,000	4,229,000
Total, Unrealized loss	22,000	8,000
Agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value	57,882,000	19,404,000
Less than 12 Months, Unrealized loss	930,000	167,000
12 Months or more, Fair value	402,000	1,932,000
12 Months or more, Unrealized loss	2,000	43,000
Total, Fair value	58,284,000	21,336,000
Total, Unrealized loss	$ 932,000	210,000
Non-agency mortgage-backed securities
Other than temporary impairment:
Number of other than temporary impairment securities \| item			1
Other than temporary impairment, recognized as losses			$ 20,000
Covered non-agency mortgage-backed securities
Securities available for sale:
Less than 12 Months, Fair value		14,149,000
Less than 12 Months, Unrealized loss		1,114,000
12 Months or more, Fair value		1,431,000
12 Months or more, Unrealized loss		190,000
Total, Fair value		15,580,000
Total, Unrealized loss		$ 1,304,000
Other than temporary impairment:
Number of other than temporary impairment securities \| item	3	3	1
Other than temporary impairment, recognized as losses	$ 824,000	$ 461,000	$ 170,000
State and municipal securities
Securities available for sale:
Less than 12 Months, Fair value	20,215,000	4,959,000
Less than 12 Months, Unrealized loss	567,000	20,000
12 Months or more, Fair value		812,000
12 Months or more, Unrealized loss		4,000
Total, Fair value	20,215,000	5,771,000
Total, Unrealized loss	567,000	24,000
Corporate securities
Securities available for sale:
Less than 12 Months, Fair value	11,111,000	11,245,000
Less than 12 Months, Unrealized loss	334,000	172,000
12 Months or more, Fair value	8,312,000	813,000
12 Months or more, Unrealized loss	107,000	23,000
Total, Fair value	19,423,000	12,058,000
Total, Unrealized loss	$ 441,000	$ 195,000

INVESTMENT SECURITIES AVAILABLE FOR SALE - Amortized cost and fair value (Details) - USD ($)		12 Months Ended
	Oct. 04, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Amortized cost of available-for-sale securities, by contractual maturity
Within one year		$ 75,030,000
One to five years		105,597,000
Five to ten years		52,866,000
After ten years		14,032,000
Total, single maturity date		247,525,000
Amortized cost		247,525,000	$ 226,665,000
Fair Value of available-for-sale securities, by contractual maturity
Within one year		75,008,000
One to five years		105,344,000
Five to ten years		52,625,000
After ten years		13,362,000
Total, single maturity date		246,339,000
Available-for-sale Securities, Total		246,339,000	236,627,000
Available-for-sale Securities		246,339,000	236,627,000
Available-for-sale Securities, Gross Realized Gains		15,500,000	368,000	$ 173,000
Gross realized gains/losses
Gross realized gains		15,500,000	368,000	173,000
Gross realized losses		837,000	175,000	$ 96,000
Agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost		90,629,000	66,902,000
Fair Value of available-for-sale securities, by contractual maturity
Available-for-sale Securities, Total		90,070,000	67,527,000
Available-for-sale Securities		90,070,000	67,527,000
Non-agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost		1,000	2,000
Fair Value of available-for-sale securities, by contractual maturity
Available-for-sale Securities, Total		1,000	2,000
Available-for-sale Securities		$ 1,000	2,000
Covered non-agency mortgage-backed securities
Amortized cost of available-for-sale securities, by contractual maturity
Amortized cost			66,397,000
Fair Value of available-for-sale securities, by contractual maturity
Available-for-sale Securities, Total	$ 72,100,000		75,979,000
Available-for-sale Securities	72,100,000		$ 75,979,000
Available-for-sale Securities, Gross Realized Gains	14,300,000
Gross realized gains/losses
Gross realized gains	$ 14,300,000

INVESTMENT SECURITIES HELD TO MATURITY - Classified (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost	$ 78,672	$ 87,521
Fair value	81,952	92,816
State and municipal securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost	78,672	87,521
Gross unrealized gains	3,517	5,364
Gross unrealized losses	237	69
Fair value	$ 81,952	$ 92,816

INVESTMENT SECURITIES HELD TO MATURITY - Continuous unrealized loss position (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Unrealized loss
Number of securities, unrealized losses \| item	47	25
Aggregate depreciation	1.40%	1.08%
State and municipal securities
Securities held to maturity:
Less than 12 Months, Fair value	$ 13,991	$ 3,573
Less than 12 Months, Unrealized loss	140	24
12 Months or more, Fair value	2,699	2,743
12 Months or more, Unrealized loss	97	45
Total, Fair value	16,690	6,316
Total, Unrealized loss	$ 237	$ 69

INVESTMENT SECURITIES HELD TO MATURITY - Amortized cost and fair value (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Amortized cost of held-to-maturity securities, by contractual maturity
Within one year	$ 861
One to five years	22,915
Five to ten years	42,080
After ten years	12,816
Amortized cost	78,672	$ 87,521
Fair Value of held-to-maturity securities, by contractual maturity
Within one year	865
One to five years	23,537
Five to ten years	44,547
After ten years	13,003
Fair value	$ 81,952	$ 92,816

LOANS - Summary of loans (Details) - USD ($) $ in Thousands	12 Months Ended
LOANS - Summary of loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Summary of loans
Total loans	$ 2,319,976	$ 1,995,589
Loans, additional information
Net deferred loan fees	3,100	5,800
Unearned discounts	20,700	15,700
Loans held for sale	70,565	54,413
Proceeds from sales of loans held for sale	1,184,739	1,002,770	$ 88,562
Directors, executive officers, principal shareholders and affiliates
Loans to certain directors, executive officers, principal shareholders and their affiliates:
Loans outstanding to related parties	26,500	39,200
New loans to related parties and other additions	16,100	36,200
Repayments from related parties and other reductions	28,800	15,000
Loans and Leases Receivable, Related Parties, Collections	28,800	15,000
Commercial loan portfolio
Summary of loans
Total loans	1,604,767	1,526,623
Commercial loan portfolio \| Commercial
Summary of loans
Total loans	457,827	499,573
Commercial loan portfolio \| Non residential real estate
Summary of loans
Total loans	969,615	876,784
Commercial loan portfolio \| Construction and land development
Summary of loans
Total loans	$ 177,325	150,266
Other loan portfolio \| Maximum
Loans, additional information
Term of lease	4 years
Other loan portfolio \| Residential real estate
Summary of loans
Total loans	$ 253,713	163,224
Other loan portfolio \| Consumer
Summary of loans
Total loans	270,017	161,512
Other loan portfolio \| Lease financing
Summary of loans
Total loans	191,479	144,230
Commercial and Residential Loan
Loans, additional information
Loans held for sale	70,600	54,400
Proceeds from sales of loans held for sale	$ 1,180,000	$ 1,000,000

LOANS - Risk category (Details) $ in Thousands	12 Months Ended
LOANS - Risk category (Details) $ in Thousands	Dec. 31, 2016 USD ($) region	Dec. 31, 2015 USD ($)
Risk category
Number of main regions \| region	4
Total loans	$ 2,319,976	$ 1,995,589
Commercial loan portfolio
Risk category
Total loans	1,604,767	1,526,623
Non-PCI loans
Risk category
Total loans	2,291,720	1,957,112
Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	1,583,380	1,496,396
Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	1,511,506	1,424,957
Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	19,665	40,866
Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	34,277	11,551
Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	10,725	14,546
Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	7,207	4,476
Non-PCI loans \| Other loan portfolio
Risk category
Total loans	708,340	460,716
Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	701,767	456,112
Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	6,573	4,604
Commercial \| Commercial loan portfolio
Risk category
Total loans	457,827	499,573
Commercial \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	454,310	493,445
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	426,560	467,355
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	10,930	16,589
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	12,649	3,448
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	3,559	5,702
Commercial \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	612	351
Non residential real estate \| Commercial loan portfolio
Risk category
Total loans	969,615	876,784
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	963,895	862,744
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	925,244	821,314
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio \| Special mention
Risk category
Total loans	8,735	23,737
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio \| Substandard
Risk category
Total loans	21,178	8,103
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio \| Substandard - nonaccrual
Risk category
Total loans	7,145	8,844
Non residential real estate \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	1,593	746
Construction and land development \| Commercial loan portfolio
Risk category
Total loans	177,325	150,266
Construction and land development \| Non-PCI loans \| Commercial loan portfolio
Risk category
Total loans	165,175	140,207
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Acceptable credit quality
Risk category
Total loans	159,702	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 \| Substandard - nonaccrual
Risk category
Total loans	21
Construction and land development \| Non-PCI loans \| Commercial loan portfolio \| Not graded
Risk category
Total loans	5,002	3,379
Residential real estate \| Other loan portfolio
Risk category
Total loans	253,713	163,224
Residential real estate \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	247,156	155,266
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	242,127	151,111
Residential real estate \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	5,029	4,155
Consumer \| Other loan portfolio
Risk category
Total loans	270,017	161,512
Consumer \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	269,705	161,220
Consumer \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	269,492	161,169
Consumer \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	213	51
Lease financing \| Other loan portfolio
Risk category
Total loans	191,479	144,230
Lease financing \| Non-PCI loans \| Other loan portfolio
Risk category
Total loans	191,479	144,230
Lease financing \| Non-PCI loans \| Other loan portfolio \| Performing
Risk category
Total loans	190,148	143,832
Lease financing \| Non-PCI loans \| Other loan portfolio \| Impaired
Risk category
Total loans	$ 1,331	$ 398

LOANS - Impaired Loans (Details) - USD ($)	12 Months Ended
LOANS - Impaired Loans (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Interest income :
Interest income recognized on nonaccrual loans	$ 0	$ 0	$ 0
Additional interest income that would have been recorded had they been current	718,000	992,000	615,000
Recognized interest income on loans modified under troubled debt restructurings	339,000	267,000	$ 222,000
Non-PCI loans
Summay of impaired loans
Nonaccrual loans	16,871,000	18,462,000
Loans modified under troubled debt restructuring	17,952,000	11,042,000
Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	16,871,000	18,462,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	2,405,000	1,142,000
Loans modified under troubled debt restructuring	12,327,000	5,287,000
Total impaired loans	31,603,000	24,891,000
PCI loans
Summay of impaired loans
Total impaired loans	28,300,000	38,500,000
Commercial \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	3,559,000	5,702,000
Loans modified under troubled debt restructuring	611,000	43,000
Commercial \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	3,559,000	5,702,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	2,378,000	865,000
Loans modified under troubled debt restructuring	611,000	3,000
Total impaired loans	6,548,000	6,570,000
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	7,145,000	8,844,000
Loans modified under troubled debt restructuring	16,351,000	10,205,000
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	7,145,000	8,844,000
Loans modified under troubled debt restructuring	11,253,000	4,873,000
Total impaired loans	18,398,000	13,717,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	21,000
Loans modified under troubled debt restructuring	63,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	21,000
Loans modified under troubled debt restructuring	63,000
Total impaired loans	84,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	4,629,000	3,516,000
Loans modified under troubled debt restructuring	927,000	794,000
Residential real estate \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	4,629,000	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	400,000	411,000
Total impaired loans	5,029,000	4,155,000
Consumer \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	187,000	2,000
Consumer \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	187,000	2,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	26,000	49,000
Total impaired loans	213,000	51,000
Lease financing \| Other loan portfolio \| Non-PCI loans
Summay of impaired loans
Nonaccrual loans	1,330,000	398,000
Lease financing \| Other loan portfolio \| Non-PCI loans \| Impaired
Summay of impaired loans
Nonaccrual loans	1,330,000	398,000
Accruing loans contractually past due 90 days or more as to interest or principal payments	1,000
Total impaired loans	$ 1,331,000	$ 398,000

LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Impaired loans (excluding PCI loans) by portfolio
Difference between the recorded investment and unpaid principal balance	$ 6,700	$ 5,200
Impaired \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	11,382	18,641
With a valuation allowance, Unpaid Principal Balance	12,228	22,523
With a valuation allowance, Average Annual Recorded Investment	11,774	19,994
With a related valuation allowance, Interest Income Recognized while on Impaired Status	358	283
With no related valuation allowance, Recorded Investment	20,221	6,250
With no related valuation allowance, Unpaid Principal Balance	26,113	7,610
With no related valuation allowance, Average Annual Recorded Investment	23,656	6,334
With no related valuation allowance, Interest Income Recognized while on Impaired Status	20	2
Total impaired loans	31,603	24,891
Total, Unpaid Principal Balance	38,341	30,133
Total, Related Valuation Allowance	2,182	2,994
Total, Average Annual Recorded Investment	35,430	26,328
Total, Interest Income Recognized While on Impaired Status	378	285
Commercial \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	3,877	5,789
With a valuation allowance, Unpaid Principal Balance	3,888	8,760
With a valuation allowance, Average Annual Recorded Investment	3,974	7,088
With a related valuation allowance, Interest Income Recognized while on Impaired Status	15
With no related valuation allowance, Recorded Investment	2,671	781
With no related valuation allowance, Unpaid Principal Balance	7,567	781
With no related valuation allowance, Average Annual Recorded Investment	5,604	781
With no related valuation allowance, Interest Income Recognized while on Impaired Status	1
Total impaired loans	6,548	6,570
Total, Unpaid Principal Balance	11,455	9,541
Total, Related Valuation Allowance	882	1,797
Total, Average Annual Recorded Investment	9,578	7,869
Total, Interest Income Recognized While on Impaired Status	16
Non residential real estate \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	2,142	9,197
With a valuation allowance, Unpaid Principal Balance	2,331	9,489
With a valuation allowance, Average Annual Recorded Investment	2,379	9,225
With a related valuation allowance, Interest Income Recognized while on Impaired Status	306	267
With no related valuation allowance, Recorded Investment	16,256	4,520
With no related valuation allowance, Unpaid Principal Balance	17,058	5,840
With no related valuation allowance, Average Annual Recorded Investment	16,847	4,599
With no related valuation allowance, Interest Income Recognized while on Impaired Status	17
Total impaired loans	18,398	13,717
Total, Unpaid Principal Balance	19,389	15,329
Total, Related Valuation Allowance	309	514
Total, Average Annual Recorded Investment	19,226	13,824
Total, Interest Income Recognized While on Impaired Status	323	267
Construction and land development \| Impaired \| Commercial loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	84
With a valuation allowance, Unpaid Principal Balance	84	26
With a valuation allowance, Average Annual Recorded Investment	87
With a related valuation allowance, Interest Income Recognized while on Impaired Status	7
Total impaired loans	84
Total, Unpaid Principal Balance	84	26
Total, Related Valuation Allowance	8
Total, Average Annual Recorded Investment	87
Total, Interest Income Recognized While on Impaired Status	7
Residential real estate \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	3,735	3,206
With a valuation allowance, Unpaid Principal Balance	4,404	3,798
With a valuation allowance, Average Annual Recorded Investment	3,782	3,231
With a related valuation allowance, Interest Income Recognized while on Impaired Status	30	16
With no related valuation allowance, Recorded Investment	1,294	949
With no related valuation allowance, Unpaid Principal Balance	1,462	989
With no related valuation allowance, Average Annual Recorded Investment	1,179	954
With no related valuation allowance, Interest Income Recognized while on Impaired Status	2	2
Total impaired loans	5,029	4,155
Total, Unpaid Principal Balance	5,866	4,787
Total, Related Valuation Allowance	604	626
Total, Average Annual Recorded Investment	4,961	4,185
Total, Interest Income Recognized While on Impaired Status	32	18
Consumer \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	213	51
With a valuation allowance, Unpaid Principal Balance	190	52
With a valuation allowance, Average Annual Recorded Investment	221	52
With no related valuation allowance, Unpaid Principal Balance	26
With no related valuation allowance, Average Annual Recorded Investment	26
Total impaired loans	213	51
Total, Unpaid Principal Balance	216	52
Total, Related Valuation Allowance	23	7
Total, Average Annual Recorded Investment	247	52
Lease financing \| Impaired \| Other loan portfolio \| Non-PCI loans
Impaired loans (excluding PCI loans) by portfolio
With a valuation allowance, Recorded Investment	1,331	398
With a valuation allowance, Unpaid Principal Balance	1,331	398
With a valuation allowance, Average Annual Recorded Investment	1,331	398
Total impaired loans	1,331	398
Total, Unpaid Principal Balance	1,331	398
Total, Related Valuation Allowance	356	50
Total, Average Annual Recorded Investment	$ 1,331	$ 398

LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Aging Status of recorded investment
Total loans	$ 2,319,976	$ 1,995,589
Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	16,871	18,462
Total Past Due	30,043	29,724
Current	2,261,677	1,927,388
Total loans	2,291,720	1,957,112
Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	9,241	5,124
Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	1,526	4,996
Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	2,405	1,142
Commercial loan portfolio
Aging Status of recorded investment
Total loans	1,604,767	1,526,623
Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Total loans	1,583,380	1,496,396
Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Total loans	708,340	460,716
Commercial \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	457,827	499,573
Commercial \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	3,559	5,702
Total Past Due	9,401	10,774
Current	444,909	482,671
Total loans	454,310	493,445
Commercial \| Commercial loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	3,326	1,911
Commercial \| Commercial loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	138	2,296
Commercial \| Commercial loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	2,378	865
Non residential real estate \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	969,615	876,784
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	7,145	8,844
Total Past Due	8,580	11,121
Current	955,315	851,623
Total loans	963,895	862,744
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	648	288
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	787	1,989
Construction and land development \| Commercial loan portfolio
Aging Status of recorded investment
Total loans	177,325	150,266
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	21
Total Past Due	21	340
Current	165,154	139,867
Total loans	165,175	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
Residential real estate \| Other loan portfolio
Aging Status of recorded investment
Total loans	253,713	163,224
Residential real estate \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	4,629	3,516
Total Past Due	8,114	6,165
Current	239,042	149,101
Total loans	247,156	155,266
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	3,472	1,983
Residential real estate \| Other loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	13	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	270,017	161,512
Consumer \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	187	2
Total Past Due	2,502	889
Current	267,203	160,331
Total loans	269,705	161,220
Consumer \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	1,701	565
Consumer \| Other loan portfolio \| Non-PCI loans \| 60-89 Daya Past Due
Aging Status of recorded investment
Past Due	588	273
Consumer \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	26	49
Lease financing \| Other loan portfolio
Aging Status of recorded investment
Total loans	191,479	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans
Aging Status of recorded investment
Nonaccrual Loans	1,330	398
Total Past Due	1,425	435
Current	190,054	143,795
Total loans	191,479	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans \| 31-59 Days Past Due
Aging Status of recorded investment
Past Due	94	$ 37
Lease financing \| Other loan portfolio \| Non-PCI loans \| Accruing Loans past Due 90 Days or More
Aging Status of recorded investment
Past Due	$ 1

LOANS - TDRs by portfolio (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
TDRs by portfolio
TDRs, individually impaired for impairment	$ 28,432,000	$ 22,528,000
Allowance for loan losses on TDRs	203,000	109,000
Unfunded commitments	0	0
Minimum \| Performing
TDRs by portfolio
TDRs, individually impaired for impairment	50,000
Non-PCI loans
TDRs by portfolio
TDR's Accruing	12,327,000	5,287,000
TDR's Nonaccrual	5,625,000	5,755,000
Total	17,952,000	11,042,000
Commercial \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	611,000	3,000
TDR's Nonaccrual		40,000
Total	611,000	43,000
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	11,253,000	4,873,000
TDR's Nonaccrual	5,098,000	5,332,000
Total	16,351,000	10,205,000
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	63,000
Total	63,000
Residential real estate \| Other loan portfolio \| Non-PCI loans
TDRs by portfolio
TDR's Accruing	400,000	411,000
TDR's Nonaccrual	527,000	383,000
Total	$ 927,000	$ 794,000

LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan
Troubled debt restructurings:
Number of loans \| loan	8	1
Pre-modification outstanding balance	$ 11,098	$ 58
Post-modification outstanding balance	$ 10,956	$ 58
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan	1,000	1
Recorded balance	$ 28	$ 54
Commercial \| Commercial loan portfolio
Troubled debt restructurings:
Number of loans \| loan	3
Pre-modification outstanding balance	$ 685
Post-modification outstanding balance	$ 611
Non residential real estate \| Commercial loan portfolio
Troubled debt restructurings:
Number of loans \| loan	2	1
Pre-modification outstanding balance	$ 10,207	$ 58
Post-modification outstanding balance	$ 10,139	$ 58
Troubled debt restructurings that subsequently defaulted
Number of loans \| loan	1,000	1
Recorded balance	$ 28	$ 54
Residential real estate \| Other loan portfolio
Troubled debt restructurings:
Number of loans \| loan	3
Pre-modification outstanding balance	$ 206
Post-modification outstanding balance	$ 206

LOANS - Allowance for loan losses and recorded investment (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Changes in allowance for loan losses :
Beginning balance				$ 15,988,000				$ 12,300,000	$ 15,988,000	$ 12,300,000	$ 23,672,000
Provision for loan losses	$ 2,445,000	$ 1,392,000	$ 629,000	1,125,000	$ 1,052,000	$ 6,699,000	$ 2,379,000	997,000	5,591,000	11,127,000	92,000
Charge-offs									(7,736,000)	(9,657,000)	(12,096,000)
Recoveries									1,019,000	2,218,000	632,000
Net loan charge-offs									(6,717,000)	(7,439,000)	(11,464,000)
Ending balance	14,862,000				15,988,000				14,862,000	15,988,000	12,300,000
Non-PCI loans
Changes in allowance for loan losses :
Beginning balance				14,093,000				10,503,000	14,093,000	10,503,000	11,985,000
Provision for loan losses									6,425,000	11,061,000	300,000
Charge-offs									(7,668,000)	(9,565,000)	(2,271,000)
Recoveries									894,000	2,094,000	489,000
Net loan charge-offs									(6,774,000)	(7,471,000)	(1,782,000)
Ending balance	13,744,000				14,093,000				13,744,000	14,093,000	10,503,000
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)
Non-PCI loans \| Nonperforming, group of nonperforming loans
Changes in allowance for loan losses :
Charge-offs										(7,500,000)
Non-PCI loans \| Nonperforming financial instruments second single borrower
Changes in allowance for loan losses :
Charge-offs									(1,400,000)
PCI loans
Changes in allowance for loan losses :
Beginning balance				$ 1,895,000				$ 1,797,000	1,895,000	1,797,000	11,687,000
Provision for loan losses									(834,000)	66,000	(208,000)
Charge-offs									(68,000)	(92,000)	(9,825,000)
Recoveries									125,000	124,000	143,000
Net loan charge-offs									57,000	32,000	(9,682,000)
Ending balance	$ 1,118,000				$ 1,895,000				$ 1,118,000	$ 1,895,000	$ 1,797,000

LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015
Changes in allowance for loan losses :
Beginning balance				$ 15,988				$ 12,300	$ 15,988	$ 12,300	$ 23,672
Provision for loan losses	$ 2,445	$ 1,392	$ 629	1,125	$ 1,052	$ 6,699	$ 2,379	997	5,591	11,127	92
Charge-offs									(7,736)	(9,657)	(12,096)
Recoveries									1,019	2,218	632
Ending balance	14,862				15,988				14,862	15,988	12,300
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												$ 1,844	$ 2,696
Loans collectively evaluated for impairment												338	298
Non-impaired loans collectively evaluated for impairment												11,562	11,099
Loans acquired with deteriorated credit quality												1,118	1,895
Total	14,862			15,988	15,988			12,300	15,988	12,300	23,672	14,862	15,988
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												28,432	22,528
Impaired loans collectively evaluated for impairment												3,171	2,363
Non-impaired loans collectively evaluated for impairment												2,260,117	1,932,221
Loans acquired with deteriorated credit quality												28,256	38,477
Total loans												2,319,976	1,995,589
Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												1,604,767	1,526,623
Commercial \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												457,827	499,573
Non residential real estate \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												969,615	876,784
Construction and land development \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												177,325	150,266
Residential real estate \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												253,713	163,224
Consumer \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												270,017	161,512
Lease financing \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												191,479	144,230
Non-PCI loans
Changes in allowance for loan losses :
Beginning balance				14,093				10,503	14,093	10,503	11,985
Provision for loan losses									6,425	11,061	300
Charge-offs									(7,668)	(9,565)	(2,271)
Recoveries									894	2,094	489
Ending balance	13,744				14,093				13,744	14,093	10,503
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	13,744			14,093	14,093			10,503	14,093	10,503	11,985	13,744	14,093
Recorded investment (loan balance) at December 31, 2014:
Total loans												2,291,720	1,957,112
Non-PCI loans \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												1,583,380	1,496,396
Non-PCI loans \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												708,340	460,716
Non-PCI loans \| Commercial \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												454,310	493,445
Non-PCI loans \| Non residential real estate \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												963,895	862,744
Non-PCI loans \| Construction and land development \| Commercial loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												165,175	140,207
Non-PCI loans \| Residential real estate \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												247,156	155,266
Non-PCI loans \| Consumer \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												269,705	161,220
Non-PCI loans \| Lease financing \| Other loan portfolio
Recorded investment (loan balance) at December 31, 2014:
Total loans												191,479	144,230
PCI loans
Changes in allowance for loan losses :
Beginning balance				1,895				1,797	1,895	1,797	11,687
Provision for loan losses									(834)	66	(208)
Charge-offs									(68)	(92)	(9,825)
Recoveries									125	124	143
Ending balance	1,118				1,895				1,118	1,895	1,797
Allowance for loan losses balance at December 31, 2014 attributable to:
Total	1,118			1,895	1,895			1,797	1,895	1,797	11,687	1,118	1,895
Recorded investment (loan balance) at December 31, 2014:
Total loans												28,256	38,477
PCI loans \| Commercial \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance				6,917				2,284	6,917	2,284
Provision for loan losses									2,992	11,154
Charge-offs									(4,252)	(7,742)
Recoveries									263	1,221
Ending balance	5,920				6,917				5,920	6,917	2,284
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												878	1,765
Loans collectively evaluated for impairment												4	32
Non-impaired loans collectively evaluated for impairment												4,539	4,745
Loans acquired with deteriorated credit quality												499	375
Total	5,920			6,917	6,917			2,284	6,917	2,284	2,284	5,920	6,917
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												6,504	6,316
Impaired loans collectively evaluated for impairment												44	254
Non-impaired loans collectively evaluated for impairment												447,762	486,875
Loans acquired with deteriorated credit quality												3,517	6,128
Total loans												457,827	499,573
PCI loans \| Non residential real estate \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance				5,179				6,925	5,179	6,925
Provision for loan losses									(1,041)	(2,001)
Charge-offs									(1,177)	(379)
Recoveries									264	634
Ending balance	3,225				5,179				3,225	5,179	6,925
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												296	479
Loans collectively evaluated for impairment												13	35
Non-impaired loans collectively evaluated for impairment												2,684	3,662
Loans acquired with deteriorated credit quality												232	1,003
Total	3,225			5,179	5,179			6,925	5,179	6,925	6,925	3,225	5,179
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												18,275	13,434
Impaired loans collectively evaluated for impairment												123	283
Non-impaired loans collectively evaluated for impairment												945,497	849,027
Loans acquired with deteriorated credit quality												5,720	14,040
Total loans												969,615	876,784
PCI loans \| Construction and land development \| Commercial loan portfolio
Changes in allowance for loan losses :
Beginning balance				435				486	435	486
Provision for loan losses									(183)	86
Charge-offs									(1)	(171)
Recoveries									94	34
Ending balance	345				435				345	435	486
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												6
Loans collectively evaluated for impairment												2
Non-impaired loans collectively evaluated for impairment												337	419
Loans acquired with deteriorated credit quality													16
Total	345			435	435			486	435	486	486	345	435
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												63
Impaired loans collectively evaluated for impairment												21
Non-impaired loans collectively evaluated for impairment												165,091	140,207
Loans acquired with deteriorated credit quality												12,150	10,059
Total loans												177,325	150,266
PCI loans \| Residential real estate \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				2,120				2,038	2,120	2,038
Provision for loan losses									1,601	663
Charge-offs									(966)	(742)
Recoveries									174	161
Ending balance	2,929				2,120				2,929	2,120	2,038
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												379	452
Loans collectively evaluated for impairment												225	174
Non-impaired loans collectively evaluated for impairment												1,968	1,000
Loans acquired with deteriorated credit quality												357	494
Total	2,929			2,120	2,120			2,038	2,120	2,038	2,038	2,929	2,120
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												2,920	2,778
Impaired loans collectively evaluated for impairment												2,109	1,377
Non-impaired loans collectively evaluated for impairment												242,127	151,111
Loans acquired with deteriorated credit quality												6,557	7,958
Total loans												253,713	163,224
PCI loans \| Consumer \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				749				567	749	567
Provision for loan losses									382	405
Charge-offs									(301)	(334)
Recoveries									100	111
Ending balance	930				749				930	749	567
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans collectively evaluated for impairment												23	7
Non-impaired loans collectively evaluated for impairment												877	735
Loans acquired with deteriorated credit quality												30	7
Total	930			749	749			$ 567	749	567	$ 567	930	749
Recorded investment (loan balance) at December 31, 2014:
Impaired loans collectively evaluated for impairment												213	51
Non-impaired loans collectively evaluated for impairment												269,492	161,169
Loans acquired with deteriorated credit quality												312	292
Total loans												270,017	161,512
PCI loans \| Lease financing \| Other loan portfolio
Changes in allowance for loan losses :
Beginning balance				588					588
Provision for loan losses									1,840	820
Charge-offs									(1,039)	(289)
Recoveries									124	57
Ending balance	1,513				588				1,513	588
Allowance for loan losses balance at December 31, 2014 attributable to:
Loans individually evaluated for impairment												285
Loans collectively evaluated for impairment												71	50
Non-impaired loans collectively evaluated for impairment												1,157	538
Total	$ 1,513			$ 588	$ 588				$ 588	$ 588		1,513	588
Recorded investment (loan balance) at December 31, 2014:
Impaired loans individually evaluated for impairment												670
Impaired loans collectively evaluated for impairment												661	398
Non-impaired loans collectively evaluated for impairment												190,148	143,832
Total loans												$ 191,479	$ 144,230

LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Changes in the accretable yield for PCI loans
Balance at beginning of period	$ 10,526	$ 16,198	$ 5,480
New loans purchased – Heartland acquisition			11,242
Accretion	(8,579)	(5,676)	(1,393)
Disposals related to foreclosures			(3)
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows)	915		608
Reclassification from (to) non-accretable	6,173	4	264
Balance at end of period	$ 9,035	$ 10,526	$ 16,198

LOANS - Covered and noncovered loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Covered and noncovered loans
Covered loans		$ 3,629
Non-covered loans	$ 2,319,976	1,991,960
Total loans	2,319,976	1,995,589
Non-PCI loans
Covered and noncovered loans
Covered loans		1,969
Non-covered loans	2,291,720	1,955,143
Total loans	2,291,720	1,957,112
PCI loans
Covered and noncovered loans
Covered loans		1,660
Non-covered loans	28,256	36,817
Total loans	28,256	38,477
Customer outstanding balances	34,600	44,500
Commercial loan portfolio
Covered and noncovered loans
Total loans	1,604,767	1,526,623
Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Total loans	1,583,380	1,496,396
Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Total loans	708,340	460,716
Commercial \| Commercial loan portfolio
Covered and noncovered loans
Covered loans		1,445
Non-covered loans	457,827	498,128
Total loans	457,827	499,573
Commercial \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans		378
Non-covered loans	454,310	493,067
Total loans	454,310	493,445
Commercial \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans		1,067
Non-covered loans	3,517	5,061
Total loans	457,827	499,573
Non residential real estate \| Commercial loan portfolio
Covered and noncovered loans
Covered loans		1,194
Non-covered loans	969,615	875,590
Total loans	969,615	876,784
Non residential real estate \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans		876
Non-covered loans	963,895	861,868
Total loans	963,895	862,744
Non residential real estate \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans		318
Non-covered loans	5,720	13,722
Total loans	969,615	876,784
Construction and land development \| Commercial loan portfolio
Covered and noncovered loans
Non-covered loans	177,325	150,266
Total loans	177,325	150,266
Construction and land development \| Commercial loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	165,175	140,207
Total loans	165,175	140,207
Construction and land development \| Commercial loan portfolio \| PCI loans
Covered and noncovered loans
Non-covered loans	12,150	10,059
Total loans	177,325	150,266
Residential real estate \| Other loan portfolio
Covered and noncovered loans
Covered loans		990
Non-covered loans	253,713	162,234
Total loans	253,713	163,224
Residential real estate \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Covered loans		715
Non-covered loans	247,156	154,551
Total loans	247,156	155,266
Residential real estate \| Other loan portfolio \| PCI loans
Covered and noncovered loans
Covered loans		275
Non-covered loans	6,557	7,683
Total loans	253,713	163,224
Consumer \| Other loan portfolio
Covered and noncovered loans
Non-covered loans	270,017	161,512
Total loans	270,017	161,512
Consumer \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	269,705	161,220
Total loans	269,705	161,220
Consumer \| Other loan portfolio \| PCI loans
Covered and noncovered loans
Non-covered loans	312	292
Total loans	270,017	161,512
Lease financing \| Other loan portfolio
Covered and noncovered loans
Non-covered loans	191,479	144,230
Total loans	191,479	144,230
Lease financing \| Other loan portfolio \| Non-PCI loans
Covered and noncovered loans
Non-covered loans	191,479	144,230
Total loans	191,479	144,230
Lease financing \| Other loan portfolio \| PCI loans
Covered and noncovered loans
Total loans	$ 191,479	$ 144,230

PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	1 Months Ended		12 Months Ended
PREMISES AND EQUIPMENT, NET (Details) $ in Thousands	Mar. 31, 2017 item	Nov. 30, 2016 USD ($) item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Property, Plant and Equipment [Line Items]
Premises and equipment gross			$ 92,499	$ 95,667
Accumulated depreciation			(25,807)	(22,534)
Premises and equipment, net			66,692	73,133
Other Assets.			40,259	29,260
Depreciation			5,080	5,139	$ 3,464
Number Of Banking Offices \| item		46
Asset impairment		$ 1,900
Increase in assets held for sale		1,600
Decrease in premises and equipment		$ 1,600
Forecast
Property, Plant and Equipment [Line Items]
Number Of Banking Offices \| item	39
Land
Property, Plant and Equipment [Line Items]
Premises and equipment gross			14,314	14,942
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment gross			56,766	58,922
Equipment
Property, Plant and Equipment [Line Items]
Premises and equipment gross			21,419	21,803
Midland States Bancorp, Inc
Property, Plant and Equipment [Line Items]
Other Assets.			$ 2,047	$ 3,644

MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Mortgage servicing rights:
Balance at beginning of period	$ 67,218	$ 62,900	$ 2,522
Balance at end of period	71,710	67,218	62,900
Valuation allowances – residential mortgage loans:
Balance at beginning of period	567	119	202
Additions	6,962	1,630	92
Reductions	(3,827)	(1,182)	(175)
Balance at end of period	3,702	567	119
Mortgage servicing rights, net	68,008	66,651	62,781
Fair Value	68,008	66,700	62,781	$ 2,320
Commercial FHA Mortgage Loans
Mortgage servicing rights:
Payments to Acquire Mortgage Servicing Rights (MSR)			45,544
Servicing rights capitalized	6,805	4,318
Amortization	(2,388)	(2,272)
Residential mortgage loans
Mortgage servicing rights:
Payments to Acquire Mortgage Servicing Rights (MSR)			14,791
Servicing rights capitalized	3,828	5,015	464
Amortization	$ (3,753)	$ (2,743)	$ (421)

MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Commercial FHA Mortgage Loans
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.13%	0.12%
Interest Rate	3.72%	3.85%
Remaining Years to Maturity	30 years 2 months 12 days	30 years 7 months 6 days
Prepayment Rate	8.31%	8.53%
Servicing Cost	1000.00%	1000.00%
Commercial FHA Mortgage Loans \| Maximum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	13.00%	13.00%
Commercial FHA Mortgage Loans \| Minimum
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Discount Rate	10.00%	10.00%
Residential mortgage loans
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Servicing Fee	0.26%	0.27%
Interest Rate	3.89%	3.96%
Remaining Years to Maturity	24 years 2 months 12 days	24 years 4 months 24 days
Prepayment Rate	9.72%	11.22%
Servicing Cost	60.27%	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	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill	$ 48,836	$ 46,519
Amount of increase in goodwill as a result of sterling acquisition	2,300
Goodwill, Impairment Loss	0
Banking
Goodwill [Line Items]
Goodwill	35,627	35,627
Commercial FHA Origination and Servicing
Goodwill [Line Items]
Goodwill	10,892	$ 10,892
Other
Goodwill [Line Items]
Goodwill	$ 2,317

GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 10, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-lived intangible assets
Gross Carrying Amount		$ 26,013	$ 23,683
Accumulated Amortization		(18,826)	(16,679)
Total		7,187	7,004
Amortization of intangible assets		2,147	2,460	$ 2,115
Intangibles	$ 2,300
Estimated amortization expense of intangible assets
2017		1,827
2018		1,247
2019		913
2020		597
2021		446
Thereafter		2,157
Total		7,187	7,004
Core deposits
Finite-lived intangible assets
Gross Carrying Amount		20,542	20,542
Accumulated Amortization		(16,181)	(14,471)
Total		4,361	6,071
Estimated amortization expense of intangible assets
Total		4,361	6,071
Customer relationship
Finite-lived intangible assets
Gross Carrying Amount		5,471	3,141
Accumulated Amortization		(2,645)	(2,208)
Total		2,826	933
Estimated amortization expense of intangible assets
Total		$ 2,826	$ 933
Sterling
Finite-lived intangible assets
Intangibles	$ 2,300
Amortization period	20 years

DERIVATIVE INSTRUMENTS (Details) - USD ($)	12 Months Ended
DERIVATIVE INSTRUMENTS (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition
Notional amount, asset derivatives	$ 566,147,000	$ 257,023,000
Fair value of asset derivatives	6,378,000	6,029,000
Net gains recognized on derivative instruments	351,000	6,000,000	$ 97,000
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	264,359,000	257,023,000
Fair value of asset derivatives	6,253,000	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, asset derivatives	301,788,000
Notional amount, liability derivatives		278,313,000
Fair value of asset derivatives	$ 125,000
Fair value of liability derivatives		$ 2,000

DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($)	12 Months Ended	50 Months Ended
	Dec. 31, 2016	Oct. 15, 2016	Dec. 31, 2015	Aug. 15, 2012
Derivative disclosures
Debt Instrument, Description of Variable Rate Basis	three month LIBOR	three-month LIBOR
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			$ 126,000
Interest rate swap agreements \| LIBOR
Derivative disclosures
Variable interest rate (as a percent)		2.75%

DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Classification of deposits
Non-interest bearing demand	$ 562,333	$ 543,401
Interest bearing:
Checking	656,248	621,925
Money market	399,851	377,654
Savings	166,910	155,778
Time	619,024	668,890
Total deposits	2,404,366	2,367,648
Time deposits 250000 or more	52,900	52,200
Brokered certificate of deposit	218,700	222,300
Schedule of maturities of time deposits
2017	334,631
2018	213,568
2019	55,837
2020	6,288
2021	8,698
Thereafter	2
Total	619,024
Standby Letters of Credit
Interest bearing:
Amounts pledged for public deposits	68,000	8,000
Investment Securities
Interest bearing:
Amounts pledged for public deposits	$ 75,300	$ 120,200

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	12 Months Ended
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Short-term borrowings
Outstanding at period-end	$ 131,557	$ 107,538
Average amount outstanding	130,228	123,447
Maximum amount outstanding at any month end	$ 168,369	$ 147,542
Weighted average interest rate:
During period	0.23%	0.19%
End of period	0.21%	0.21%
Federal funds lines of credit	$ 30,000
Investment securites pledged/collateralized for secured borrowings	140,000	$ 135,400
Line of credit	35,100	62,100
Non residential real estate
Weighted average interest rate:
Loans Pledged as Collateral	$ 43,300	$ 76,700

FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 18, 2014
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total FHLB advances and other borrowings		$ 237,518	$ 40,178
Federal Hom Loan Bank Advances, Interest Rate Information
Federal Home loan in advance	$ 40,000
Prepayment fee	$ (1,746)
FHLB advances, collateral for mortgage and home equity line of credit loans		1,180,000	987,400
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
2017		62,514
2018		50,004
2021		50,000
Thereafter		75,000
Total		237,518	40,178
Weighted average
Federal Hom Loan Bank Advances, Interest Rate Information
Federal Home Loan Bank advances, interest rate	2.86%
FHLB advances – fixed rate, fixed term, at rates averaging 0.0% 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, interest rate		0.89%	0.93%
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
Total		$ 237,500	$ 40,000
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		$ 18	178
Federal Hom Loan Bank Advances, Interest Rate Information
Capital lease obligation, implicit interest rate		1.70%
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
Total		$ 18	$ 178
Term Loan [Member]
Federal Hom Loan Bank Advances, Interest Rate Information
Debt Instrument, Face Amount					$ 14,000
Debt Instrument, Interest Rate, Stated Percentage				4.85%

SUBORDINATED DEBT (Details) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended	50 Months Ended
	Jun. 28, 2016 USD ($)	Mar. 26, 2013 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) tranche	Dec. 31, 2016 USD ($)	Oct. 15, 2016	Dec. 31, 2015 USD ($)	Jan. 02, 2013 USD ($)
Subordinated Borrowing [Line Items]
Carrying amount				$ 54,508		$ 61,859
Duration with fixed interest rate				5 years
Debt Instrument, Description of Variable Rate Basis				three month LIBOR	three-month LIBOR
Number of tranches \| tranche			2
Investment face amount							$ 10,000
Common stock				$ 155		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
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 costs			$ 900
Repayments of Subordinated Debt	$ 8,000
Discount		$ 600
Subordinate debt \| Private Placement
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
Carrying amount				$ 39,729		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				14,779		14,752
Midland States Bancorp, Inc
Subordinated Borrowing [Line Items]
Carrying amount				54,508		$ 61,859
Repayments of Subordinated Debt				$ 8,000

TRUST PREFERRED DEBNTURES (Details) - USD ($)	12 Months Ended
TRUST PREFERRED DEBNTURES (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Jun. 05, 2013	Jun. 06, 2007	Nov. 30, 2006	Mar. 26, 2004	Dec. 19, 2003
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 37,405,000	$ 37,057,000
LIBOR
TRUST PREFERRED DEBENTURES
Variable interest rate (as a percent)	4.35%
Spread on variable rate	4.35%
Grant Park Trust
TRUST PREFERRED DEBENTURES
Liquidation amount per security							$ 1,000
Number of preferred securities issued							3,000
Book value of subordinated debentures			$ 3,000,000
Fair value of subordinated debentures			$ 1,800,000
Grant Park Trust \| Other assets
TRUST PREFERRED DEBENTURES
Company’s investment in the common stock of trust							$ 93,000
Midland Trust
TRUST PREFERRED DEBENTURES
Pool issued						$ 10,000,000
Liquidation amount per security						$ 1,000
Midland Trust \| Other assets
TRUST PREFERRED DEBENTURES
Company’s investment in the common stock of trust						$ 310,000
LSHC Trust III
TRUST PREFERRED DEBENTURES
Liquidation amount per security					$ 1,000
Number of preferred securities issued					20,000
Book value of subordinated debentures	$ 40,000,000
Fair value of subordinated debentures	26,100,000
LSHC Trust IV
TRUST PREFERRED DEBENTURES
Liquidation amount per security				$ 1,000
Number of preferred securities issued				20,000
LSHC Trust IV \| Other assets
TRUST PREFERRED DEBENTURES
Company’s investment in the common stock of trust				$ 1,200,000
Trust preferred debentures maturing January 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 1,996,000	$ 1,932,000
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)	3.74%	3.17%
Face amount							3,000,000
Subordinated debentures issued							$ 3,000,000
Spread on variable rate	2.85%
Trust preferred debentures maturing April 23, 2034
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 9,957,000	$ 9,954,000
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)	3.63%	3.07%
Face amount						10,000,000
Subordinated debentures issued						$ 10,000,000
Spread on variable rate	2.75%
Trust preferred debentures maturing December 31, 2036
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 13,141,000	$ 13,001,000
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)	2.71%	2.26%
Face amount					$ 20,000,000
Subordinated debentures issued					$ 20,000,000
Spread on variable rate	1.75%
Trust preferred debentures maturing September 6, 2037
TRUST PREFERRED DEBENTURES
Trust preferred debentures	$ 12,311,000	$ 12,170,000
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)	2.42%	1.92%
Face amount				20,000,000
Subordinated debentures issued				$ 20,000,000
Spread on variable rate	1.47%

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Federal:
Current									$ 1,718	$ 3,500	$ 217
Deferred									11,381	5,604	2,970
State:
Current									2,630	1,117	370
Deferred									3,160	870	1,094
Income Tax Expense (Benefit), Total	$ 8,327	$ 4,102	$ 3,683	$ 2,777	$ 2,811	$ 1,928	$ 2,762	$ 3,590	$ 18,889	$ 11,091	$ 4,651

INCOME TAXES - Statutory federal rate (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
INCOME TAXES
Expected income taxes									$ 17,648	$ 12,424	$ 5,414
Less income tax effect of:
Tax exempt interest									(1,670)	(1,934)	(1,809)
Interest expense disallowance									33	29	38
State tax, net of federal benefit									3,132	1,292	1,540
Increase in cash surrender value of life insurance policies									(1,007)	(516)	(373)
Indemnification income										(311)
Valuation allowance									631
Other									122	107	(159)
Actual income tax expense	$ 8,327	$ 4,102	$ 3,683	$ 2,777	$ 2,811	$ 1,928	$ 2,762	$ 3,590	$ 18,889	$ 11,091	$ 4,651

INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Assets:
Allowance for loan losses	$ 5,766,000	$ 6,435,000
Deferred compensation	2,136,000	2,029,000
Loans acquired in FDIC assisted transactions		3,878,000
Investments acquired in FDIC assisted transactions		3,504,000
Loans	1,972,000	2,889,000
Write-down of other real estate owned	70,000	1,758,000
Tax credits	3,106,000	3,076,000
Nonaccrual interest	1,007,000	727,000
Unrealized loss on securities	387,000
Intangible assets	292,000
Stock compensation	689,000	268,000
Other, net	777,000	2,160,000
Deferred tax assets	16,202,000	26,724,000
Valuation allowance	(631,000)
Deferred tax assets, net of valuation allowance	15,571,000	26,724,000
Liabilities:
Premises and equipment	1,268,000	2,414,000
Unrealized gain on securities		4,061,000
Mortgage servicing rights	15,092,000	12,084,000
Fair value adjustment on trust preferred debentures	6,023,000	6,387,000
Federal Home Loan Bank stock dividends	227,000	235,000
Indemnification asset due from FDIC		(82,000)
Deferred loan fees, net of costs	136,000	103,000
Intangible assets		26,000
Accounting method changes	1,156,000
Other, net	267,000
Deferred tax liabilities	24,169,000	25,228,000
Deferred tax (liabilities) assets, net	(8,598,000)
Deferred tax (liabilities) assets, net		1,496,000
Accumulation of prior year’s earnings representing tax bad debt deductions	3,100,000	3,100,000
Operating loss carryforwards	0
Unrecognized tax benefits	0	0
Interest or penalties relative to unrecognized tax benefits	0	$ 0
State tax credit carryforwards Valuation allowance	631,000
Federal
Liabilities:
Tax credit carryforward	1,500,000
State
Liabilities:
Tax credit carryforward	$ 920,000
Period for tax credit carryforward.	5 years

RETIREMENT PLANS (Details) - USD ($)	12 Months Ended
RETIREMENT PLANS (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jul. 01, 2016
Defined Contribution Plan Disclosure [Line Items]
Employer's contribution, discretionary amount	$ 0	$ 0	$ 0
Employer's matching contribution, percentage	50.00%
Employee's contribution, percentage of gross pay	6.00%
Employer's matching contribution, percentage of employee compensation	50.00%
Total expense recorded	$ 1,200,000	1,100,000	484,000
Director \| Deferred Compensation Arrangement
Defined Contribution Plan Disclosure [Line Items]
Employer's matching contribution, percentage	25.00%
Deferred Compensation Arrangements [Abstract]
Annual vesting pecentage	25.00%
Deferred compensation arrangement, compensation expense	$ 605,000	596,000	519,000
Deferred compensation arrangement, distributions	126,000	56,000	$ 115,000
Chief Executive Officer [Member] \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability	219,000	24,000
Chief Executive Officer [Member] \| Deferred Compensation Arrangement \| Forecast
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, supplement retirment payments, percentage of final salary				30.00%	40.00%	50.00%
Other Postretirement Benefit Plan [Member]
Deferred Compensation Arrangements [Abstract]
Funded status of the plan (market value of assets divided by funding target)							119.53%
Defined benefit plan, minimum required contribution, administrative expense	134,000	132,000
Other liabilities. \| Director \| Deferred Compensation Arrangement
Deferred Compensation Arrangements [Abstract]
Deferred compensation arrangement, accrued liability	$ 3,100,000	$ 2,700,000
Minimum
Defined Contribution Plan Disclosure [Line Items]
Employee's contribution, percentage of gross pay	1.00%
Maximum
Defined Contribution Plan Disclosure [Line Items]
Employee's contribution, percentage of gross pay	100.00%

STOCK BASED COMPENSATION - Grant date using the Black Scholes (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
2010 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued	2,000,000
Stock option
Fair value of each grant is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions
Dividend yield	3.00%	3.14%	3.36%
Expected volatility	16.98%	16.94%	21.80%
Risk free interest rate	1.64%	1.93%	1.90%
Expected life	6 years 3 months	6 years 3 months	6 years 3 months
Stock option \| 2010 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available to be issued	1,000,000

STOCK BASED COMPENSATION - stock option plan (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Weighted average exercise price
Total unrecognized compensation (in years)	2 years 6 months
Stock option
Number of shares
Options outstanding, beginning of year (in shares)	1,233,606	1,115,841
Options granted (in shares)	182,118	176,093
Options exercised (in shares)	(66,024)	(39,448)
Options forfeited (in shares)	(30,441)	(18,880)
Options outstanding, end of year (in shares)	1,319,259	1,233,606	1,115,841
Options exercisable (in shares)	729,483	667,808
Options vested and expected to vest (in shares)	1,245,713	1,158,706
Weighted average exercise price
Options outstanding, beginning of year (in dollars per share)	$ 17.52	$ 16.57
Options granted (in dollars per share)	26.15	22.81
Options exercised (in dollars per share)	16.01	14.15
Options forfeited (in dollars per share)	20.15	18.00
Options outstanding, end of year (in dollars per share)	18.73	17.52	$ 16.57
Options exercisable (in dollars per share)	16.37	15.68
Options vested and expected to vest (in dollars per share)	$ 18.56	$ 17.37
Options outstanding, end of year (in years)	6 years 3 months 18 days	6 years 9 months 18 days
Options exercisable (in years)	4 years 7 months 6 days	5 years
Options vested and expected to vest (in years)	6 years 2 months 12 days	6 years 7 months 6 days
Aggregate intrinsic value of options outstanding	$ 23,000,000
Aggregate intrinsic value of options exercisable	14,500,000
Total unrecognized compensation	$ 1,200,000
Weighted average fair value of options granted	$ 2.94	$ 2.55	$ 2.75
Total intrinsic value from options exercised	$ 971,000	$ 299,000	$ 32,000
Cash received from options exercised	$ 890,000	$ 558,000	$ 74,000

STOCK BASED COMPENSATION - Nonvested stock option (Details) - Stock option - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Number of shares
Nonvested at December 31, 2015 (in shares)	565,798
Granted (in shares)	182,118	176,093
Vested (in shares)	(132,184)
Forfeited (in shares)	(25,956)
Nonvested at December 31, 2016 (in shares)	589,776	565,798
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 2.61
Granted (in dollars per shares)	2.94
Vested (in dollars per shares)	2.41
Forfeited (in dollars per shares)	2.18
Nonvested at December 31, 2016 (in dollars per shares)	$ 2.73	$ 2.61

STOCK BASED COMPENSATION - Restricted stock awards (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years	3 years
Weighted average grant date fair value
Total unrecognized compensation (in years)	2 years 6 months
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Number outstanding
Granted during the year (in shares)	63,728	21,789
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 22.95	$ 20.87
Nonvested at December 31, 2016 (in dollars per shares)	27.38	22.95	$ 20.87
Total unrecognized compensation				$ 2,800,000
Weighted average grant date fair value for restricted stock awards	$ 22.95	$ 20.87	$ 20.87	$ 27.38
Compensation cost that has been charged against income	$ 1,100,000	$ 940,000	$ 708,000
Restricted Stock Units (RSUs)
Number outstanding
Granted during the year (in shares)	7,048	7,596
Restricted Stock And Restricted Stock Unit Awards [Member]
Number outstanding
Nonvested at December 31, 2015 (in shares)	73,147
Granted during the year (in shares)	70,776
Vested during the year (in shares)	(29,849)
Forfeited during the year (in shares)	(5,427)
Nonvested at December 31, 2016 (in shares)	108,647	73,147
Weighted average grant date fair value
Nonvested at December 31, 2015 (in dollars per shares)	$ 20.21
Granted during the year (in dollars per shares)	27.38
Vested during the year (in dollars per shares)	19.14
Forfeited during the year (in dollars per shares)	20.36
Nonvested at December 31, 2016 (in dollars per shares)	25.16	$ 20.21
Weighted average grant date fair value for restricted stock awards	$ 20.21	$ 20.21		$ 25.16

PREFERRED STOCK (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2014	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	May 24, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Conversion of stock		1,807,369
Additional shares issued	15,483,499	138,239					11,797,404
Accrued dividend	$ 0.4
IPO
Class of Stock [Line Items]
Additional shares issued						3,044,252
Series C preferred stock \| IPO
Class of Stock [Line Items]
Issue of preferred stock (value)					$ 23.6
Dividend rate					9.00%
Conversion of stock					2,360
Conversion of Stock, Shares Converted					2,008,543
Series D preferred stock
Class of Stock [Line Items]
Issue of preferred stock		3,377
Series D preferred stock \| IPO
Class of Stock [Line Items]
Issue of preferred stock (value)				$ 23.8
Issue of preferred stock				2,377
Dividend rate				9.00%
Number of shares held by offer accepted shareholders				130
Repurchase amount				$ 1.3
Redemption amount ( in dollars per share)				$ 10,000
Series E preferred stock
Class of Stock [Line Items]
Issue of preferred stock (value)			$ 6.3
Issue of preferred stock		3,377
Dividend rate			9.00%
Series F preferred stock
Class of Stock [Line Items]
Issue of preferred stock (value)			$ 5.0
Issue of preferred stock		3,377
Dividend rate			9.00%

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net income	$ 11,583	$ 8,051	$ 6,789	$ 5,119	$ 7,695	$ 3,445	$ 6,653	$ 6,531	$ 31,542	$ 24,324	$ 10,816
Preferred dividends declared											(7,601)
Net Income (Loss) Available to Common Stockholders, Basic									31,542	24,324	3,215
Common shareholder dividends									(9,797)	(7,642)	(3,465)
Unvested restricted stock award dividends									(56)	(50)	(47)
Undistributed earnings to unvested restricted stock awards									(110)	(108)
Undistributed earnings to common shareholders									21,579	16,524	(297)
Basic
Distributed earnings to common shareholders									9,797	7,642	3,465
Undistributed earnings to common shareholders									21,579	16,524	(297)
Net income attributable to Midland States Bancorp, Inc.									31,542	24,324	3,215
Total common shareholders earnings									31,376	24,166	3,168
Diluted
Distributed earnings to common shareholders									9,797	7,642	3,465
Undistributed earnings to common shareholders									21,579	16,524	(297)
Net income attributable to Midland States Bancorp, Inc.									31,542	24,324	3,215
Add back:
Undistributed earnings reallocated from unvested restricted stock awards									2	2
Total common shareholders earnings, diluted									$ 31,378	$ 24,168	$ 3,168
Weighted average common shares outstanding, basic (In shares)									14,130,552	11,902,455	5,945,615
Weighted average common shares outstanding, diluted (In shares)									14,428,839	12,112,403	6,025,454
Basic earnings per common share (In dollars per share)	$ 0.74	$ 0.51	$ 0.51	$ 0.43	$ 0.64	$ 0.29	$ 0.56	$ 0.55	$ 2.22	$ 2.03	$ 0.53
Diluted earnings per common share (In dollars per share)	$ 0.72	$ 0.51	$ 0.50	$ 0.42	$ 0.63	$ 0.28	$ 0.55	$ 0.54	$ 2.17	$ 2.00	$ 0.53
Options and warrants
Add back:
Options and warrants									298,287	209,948	79,839

CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Capital requirements and restrictions on dividends
Total Capital (to Risk Weighted Assets): Actual Amount	$ 374,955	$ 288,958
Total Capital (to Risk Weighted Assets): Actual Ratio	13.85%	11.82%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 216,612	$ 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	$ 305,283	$ 210,614
Tier I Capital (to Risk Weighted Assets): Actual Ratio	11.27%	8.62%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 162,459	$ 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	$ 253,273	$ 158,969
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio	9.35%	6.50%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount	$ 121,844	$ 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	$ 305,283	$ 210,614
Tier I Capital (to Average Assets): Actual Ratio	9.76%	7.49%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount	$ 125,076	$ 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	$ 329,759	$ 270,436
Total Capital (to Risk Weighted Assets): Actual Ratio	12.17%	11.06%
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 216,773	$ 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	$ 270,966	$ 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	$ 314,595	$ 254,228
Tier I Capital (to Risk Weighted Assets): Actual Ratio	11.61%	10.39%
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount	$ 162,580	$ 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	$ 216,773	$ 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	$ 314,595	$ 254,228
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio	11.61%	10.39%
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount	$ 121,935	$ 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	$ 176,128	$ 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	$ 314,595	$ 254,228
Tier I Capital (to Average Assets): Actual Ratio	10.05%	9.01%
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount	$ 125,271	$ 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	$ 156,589	$ 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 ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Assets
Fair value	$ 246,339	$ 236,627
Liabilities
Impaired loans	2,459	1,589
Other real estate owned	247	114
Assets held for sale	1,646
Total loss on assets measured on a nonrecurring basis	4,352	1,703
U.S. Treasury securities
Assets
Fair value	75,901	48,302
Government sponsored entity debt securities
Assets
Fair value	7,688	9,454
State and municipal securities
Assets
Fair value	25,274	15,494
Corporate securities
Assets
Fair value	47,405	19,869
Level 1
Assets
Fair value	75,901	48,302
Level 2
Assets
Fair value	162,957	188,325
Loans held for sale	70,565	54,413
Derivative Assets	6,253	6,029
Level 2 \| Interest rate swap agreements
Liabilities
Derivative liability		2
Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	125
Liabilities
Derivative liability		126
Level 3
Assets
Fair value	7,481
Recurring member
Assets
Loans held for sale	70,565	54,413
Total Assets	323,282	297,069
Liabilities
Contingent consideration		350
Total		478
Other real estate owned	165
Recurring member \| Interest rate lock commitments
Assets
Derivative Assets	6,253	6,029
Recurring member \| Interest rate swap agreements
Liabilities
Derivative liability		126
Recurring member \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	125
Liabilities
Derivative liability		2
Recurring member \| U.S. Treasury securities
Assets
Fair value	75,901	48,302
Recurring member \| Government sponsored entity debt securities
Assets
Fair value	7,688	9,454
Recurring member \| Agency mortgage-backed securities
Assets
Fair value	90,070	67,527
Recurring member \| Non-agency mortgage-backed securities
Assets
Fair value	1	2
Recurring member \| Covered non-agency mortgage-backed securities
Assets
Fair value		75,979
Recurring member \| State and municipal securities
Assets
Fair value	25,274	15,494
Recurring member \| Corporate securities
Assets
Fair value	47,405	19,869
Recurring member \| Level 1
Assets
Total Assets	75,901	48,302
Recurring member \| Level 1 \| U.S. Treasury securities
Assets
Fair value	75,901	48,302
Recurring member \| Level 2
Assets
Loans held for sale	70,565	54,413
Total Assets	239,900	248,767
Liabilities
Total		128
Other real estate owned	165
Recurring member \| Level 2 \| Interest rate lock commitments
Assets
Derivative Assets	6,253	6,029
Recurring member \| Level 2 \| Interest rate swap agreements
Liabilities
Derivative liability		126
Recurring member \| Level 2 \| Forward commitments to sell mortgage-backed securities
Assets
Derivative Assets	125
Liabilities
Derivative liability		2
Recurring member \| Level 2 \| Government sponsored entity debt securities
Assets
Fair value	7,688	9,454
Recurring member \| Level 2 \| Agency mortgage-backed securities
Assets
Fair value	90,070	67,527
Recurring member \| Level 2 \| Non-agency mortgage-backed securities
Assets
Fair value		2
Recurring member \| Level 2 \| Covered non-agency mortgage-backed securities
Assets
Fair value		75,979
Recurring member \| Level 2 \| State and municipal securities
Assets
Fair value	25,274	15,494
Recurring member \| Level 2 \| Corporate securities
Assets
Fair value	39,925	19,869
Recurring member \| Level 3
Assets
Total Assets	7,481
Liabilities
Contingent consideration		350
Total		350
Recurring member \| Level 3 \| Non-agency mortgage-backed securities
Assets
Fair value	1
Recurring member \| Level 3 \| Corporate securities
Assets
Fair value	7,480
Non recurring member
Liabilities
Impaired loans	10,202	16,667
Other real estate owned		535
Assets held for sale	1,550
Non recurring member \| Level 2
Liabilities
Impaired loans	6,635	8,821
Other real estate owned		535
Assets held for sale	1,550
Non recurring member \| Level 3
Liabilities
Impaired loans	$ 3,567	$ 7,846

FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Corporate securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transferred from Level 2	$ 6,749
Transferred to Level 2	(2,000)
Purchases of investment securities recognized as Level 3	3,000
Total realized in earnings	343
Total unrealized in other comprehensive income	(305)
Net settlements (principal and interest)	(307)
Ending balance	7,480
Non-agency mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transferred from Level 2	2
Net settlements (principal and interest)	(1)
Ending balance	$ 1
Covered non-agency mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance		$ 56,437
Transferred to Level 2		(55,910)
Total realized in earnings		1,487
Net settlements (principal and interest)		$ (2,014)

FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details)	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Assets
Fair value	$ 246,339,000	$ 236,627,000
Investment securities held to maturity	81,952,000	92,816,000
Accrued interest receivable	8,202,000	7,697,000
Liabilities
Trust preferred debentures	37,405,000	37,057,000
Accrued interest payable	1,045,000	979,000
Fair value, additional information
Other than temporary impairment, net of applicable loss-share reimbursements	824,000	461,000	$ 190,000
Level 1
Assets
Cash and due from banks	189,543,000	211,976,000
Federal funds sold	1,173,000	499,000
Fair value	75,901,000	48,302,000
Level 2
Assets
Fair value	162,957,000	188,325,000
Investment securities held to maturity	81,952,000	92,816,000
Nonmarketable equity securities	19,485,000	15,472,000
Loans held for sale	70,565,000	54,413,000
Accrued interest receivable	8,202,000	7,697,000
Derivative Assets	6,253,000	6,029,000
Liabilities
Deposits	2,404,231,000	2,371,397,000
Short-term borrowings	131,557,000	107,538,000
FHLB and other borrowings	236,736,000	40,054,000
Subordinated debt	49,692,000	58,198,000
Trust preferred debentures	33,054,000	33,537,000
Accrued interest payable	1,045,000	979,000
Level 3
Assets
Fair value	7,481,000
Loans, net	2,305,206,000	1,992,745,000
Carrying value
Assets
Cash and due from banks	189,543,000	211,976,000
Federal funds sold	1,173,000	499,000
Fair value	246,339,000	236,627,000
Investment securities held to maturity	78,672,000	87,521,000
Nonmarketable equity securities	19,485,000	15,472,000
Loans, net	2,305,114,000	1,979,601,000
Loans held for sale	70,565,000	54,413,000
Accrued interest receivable	8,202,000	7,697,000
Derivative Assets	6,253,000	6,029,000
Liabilities
Deposits	2,404,366,000	2,367,648,000
Short-term borrowings	131,557,000	107,538,000
FHLB and other borrowings	237,518,000	40,178,000
Subordinated debt	54,508,000	61,859,000
Trust preferred debentures	37,405,000	37,057,000
Accrued interest payable	1,045,000	979,000
Fair value
Assets
Cash and due from banks	189,543,000	211,976,000
Federal funds sold	1,173,000	499,000
Fair value	246,339,000	236,627,000
Investment securities held to maturity	81,952,000	92,816,000
Nonmarketable equity securities	19,485,000	15,472,000
Loans, net	2,305,206,000	1,992,745,000
Loans held for sale	70,565,000	54,413,000
Accrued interest receivable	8,202,000	7,697,000
Derivative Assets	6,253,000	6,029,000
Liabilities
Deposits	2,404,231,000	2,371,397,000
Short-term borrowings	131,557,000	107,538,000
FHLB and other borrowings	236,736,000	40,054,000
Subordinated debt	49,692,000	58,198,000
Trust preferred debentures	33,054,000	33,537,000
Accrued interest payable	1,045,000	979,000
Forward commitments to sell mortgage-backed securities \| Level 2
Assets
Derivative Assets	125,000
Liabilities
Derivative Liability		126,000
Forward commitments to sell mortgage-backed securities \| Carrying value
Assets
Derivative Assets	125,000
Liabilities
Derivative Liability		126,000
Forward commitments to sell mortgage-backed securities \| Fair value
Assets
Derivative Assets	125,000
Liabilities
Derivative Liability		126,000
Interest rate swap agreements \| Level 2
Liabilities
Derivative Liability		2,000
Interest rate swap agreements \| Carrying value
Liabilities
Derivative Liability		2,000
Interest rate swap agreements \| Fair value
Liabilities
Derivative Liability		2,000
Corporate securities
Assets
Fair value	47,405,000	19,869,000
Fair value, additional information
AFS transferred to Level 3	6,749,000
Transferred to Level 2	$ 2,000,000
Corporate securities \| Minimum
Fair value, additional information
Discount rate (negative)	(2.5)
Corporate securities \| Maximum
Fair value, additional information
Discount rate	2.50%
Corporate securities \| Weighted average
Fair value, additional information
Discount rate	1.50%
Non-agency mortgage-backed securities
Fair value, additional information
AFS transferred to Level 3	$ 2,000
Other than temporary impairment, net of applicable loss-share reimbursements	$ 824,000	461,000
Non-agency mortgage-backed securities \| Minimum
Fair value, additional information
Discount rate (negative)	(5.0)
Non-agency mortgage-backed securities \| Maximum
Fair value, additional information
Discount rate	5.00%
Covered non-agency mortgage-backed securities
Fair value, additional information
Transferred to Level 2		$ 55,910,000

COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Anticipated material loss	$ 0
Net rent expense under operating leases	2,400,000	$ 2,400,000	$ 460,000
Losses as a result of make whole requests and loan repurchases	83,000	63,000	$ 86,000
Liability for unresolved repurchase demands	329,000	378,000
Minimum rental payments under the terms of leases
2017	2,415,000
2018	2,248,000
2019	2,023,000
2020	1,919,000
2021	1,832,000
Thereafter	5,122,000
Total estimated lease payments	15,559,000
Love Funding Legal Dispute [Member]
Net loss contingency liability		1,200,000
Indemnifying asset		890,000
Commitments to extend credit
Loan commitments	483,345,000	495,506,000
Financial guarantees – standby letters of credit
Loan commitments	$ 89,233,000	$ 31,029,000

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Net interest income (expense)	$ 25,959	$ 27,265	$ 27,989	$ 24,041	$ 26,452	$ 25,437	$ 28,317	$ 24,701	$ 105,254	$ 104,907	$ 64,598
Provision for loan losses	2,445	1,392	629	1,125	1,052	6,699	2,379	997	5,591	11,127	92
Noninterest income	30,486	14,937	14,016	12,618	12,799	14,464	14,197	18,022	72,057	59,482	20,441
Noninterest expense	34,093	28,663	30,903	27,639	27,692	27,823	30,703	31,546	121,298	117,764	69,480
Income (loss) before income taxes (benefit)	19,907	12,147	10,473	7,895	10,507	5,379	9,432	10,180	50,422	35,498	15,467
Income taxes (benefit)	8,327	4,102	3,683	2,777	2,811	1,928	2,762	3,590	18,889	11,091	4,651
Net income (loss)	11,580	$ 8,045	$ 6,790	$ 5,118	7,696	$ 3,451	$ 6,670	$ 6,590	31,533	24,407	10,816
Total assets	3,233,723				2,884,824				3,233,723	2,884,824	2,676,614
Banking
Segment Reporting Information [Line Items]
Net interest income (expense)									109,950	107,825	66,449
Provision for loan losses									5,591	11,127	92
Noninterest income									47,646	34,751	13,343
Noninterest expense									100,062	95,712	63,351
Income (loss) before income taxes (benefit)									51,943	35,737	16,349
Income taxes (benefit)									17,129	10,626	5,181
Net income (loss)									34,814	25,111	11,168
Total assets	3,225,765				2,886,539				3,225,765	2,886,539	2,710,476
Commercial FHA Origination and Servicing
Segment Reporting Information [Line Items]
Net interest income (expense)									1,003	1,762
Noninterest income									22,979	20,148
Noninterest expense									15,104	16,232
Income (loss) before income taxes (benefit)									8,878	5,678
Income taxes (benefit)									3,332	2,271
Net income (loss)									5,546	3,407
Total assets	129,943				89,242				129,943	89,242	119,649
Other
Segment Reporting Information [Line Items]
Net interest income (expense)									(5,699)	(4,680)	(1,851)
Noninterest income									1,432	4,583	7,098
Noninterest expense									6,132	5,820	6,129
Income (loss) before income taxes (benefit)									(10,399)	(5,917)	(882)
Income taxes (benefit)									(1,572)	(1,806)	(530)
Net income (loss)									(8,827)	(4,111)	(352)
Total assets	$ (121,985)				$ (90,957)				$ (121,985)	$ (90,957)	$ (153,511)

RELATED PARTY TRANSACTIONS (Details) - USD ($)	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Rent paid	$ 706,000	$ 693,000
Chairman
Related Party Transaction [Line Items]
Payment for work on various projects	$ 161,000	$ 1,800,000	$ 306,000

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Financial Information (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Accrued income taxes receivable	$ 5,862	$ 8,754
Other assets	40,259	29,260
Total assets	3,233,723	2,884,824	$ 2,676,614
Liabilities:
Subordinated debt	54,508	61,859
Trust preferred debentures	37,405	37,057
Deferred Income Tax Liabilities, Net	8,598
Other liabilities	36,918	36,509
Total liabilities	2,911,915	2,651,768
Shareholders'equity	321,770	232,880
Total liabilities and shareholders’ equity	3,233,723	2,884,824
Midland States Bancorp, Inc
Assets
Cash	38,803	8,318
Investment in common stock of subsidiaries	380,474	325,682
Accrued income taxes receivable	17	2,657
Other assets	2,047	3,644
Total assets	421,341	340,301
Liabilities:
Subordinated debt	54,508	61,859
Trust preferred debentures	37,405	37,057
Deferred Income Tax Liabilities, Net	5,037	5,087
Other liabilities	2,621	3,418
Total liabilities	99,571	107,421
Shareholders'equity	321,770	232,880
Total liabilities and shareholders’ equity	$ 421,341	$ 340,301

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Condensed Statements of Income
Interest expense	$ 4,022	$ 3,921	$ 4,126	$ 3,926	$ 3,848	$ 3,512	$ 2,925	$ 2,604	$ 15,995	$ 12,889	$ 8,543
Income before income taxes and equity in undistributed income of subsidiary	19,907	12,147	10,473	7,895	10,507	5,379	9,432	10,180	50,422	35,498	15,467
Actual income tax expense	8,327	4,102	3,683	2,777	2,811	1,928	2,762	3,590	18,889	11,091	4,651
Net income	$ 11,583	$ 8,051	$ 6,789	$ 5,119	$ 7,695	$ 3,445	$ 6,653	$ 6,531	31,542	24,324	10,816
Midland States Bancorp, Inc
Condensed Statements of Income
Dividends from subsidiary										14,500	13,600
Other income									428	1,070
Interest expense									(5,699)	(4,680)	(1,851)
Other expense									(1,130)	(132)	(60)
Income before income taxes and equity in undistributed income of subsidiary									(6,401)	10,758	11,689
Equity in undistributed income of subsidiary									36,256	11,760	(1,403)
Income before income taxes									29,855	22,518	10,286
Actual income tax expense									1,687	1,806	530
Net income									$ 31,542	$ 24,324	$ 10,816

PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income	$ 11,580	$ 8,045	$ 6,790	$ 5,118	$ 7,696	$ 3,451	$ 6,670	$ 6,590	$ 31,533	$ 24,407	$ 10,816
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of restricted stock awards									555	517	468
Compensation expense for stock option grants									492	413	240
Change in other assets									(6,399)	(2,774)	1,797
Change in other liabilities									(175)	(648)	1,391
Net cash provided by operating activities									25,543	73,645	21,498
Cash flows from investing activities:
Net cash paid in acquisitions									5,191	20,053	(85,021)
Net cash (used in) provided by investing activities									(360,350)	(229,458)	30,092
Cash flows from financing activities:
Payments made on subordinated debt									(8,000)
Proceeds from issuance of subordinated debt, net of issuance costs										55,325
Proceeds from other borrowings											14,000
Payments made on other borrowings										(14,177)	(7,857)
Cash dividends paid on common stock									(9,853)	(7,692)	(3,512)
Cash dividends paid on preferred stock											(4,254)
Proceeds from issuance of common stock in initial public offering, net of issuance costs									71,475
Proceeds from issuance of common stock under employee benefit plans									1,318	470	215
Net cash provided by (used in) financing activities									313,048	208,385	21,590
Net increase (decrease) in cash									(21,759)	52,572	73,180
Cash and cash equivalents:
Beginning of year				212,475				159,903	212,475	159,903	86,723
End of year	190,716				212,475				190,716	212,475	159,903
Supplemental disclosures of noncash investing and financing activities:
Issuance of common stock for preferred dividends											2,903
Cash portion of merger consideration accrued for at year-end											20,053
Private Placement
Supplemental disclosures of noncash investing and financing activities:
Issuance of common stock											16,156
Series C preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											23,600
Series D preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											22,470
Series E preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											6,300
Series F preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											5,000
Midland States Bancorp, Inc
Cash flows from operating activities:
Net income									31,542	24,324	10,816
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiary									(36,256)	(11,760)	1,403
Amortization of restricted stock awards									555	517	468
Compensation expense for stock option grants									492	413	240
Change in other assets									4,237	(3,559)	576
Change in other liabilities									225	(8,426)	(1,065)
Net cash provided by operating activities									795	1,509	12,438
Cash flows from investing activities:
Net cash paid in acquisitions										(20,053)	1,500
Capital injection to subsidiaries									(25,250)	(30,000)
Net cash (used in) provided by investing activities									(25,250)	(50,053)	1,500
Cash flows from financing activities:
Payments made on subordinated debt									(8,000)
Proceeds from issuance of subordinated debt, net of issuance costs										55,325
Proceeds from other borrowings											14,000
Payments made on other borrowings										(14,000)	(15,938)
Cash dividends paid on common stock									(9,853)	(7,692)	(3,512)
Cash dividends paid on preferred stock											(4,254)
Proceeds from issuance of common stock in initial public offering, net of issuance costs									(71,475)
Proceeds from issuance of common stock under employee benefit plans									1,318	470	215
Net cash provided by (used in) financing activities									54,940	34,103	(9,489)
Net increase (decrease) in cash									30,485	(14,441)	4,449
Cash and cash equivalents:
Beginning of year				$ 8,318				$ 22,759	8,318	22,759	18,310
End of year	$ 38,803				$ 8,318				$ 38,803	$ 8,318	22,759
Supplemental disclosures of noncash investing and financing activities:
Issuance of common stock for preferred dividends											2,903
Cash portion of merger consideration accrued for at year-end											20,053
Midland States Bancorp, Inc \| Private Placement
Supplemental disclosures of noncash investing and financing activities:
Issuance of common stock											16,156
Midland States Bancorp, Inc \| Series C preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											23,600
Midland States Bancorp, Inc \| Series D preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											22,470
Midland States Bancorp, Inc \| Series E preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											6,300
Midland States Bancorp, Inc \| Series F preferred stock
Supplemental disclosures of noncash investing and financing activities:
Conversion of preferred stock into common stock											$ 5,000

QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Interest income	$ 29,981	$ 31,186	$ 32,115	$ 27,967	$ 30,300	$ 28,949	$ 31,242	$ 27,305	$ 121,249	$ 117,796	$ 73,141
Interest expense	4,022	3,921	4,126	3,926	3,848	3,512	2,925	2,604	15,995	12,889	8,543
Net interest income	25,959	27,265	27,989	24,041	26,452	25,437	28,317	24,701	105,254	104,907	64,598
Provision for loan losses	2,445	1,392	629	1,125	1,052	6,699	2,379	997	5,591	11,127	92
Net interest income after provision for loan losses	23,514	25,873	27,360	22,916	25,400	18,738	25,938	23,704	99,663	93,780	64,506
Noninterest income	30,486	14,937	14,016	12,618	12,799	14,464	14,197	18,022	72,057	59,482	20,441
Noninterest expense	34,093	28,663	30,903	27,639	27,692	27,823	30,703	31,546	121,298	117,764	69,480
Income (loss) before income taxes (benefit)	19,907	12,147	10,473	7,895	10,507	5,379	9,432	10,180	50,422	35,498	15,467
Income taxes	8,327	4,102	3,683	2,777	2,811	1,928	2,762	3,590	18,889	11,091	4,651
Net income	11,580	8,045	6,790	5,118	7,696	3,451	6,670	6,590	31,533	24,407	10,816
Less: net (loss) income attributable to noncontrolling interest in subsidiaries	(3)	(6)	1	(1)	1	6	17	59	(9)	83
Net income attributable to Midland States Bancorp, Inc.	$ 11,583	$ 8,051	$ 6,789	$ 5,119	$ 7,695	$ 3,445	$ 6,653	$ 6,531	$ 31,542	$ 24,324	$ 10,816
Per common share data
Basic earnings per common share (In dollars per share)	$ 0.74	$ 0.51	$ 0.51	$ 0.43	$ 0.64	$ 0.29	$ 0.56	$ 0.55	$ 2.22	$ 2.03	$ 0.53
Diluted earnings per common share (In dollars per share)	$ 0.72	$ 0.51	$ 0.50	$ 0.42	$ 0.63	$ 0.28	$ 0.55	$ 0.54	$ 2.17	$ 2.00	$ 0.53

SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Millions		12 Months Ended
	Jan. 26, 2017 USD ($) item $ / shares	Dec. 31, 2016 USD ($) $ / shares
Subsequent Event [Line Items]
Number of days considered for weighted average stock price		10 days
Weighted average stock price \| $ / shares		$ 35.18
Centrue
Subsequent Event [Line Items]
Total assets		$ 977.8
Net loans		676.9
Total deposits		$ 740.0
Common stock fixed exchange ratio		0.7604
Subsequent Events \| Centrue
Subsequent Event [Line Items]
Total Purchase consideration	$ 175.1
Purchase consideration per share \| $ / shares	$ 26.75
Number of service banking centers acquired \| item	20
Business combination, purchase price, percentage in stock	65.00%
Business combination, purchase price, percentage in cash	35.00%

CASH AND DUE FROM BANKS (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
CASH AND DUE FROM BANKS
Required Cash Reserve	$ 22.6	$ 20.3

MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	$ 5,644,509	$ 5,475,804
Commercial FHA Mortgage Loans
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	3,811,066	3,649,524
Residential mortgage loans
Servicing Assets at Fair Value [Line Items]
Total loans serviced for others	$ 1,833,443	$ 1,826,280