Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 20, 2019 | Jun. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Midland States Bancorp, Inc. | ||
Entity Central Index Key | 1,466,026 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 728,830,258 | ||
Entity Common Stock, Shares Outstanding | 24,050,292 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 210,780 | $ 214,519 |
Federal funds sold | 2,920 | 683 |
Cash and cash equivalents | 213,700 | 215,202 |
Investment securities available for sale, at fair value | 657,451 | 450,525 |
Equity securities, at fair value | 3,334 | |
Loans | 4,137,551 | 3,226,678 |
Allowance for loan losses | (20,903) | (16,431) |
Total loans, net | 4,116,648 | 3,210,247 |
Loans held for sale, at fair value | 30,401 | 50,089 |
Premises and equipment, net | 94,840 | 76,162 |
Other real estate owned | 3,483 | 5,708 |
Nonmarketable equity securities | 42,472 | 34,796 |
Accrued interest receivable | 16,560 | 11,715 |
Mortgage servicing rights, at lower of cost or fair value | 53,447 | 56,352 |
Mortgage servicing rights held for sale | 3,545 | 10,176 |
Intangible assets | 37,376 | 16,932 |
Goodwill | 164,673 | 98,624 |
Cash surrender value of life insurance policies | 138,783 | 113,366 |
Accrued income taxes receivable | 8,809 | 8,358 |
Deferred tax assets, net | 1,251 | 12,024 |
Other assets | 50,900 | 42,425 |
Total assets | 5,637,673 | 4,412,701 |
Deposits: | ||
Noninterest-bearing | 972,164 | 724,443 |
Interest-bearing | 3,102,006 | 2,406,646 |
Total deposits | 4,074,170 | 3,131,089 |
Short-term borrowings | 124,235 | 156,126 |
FHLB advances and other borrowings | 640,631 | 496,436 |
Subordinated debt | 94,134 | 93,972 |
Trust preferred debentures | 47,794 | 47,330 |
Accrued interest payable | 4,855 | 2,531 |
Other liabilities | 43,329 | 35,672 |
Total liabilities | 5,029,148 | 3,963,156 |
Shareholders' Equity: | ||
Preferred stock, Series H, $2 par value, $1,000 per share liquidation value; 2,636 shares authorized, issued and outstanding at December 31, 2018 and 2017, respectively | 2,781 | 2,970 |
Common stock, $0.01 par value; 40,000,000 shares authorized; 23,751,798 and 19,122,049 shares issued and outstanding at December 31, 2018 and 2017, respectively | 238 | 191 |
Capital surplus | 473,833 | 330,148 |
Retained earnings | 133,781 | 114,478 |
Accumulated other comprehensive (loss) income | (2,108) | 1,758 |
Total shareholders' equity | 608,525 | 449,545 |
Total liabilities and shareholders' equity | $ 5,637,673 | $ 4,412,701 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Liquidation value | $ 1,000 | $ 1,000 |
Preferred stock, par value | $ 2 | $ 2 |
Preferred stock, shares authorized | 2,636 | 2,636 |
Preferred stock, shares issued | 2,636 | 2,636 |
Preferred stock, shares outstanding | 2,636 | 2,636 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 23,751,798 | 19,122,049 |
Common stock, shares outstanding | 23,751,798 | 19,122,049 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loans: | |||
Taxable | $ 194,688 | $ 135,898 | $ 102,211 |
Tax exempt | 3,327 | 1,255 | 1,155 |
Loans held for sale | 1,749 | 2,297 | 3,320 |
Investment securities: | |||
Taxable | 13,894 | 6,763 | 9,294 |
Tax exempt | 4,553 | 3,741 | 3,634 |
Nonmarketable equity securities | 1,980 | 1,194 | 687 |
Federal funds sold and cash investments | 3,176 | 1,965 | 948 |
Total interest income | 223,367 | 153,113 | 121,249 |
Interest expense: | |||
Deposits | 22,054 | 12,132 | 8,936 |
Short-term borrowings | 698 | 379 | 303 |
FHLB advances and other borrowings | 11,347 | 4,594 | 1,057 |
Subordinated debt | 6,056 | 4,054 | 3,858 |
Trust preferred debentures | 3,125 | 2,292 | 1,841 |
Total interest expense | 43,280 | 23,451 | 15,995 |
Net interest income | 180,087 | 129,662 | 105,254 |
Provision for loan losses | 9,430 | 9,556 | 5,591 |
Net interest income after provision for loan losses | 170,657 | 120,106 | 99,663 |
Noninterest income: | |||
Commercial FHA revenue | 10,980 | 17,752 | 22,064 |
Residential mortgage banking revenue | 5,729 | 9,119 | 13,389 |
Wealth management revenue | 20,513 | 13,340 | 8,091 |
Service charges on deposit accounts | 10,440 | 5,975 | 3,904 |
Interchange revenue | 10,674 | 5,353 | 3,750 |
FDIC loss-sharing expense | (1,661) | ||
Gain on sales of investment securities, net | 464 | 222 | 14,702 |
Other-than-temporary impairment on investment securities | (824) | ||
Gain on sales of other real estate owned | 544 | 145 | 113 |
Other income | 12,447 | 7,456 | 8,529 |
Total noninterest income | 71,791 | 59,362 | 72,057 |
Noninterest expense: | |||
Salaries and employee benefits | 97,410 | 78,712 | 66,293 |
Occupancy and equipment | 18,914 | 14,659 | 13,080 |
Data processing | 26,062 | 15,171 | 10,658 |
FDIC insurance | 2,209 | 1,806 | 1,707 |
Professional | 12,782 | 14,359 | 8,049 |
Marketing | 4,757 | 3,290 | 2,733 |
Communications | 4,405 | 2,473 | 2,150 |
Loan expense | 2,033 | 1,954 | 1,957 |
Other real estate owned | 524 | 800 | 935 |
Amortization of intangible assets | 6,956 | 3,325 | 2,147 |
Loss on mortgage servicing rights held for sale | 458 | 4,059 | |
Other expense | 15,133 | 12,389 | 11,580 |
Total noninterest expense | 191,643 | 152,997 | 121,289 |
Income before income taxes | 50,805 | 26,471 | 50,431 |
Income taxes | 11,384 | 10,415 | 18,889 |
Net income | 39,421 | 16,056 | 31,542 |
Preferred stock dividends and premium amortization | 141 | 83 | |
Net income available to common shareholders | $ 39,280 | $ 15,973 | $ 31,542 |
Per common share data: | |||
Basic earnings per common share | $ 1.69 | $ 0.89 | $ 2.22 |
Diluted earnings per common share | $ 1.66 | $ 0.87 | $ 2.17 |
Weighted average common shares outstanding | 23,130,475 | 17,781,631 | 14,130,552 |
Weighted average diluted common shares outstanding | 23,549,025 | 18,283,214 | 14,428,839 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 39,421 | $ 16,056 | $ 31,542 |
Investment securities available for sale: | |||
Unrealized (losses) gains that occurred during the period | (4,845) | 443 | 3,556 |
Reclassification adjustment for securities transferred from held to maturity to available for sale | 3,366 | ||
Reclassification adjustment for realized net gains on sales of investment securities included in net income | (464) | (222) | (14,702) |
Income tax effect | 1,443 | (1,104) | 4,469 |
Change in investment securities available for sale, net of tax | (3,866) | 2,483 | (6,677) |
Investment securities held to maturity: | |||
Amortization of unrealized gain on investment securities transferred from available-for-sale | (188) | (66) | |
Income tax effect | 73 | 29 | |
Change in investment securities held to maturity, net of tax | (115) | (37) | |
Cash flow hedges: | |||
Change in fair value of interest rate swap | 126 | ||
Income tax effect | (51) | ||
Change in cash flow hedges, net of tax | 75 | ||
Other comprehensive (loss) income, net of tax | (3,866) | 2,368 | (6,639) |
Total comprehensive income | $ 35,555 | $ 18,424 | $ 24,903 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Alpine BankCommon stock | Alpine BankCapital surplus | Alpine Bank | CedarPointCommon stock | CedarPointCapital surplus | CedarPoint | CentruePreferred stock | CentrueCommon stock | CentrueCapital surplus | Centrue | Preferred stock | Common stock | Capital surplus | Retained earnings | Accumulated other comprehensive (loss) income | Total |
Beginning Balance at Dec. 31, 2015 | $ 118 | $ 135,909 | $ 90,824 | $ 6,029 | $ 232,880 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 31,542 | 31,542 | ||||||||||||||
Compensation expense for stock option grants | 492 | 492 | ||||||||||||||
Amortization of restricted stock awards | 555 | 555 | ||||||||||||||
Common dividends declared | (9,853) | (9,853) | ||||||||||||||
Initial public offering of 3,590,065 shares of common stock, net of issuance costs | 36 | 71,439 | 71,475 | |||||||||||||
Issuance of common stock under employee benefit plans | 1 | 1,317 | 1,318 | |||||||||||||
Other comprehensive income (loss) | (6,639) | (6,639) | ||||||||||||||
Ending Balance at Dec. 31, 2016 | 155 | 209,712 | 112,513 | (610) | 321,770 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 16,056 | 16,056 | ||||||||||||||
Compensation expense for stock option grants | 548 | 548 | ||||||||||||||
Amortization of restricted stock awards | 836 | 836 | ||||||||||||||
Preferred dividends declared | (184) | (184) | ||||||||||||||
Preferred stock, premium amortization | $ (101) | 101 | 101 | |||||||||||||
Common dividends declared | (14,008) | (14,008) | ||||||||||||||
Acquisition | $ 1 | $ 3,350 | $ 3,351 | $ 3,071 | $ 32 | $ 112,480 | $ 115,583 | |||||||||
Issuance of common stock under employee benefit plans | 3 | 3,222 | 3,225 | |||||||||||||
Other comprehensive income (loss) | 2,368 | 2,368 | ||||||||||||||
Ending Balance at Dec. 31, 2017 | 2,970 | 191 | 330,148 | 114,478 | 1,758 | 449,545 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 39,421 | 39,421 | ||||||||||||||
Compensation expense for stock option grants | 334 | 334 | ||||||||||||||
Amortization of restricted stock awards | 1,199 | 1,199 | ||||||||||||||
Preferred dividends declared | (330) | (330) | ||||||||||||||
Preferred stock, premium amortization | (189) | 189 | 189 | |||||||||||||
Common dividends declared | (19,977) | (19,977) | ||||||||||||||
Acquisition | $ 45 | $ 139,876 | $ 139,921 | |||||||||||||
Issuance of common stock under employee benefit plans | 2 | 2,276 | 2,278 | |||||||||||||
Other comprehensive income (loss) | (3,866) | (3,866) | ||||||||||||||
Ending Balance at Dec. 31, 2018 | $ 2,781 | $ 238 | $ 473,833 | $ 133,781 | $ (2,108) | $ 608,525 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common dividend declared, per share | $ 0.88 | $ 0.80 | $ 0.72 |
IPO | |||
Common stock shares | 3,590,065 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 39,421 | $ 16,056 | $ 31,542 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for loan losses | 9,430 | 9,556 | 5,591 |
Depreciation on premises and equipment | 6,166 | 5,014 | 5,080 |
Amortization of intangible assets | 6,956 | 3,325 | 2,147 |
FDIC loss-sharing expense | 1,661 | ||
Compensation expense for stock option grants | 334 | 548 | 492 |
Amortization of restricted stock awards | 1,199 | 836 | 555 |
Increase in cash surrender value of life insurance | (3,579) | (2,791) | (2,150) |
Provision for deferred income taxes | 10,522 | 12,032 | 14,541 |
Investment securities amortization, net | 3,898 | 1,960 | 1,133 |
Other-than-temporary impairment on investment securities | 824 | ||
Gain on sales of investment securities, net | (464) | (222) | (14,702) |
Gain on sales of other real estate owned | (544) | (145) | (113) |
Impairment of other real estate owned | 301 | 244 | 247 |
Origination of loans held for sale | (557,305) | (778,626) | (1,176,716) |
Proceeds from sales of loans held for sale | 590,282 | 815,471 | 1,184,739 |
Gain on loans sold and held for sale | (11,165) | (24,295) | (35,127) |
Loss on disposals of premises and equipment | 385 | 64 | 97 |
Gain on proceeds from bank-owned life insurance | (709) | (732) | |
Amortization of mortgage servicing rights | 2,949 | 5,107 | 6,141 |
(Recapture) impairment of mortgage servicing rights | (449) | 2,324 | 3,135 |
Loss on mortgage servicing rights held for sale | 458 | 4,059 | |
Net change in operating assets and liabilities: | |||
Accrued interest receivable | (431) | (1,137) | (505) |
Accrued interest payable | 1,785 | 1,211 | 66 |
Accrued income taxes receivable | (451) | (2,496) | 2,892 |
Other assets | (5,712) | 5,189 | (6,399) |
Other liabilities | 3,783 | (2,835) | (313) |
Net cash provided by operating activities | 97,060 | 70,449 | 24,126 |
Investment securities available for sale: | |||
Purchases | (76,289) | (259,098) | (198,680) |
Sales | 20,178 | 22,595 | 115,999 |
Maturities and payments | 131,220 | 247,929 | 74,948 |
Investment securities held to maturity: | |||
Purchases | (3,155) | (2,617) | |
Maturities | 16,889 | 11,019 | |
Equity Securities: | |||
Purchases | (59) | ||
Sales | 7,733 | ||
Net increase in loans | (131,114) | (238,398) | (335,943) |
Proceeds from sale of premises and equipment | 33 | 4,286 | 11 |
Purchases of premises and equipment | (7,200) | (6,182) | (2,179) |
Proceeds from sales of mortgage servicing rights held for sale | 12,994 | ||
Proceeds from settlements of bank-owned life insurance | 1,449 | 1,385 | |
Purchase of bank-owned life insurance | (20,000) | ||
Purchases of nonmarketable equity securities | (20,737) | (18,376) | (4,103) |
Sales of nonmarketable equity securities | 15,099 | 11,233 | 90 |
Proceeds from sales of other real estate owned | 3,879 | 6,189 | 6,199 |
Net cash acquired (paid) in acquisitions | 36,153 | (18,519) | (5,191) |
Net cash used in investing activities | (6,661) | (234,607) | (359,062) |
Cash flows from financing activities: | |||
Net (decrease) increase in deposits | (168,049) | (13,144) | 36,718 |
Net (decrease) increase in short-term borrowings | (31,891) | 10,135 | 24,019 |
Proceeds from FHLB borrowings | 1,017,080 | 447,357 | 1,015,000 |
Payments made on FHLB borrowings | (886,726) | (320,857) | (817,500) |
Proceeds from other borrowings | 39,964 | ||
Payments made on other borrowings | (4,286) | (3,198) | |
Proceeds from issuance of subordinated debt | 39,354 | ||
Payments made on subordinated debt | (8,000) | ||
Cash dividends paid on preferred stock | (330) | (184) | |
Cash dividends paid on common stock | (19,977) | (14,008) | (9,853) |
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 | 2,278 | 3,225 | 1,318 |
Net cash (used in) provided by financing activities | (91,901) | 188,644 | 313,177 |
Net (decrease) increase in cash and cash equivalents | (1,502) | 24,486 | (21,759) |
Cash and cash equivalents: | |||
Beginning of period | 215,202 | 190,716 | 212,475 |
End of period | 213,700 | 215,202 | 190,716 |
Cash payments for: | |||
Interest paid on deposits and borrowed funds | 40,956 | 21,965 | 15,929 |
Income tax paid | 580 | 653 | 1,073 |
Supplemental disclosures of noncash investing and financing activities: | |||
Transfer of investment securities held to maturity to investment securities available for sale | 64,520 | ||
Transfer of investment securities available for sale to equity securities | 2,830 | ||
Transfer of loans to other real estate owned | 1,104 | 3,718 | $ 4,839 |
Transfer of premises and equipment to assets held for sale | 3,988 | ||
Transfer of mortgage servicing rights at lower of cost or market to mortgage servicing rights held for sale | $ 3,649 | $ 14,234 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | MIDLAND STATES BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Nature of Operations Midland States Bancorp, Inc. (the “Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Its wholly-owned banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, multifamily and healthcare facility FHA financing is provided through Love Funding, our non-bank subsidiary . On February 28, 2018, we completed the acquisition of Alpine Bancorporation, Inc. (“Alpine”) and its banking subsidiary, Alpine Bank & Trust Co. (“Alpine Bank”), as more fully described in Note 2 to the consolidated financial statements. Through the Alpine acquisition, we greatly expanded our commercial and retail banking presence in northern Illinois. Our principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. We have derived income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investment securities. We have also derived income from noninterest sources, such as: fees received in connection with various lending and deposit services; wealth management services; residential mortgage loan originations, sales and servicing; and, from time to time, gains on sales of assets. Our income sources also include Love Funding’s commercial FHA loan origination and servicing income. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for loan losses and income tax expense. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for annual periods presented herein, have been included. Certain reclassifications of 2017 and 2016 amounts have been made to conform to the 2018 presentation but do not have an effect on net income. Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying consolidated financial statements. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days. Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities and non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as equity, available for sale or held to maturity at the time of purchase. Investments in stock of a publicly traded company or in mutual funds are classified as equity securities. Equity securities are recorded at fair value with unrealized gains and losses recognized in 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; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized over the estimated life or to the earliest call date and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”). The Bank is a member of the FHLB system as well as its regional FRB. Members of the FHLB are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock and FRB stock are both carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Loans Non‑Purchased Credit Impaired loans (“Non-PCI loans”). 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 financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the leased property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans (“PCI loans”). We account for PCI loans under ASC 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually, obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods. Loans Held for Sale Loans held for sale consist of residential and commercial FHA mortgage loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in commercial FHA revenue and residential mortgage banking revenue on the consolidated statements of income. Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 22 in the consolidated financial statements for additional information on the mortgage repurchase reserve. Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income. Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are typically amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value. Mortgage Servicing Rights When loans are sold with servicing retained, a servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. As the Company has not elected to subsequently measure servicing assets under the fair value measurement method, the Company follows the amortization method. 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 FHA mortgages as earned based on the specific contractual terms. This revenue, along with changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Mortgage Servicing Rights Held for Sale Mortgage servicing rights held for sale consist of residential mortgage servicing rights that management has committed to a plan to sell and has the ability to sell them to a buyer in their present condition. Mortgage servicing rights held for sale are carried at the lower of their carrying value or fair value less estimated costs to sell. Decr |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
ACQUISITIONS | |
ACQUISITIONS | Note 2 – Acquisitions Alpine Bancorporation, Inc. On February 28, 2018, the Company completed its acquisition of Alpine and its banking subsidiary, Alpine Bank, which operated 19 locations in northern Illinois. In the aggregate, the Company acquired Alpine for consideration valued at approximately $173.2 million, which consisted of approximately $33.3 million in cash and the issuance of 4,463,200 shares of the Company’s common stock . The acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while $22.4 million of transaction and integration costs have been expensed as incurred through December 31, 2018. Management’s preliminary valuation of the tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, and the resulting allocation of the consideration paid for the allocation is reflected in the table below. Prior to the end of the one-year measurement period for finalizing the consideration paid allocation, if information becomes available which would indicate adjustments are required to the allocation, such adjustments will be included in the allocation in the reporting period in which the adjustment amounts are determined. During the fourth quarter of 2018, the Company updated its preliminary valuation of mortgage servicing rights, which required a measurement period adjustment of $629,000 to increase goodwill. Centrue Financial Corporation On June 9, 2017, the Company completed its acquisition of Centrue and its banking subsidiary, Centrue Bank, which operated 20 full-service banking centers located principally in northern Illinois. In the aggregate, the Company acquired Centrue for approximately $176.6 million, which consisted of approximately $61.0 million in cash and the issuance of 3,219,238 shares of the Company’s common stock, 181 shares of Series G preferred stock and 2,635.5462 shares of Series H preferred stock. This acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while $17.9 million of transaction and integration costs were expensed as incurred. As of June 30, 2018, the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of Centrue, resulting in no material change to acquisition accounting adjustments. A summary of the fair value of the assets acquired, liabilities assumed and resulting goodwill are included in the table below. (dollars in thousands) Alpine Centrue Assets acquired: Cash and cash equivalents $ 69,459 $ 42,461 Investment securities available for sale 293,428 149,013 Equity securities 8,372 — Loans 786,186 679,582 Loans held for sale 3,416 531 Premises and equipment 18,126 17,147 Other real estate owned 53 4,983 Nonmarketable equity securities 2,038 8,168 Accrued interest receivable 4,414 2,376 Mortgage servicing rights — 1,933 Mortgage servicing rights held for sale 3,068 — Intangible assets 27,400 11,070 Cash surrender value of life insurance policies 22,578 36,349 Deferred tax assets, net — 34,339 Other assets 4,770 2,256 Total assets acquired 1,243,308 990,208 Liabilities assumed: Deposits 1,111,130 739,867 Short-term borrowings — 14,434 FHLB advances and other borrowings 18,127 95,332 Trust preferred debentures — 7,565 Accrued interest payable 539 275 Deferred tax liabilities, net 1,749 — Other liabilities 4,500 3,600 Total liabilities assumed 1,136,045 861,073 Net assets acquired 107,263 129,135 Goodwill 65,964 47,444 Total consideration paid $ 173,227 $ 176,579 Intangible assets: Core deposit intangible $ 21,100 $ 11,070 Customer relationship intangible 6,300 — Total intangible assets $ 27,400 $ 11,070 Estimated useful lives: Core deposit intangible 13 years 8 years Customer relationship intangible 13 years N/A Goodwill arising from the acquisitions consists largely of the synergies and economies of scale expected from combining the operations of Alpine and Centrue into the Company. The goodwill is assigned as part of the Company’s banking reporting unit. The portion of the consideration paid allocated to goodwill will not be deductible for tax purposes. The identifiable assets acquired from Alpine and Centrue included core deposit intangibles and customer relationship intangibles, which are being amortized on an accelerated basis as shown above. Acquired loan data for Alpine and Centrue can be found in the table below: Best Estimate at Acquisition Date of Fair Value Gross Contractual Contractual Cash of Acquired Loans Amounts Receivable Flows Not Expected (dollars in thousands) at Acquisition Date at Acquisition Date to be Collected Alpine: Acquired receivables subject to ASC 310-30 $ 34,993 $ 50,342 $ 9,254 Acquired receivables not subject to ASC 310-30 751,193 774,836 4,244 Centrue: Acquired receivables subject to ASC 310-30 $ 11,381 $ 20,253 $ 7,227 Acquired receivables not subject to ASC 310-30 668,201 821,338 4,835 The unaudited pro-forma financial information below for years ended December 31, 2018 and 2017 gives effect to the Alpine acquisition as if it had occurred on January 1, 2017, which combines the historical results of Alpine with the Company’s consolidated statements of income, adjusted for the impact of the application of the acquisition method of accounting including loan discount accretion, intangible assets amortization, and deposit premium accretion, net of taxes. The unaudited pro-forma financial information also gives effect to the Centrue acquisition that closed on June 9, 2017 as if that transaction became effective January 1, 2017. The unaudited pro-forma financial information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations had the acquisition actually occurred on January 1, 2017. No assumptions have been applied regarding revenue enhancements, expense efficiencies or asset dispositions. Only the acquisition related expenses that have been incurred as of December 31, 2018 are included in net income in the table below. Acquisition related expenses associated with Alpine that were recognized and are included in the unaudited pro-forma net income for the year ended December 31, 2018 totaled $21.5 million on a pre-tax basis. (dollars in thousands, except per share data) 2018 2017 Revenue (1) $ 264,670 $ 280,538 Net income 42,261 31,188 Diluted earnings per common share $ 1.73 $ 1.28 (1) Net interest income plus noninterest income CedarPoint Investment Advisors, Inc. On March 28, 2017, the Company acquired all of the outstanding capital stock of CedarPoint Investment Advisors, Inc., an SEC registered investment advisory firm, pursuant to an Agreement and Plan of Merger, dated as of March 15, 2017. CedarPoint had approximately $180.0 million of assets under administration. The Company acquired CedarPoint for $3.7 million, which consisted of the issuance of 102,000 shares of the Company’s common stock and an accrual in other liabilities of $345,000 for the fair value of 18,000 shares that will be held in a special purpose escrow account (the “escrow shares”) as additional consideration until at least March 31, 2019. Payout of the escrow shares is contingent on CedarPoint reaching certain target revenue levels. Intangible assets recognized as a result of the transaction consisted of approximately $2.4 million in goodwill and $2.0 million in customer relationship intangibles. The customer relationship intangibles are being amortized on a straight-line basis over 12 years. |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 was $33.6 million and $25.0 million, respectively. The Bank maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Bank has not experienced any losses in such accounts. The Bank believes it is not exposed to any significant credit risk from cash and cash equivalents. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | Note 4 – Investment Securities Investment securities as of December 31, 2018 and 2017 were as follows: 2018 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Available for sale securities U.S. Treasury securities $ 25,018 $ — $ 368 $ 24,650 Government sponsored entity debt securities 76,554 17 887 75,684 Agency mortgage-backed securities 329,690 371 3,756 326,305 State and municipal securities 156,795 3,282 815 159,262 Corporate securities 72,302 383 1,135 71,550 Total available for sale securities $ 660,359 $ 4,053 $ 6,961 $ 657,451 Equity securities (1) $ 3,334 2017 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Available for sale securities U.S. Treasury securities $ 28,005 $ — $ 287 $ 27,718 Government sponsored entity debt securities 25,445 41 275 25,211 Agency mortgage-backed securities 233,606 882 2,101 232,387 State and municipal securities 99,449 3,632 514 102,567 Corporate securities 58,904 1,087 179 59,812 Equity securities (1) 2,715 140 25 2,830 Total available for sale securities $ 448,124 $ 5,782 $ 3,381 $ 450,525 (1) As a result of accounting guidance adopted in the first quarter of 2018, equity securities are no longer presented within available for sale securities and are now presented within equity securities in the consolidated balance sheet for the current period. For further discussion of this guidance, see Note 1 to the consolidated financial statements. During 2017, the Company transferred its held to maturity (“HTM”) investment securities portfolio to investment securities available for sale (“AFS”), which had an amortized cost and fair value of $64.5 million and $67.9 million, respectively, resulting in $3.4 million of unrealized gains on investment securities available for sale at time of transfer. As a result of the Centrue acquisition discussed in Note 2 to the consolidated financial statements, the Company underwent a capital planning assessment which included transferring all HTM securities to AFS securities. Unrealized losses and fair values for investment securities as of December 31, 2018 and 2017, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows: 2018 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value loss value loss value loss Available for sale securities U.S. Treasury securities $ 5,012 $ 1 $ 19,638 $ 367 $ 24,650 $ 368 Government sponsored entity debt securities 51,717 195 23,223 692 74,940 887 Agency mortgage-backed securities 139,115 528 126,561 3,228 265,676 3,756 State and municipal securities 15,791 146 27,692 669 43,483 815 Corporate securities 32,616 575 8,535 560 41,151 1,135 Total available for sale securities $ 244,251 $ 1,445 $ 205,649 $ 5,516 $ 449,900 $ 6,961 2017 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value loss value loss value loss Available for sale securities U.S. Treasury securities $ 19,758 $ 251 $ 7,960 $ 36 $ 27,718 $ 287 Government sponsored entity debt securities 24,168 275 — — 24,168 275 Agency mortgage-backed securities 124,192 1,500 19,530 601 143,722 2,101 State and municipal securities 29,338 331 5,889 183 35,227 514 Corporate securities 5,917 85 3,463 94 9,380 179 Equity securities (1) 2,603 25 — — 2,603 25 Total available for sale securities $ 205,976 $ 2,467 $ 36,842 $ 914 $ 242,818 $ 3,381 (1) As a result of accounting guidance adopted in the first quarter of 2018, equity securities are no longer presented within available for sale securities and are now presented within equity securities in the consolidated balance sheet for the current period. For further discussion of this guidance, see Note 1 to the consolidated financial statements. At December 31, 2018 and 2017, 291 and 173 investment securities available for sale, respectively, had unrealized losses with aggregate depreciation of 1.52% and 1.37%, 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. The Company does not have the intent to sell and it is not more likely than not that it will be required to sell a security in an unrealized loss position; therefore, the Company does not consider these securities to be other than temporarily impaired at December 31, 2018. During 2018 and 2017, the Company did not recognize OTTI losses on its investment securities. During 2016, the Company determined that three non-agency mortgage-backed securities, covered by our FDIC loss share agreement, which were sold in October 2016, 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. The following is a summary of the amortized cost and fair value of available-for-sale investment securities, by maturity, at December 31, 2018. Expected maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be prepaid without penalties. The maturities of all other available-for-sale investment securities are based on final contractual maturity. Amortized Fair (dollars in thousands) cost value Available for sale securities: Within one year $ 39,092 $ 39,087 After one year through five years 122,564 122,554 After five years through ten years 138,494 138,937 After ten years 30,519 30,568 Mortgage-backed securities 329,690 326,305 Total available for sale securities $ 660,359 $ 657,451 Proceeds from the sale of securities available for sale were $20.2 million, $22.6 million and $116.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Gross realized gains from the sale of securities available for sale were $542,000, $242,000 and $15.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. Gross realized losses were $25,000, $20,000 and $837,000 for the years ended December 31, 2018, 2017 and 2016, respectively. On October 4, 2016, the Company sold its previously covered non-agency mortgage-backed securities which had a carrying value of $72.1 million. These securities were covered under the loss-sharing agreement we entered into with the FDIC in connection with our 2009 acquisition. This agreement was terminated on October 3, 2016. As a result of the sale, the Company realized a gain totaling $14.3 million. Proceeds from the sale of equity securities were $7.7 million for the year ended December 31, 2018. Gross realized losses from the sale of equity securities were $53,000 and there were no gross realized gains for the year ended December 31, 2018. During the year ended December 31, 2018, the Company recognized net unrealized losses of $10,000, which was recorded in noninterest income on the consolidated statements of income. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2018 | |
LOANS | |
LOANS | Note 5 – Loans The following table presents total loans outstanding by portfolio, which includes Non-PCI loans and PCI loans, as of December 31, 2018 and 2017: 2018 2017 Non-PCI PCI Non-PCI PCI (dollars in thousands) Loans Loans (1) Total Loans Loans (1) Total Loans: Commercial $ 806,027 $ 4,857 $ 810,884 $ 553,257 $ 2,673 $ 555,930 Commercial real estate 1,619,903 19,252 1,639,155 1,427,076 12,935 1,440,011 Construction and land development 223,898 8,331 232,229 199,853 734 200,587 Total commercial loans 2,649,828 32,440 2,682,268 2,180,186 16,342 2,196,528 Residential real estate 569,289 8,759 578,048 447,602 5,950 453,552 Consumer 611,408 1,776 613,184 371,286 169 371,455 Lease financing 264,051 — 264,051 205,143 — 205,143 Total loans $ 4,094,576 $ 42,975 $ 4,137,551 $ 3,204,217 $ 22,461 $ 3,226,678 (1) The unpaid principal balance for PCI loans totaled $56.9 million and $32.8 million as of December 31, 2018 and 2017, respectively. Total loans include net deferred loan fees of $11.6 million and $10.1 million at December 31, 2018 and 2017, respectively, and unearned discounts of $29.2 million and $20.7 million within the lease financing portfolio at December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, the Company had commercial and residential loans held for sale, that were originated with the intent to sell, totaling $30.4 million and $50.1 million, respectively. During the years ended December 31, 2018 and 2017, the Company sold commercial and residential real estate loans with proceeds totaling $590.3 million and $815.5 million, 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 —Our equipment leasing business provides financing leases to varying types of businesses, nationwide, for purchases of business equipment and software. The financing is secured by a first priority interest in the financed assets and generally requires monthly payments. Commercial, commercial real estate, and construction and land development loans are collectively referred to as the Company’s commercial loan portfolio, while residential real estate 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 $22.4 million at December 31, 2018 and 2017, respectively. During 2018 and 2017, there were $11.1 million and $4.0 million, respectively, of new loans and other additions, while repayments and other reductions totaled $6.9 million and $8.1 million, respectively. Credit Quality Monitoring The Company maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally within the Company’s four main regions, which include eastern, northern and southern Illinois and the St. Louis metropolitan area. Our equipment leasing business provides financing to business customers across the country. The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities. 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, 2018 and 2017: 2018 2017 Commercial Construction Commercial Construction Real and Land Real and Land (dollars in thousands) Commercial Estate Development Total Commercial Estate Development Total Acceptable credit quality $ 748,296 $ 1,536,127 $ 218,798 $ 2,503,221 $ 510,928 $ 1,384,630 $ 191,872 $ 2,087,430 Special mention 35,103 15,306 3,448 53,857 12,290 11,497 — 23,787 Substandard 14,139 46,976 — 61,115 27,718 14,695 — 42,413 Substandard – nonaccrual 8,489 21,494 1,171 31,154 1,266 12,482 785 14,533 Doubtful — — — — — — — — Not graded — — 481 481 1,055 3,772 7,196 12,023 Total (excluding PCI) $ 806,027 $ 1,619,903 $ 223,898 $ 2,649,828 $ 553,257 $ 1,427,076 $ 199,853 $ 2,180,186 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, 2018 and 2017: 2018 2017 Residential Lease Residential Lease (dollars in thousands) Real Estate Consumer Financing Total Real Estate Consumer Financing Total Performing $ 562,019 $ 610,839 $ 263,094 $ 1,435,952 $ 441,418 $ 370,999 $ 203,797 $ 1,016,214 Impaired 7,270 569 957 8,796 6,184 287 1,346 7,817 Total (excluding PCI) $ 569,289 $ 611,408 $ 264,051 $ 1,444,748 $ 447,602 $ 371,286 $ 205,143 $ 1,024,031 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, 2018 and 2017 do not include $43.0 million and $22.5 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, 2018 and 2017 is as follows: (dollars in thousands) 2018 2017 Nonaccrual loans: Commercial $ 8,489 $ 1,266 Commercial real estate 21,494 12,482 Construction and land development 1,171 785 Residential real estate 5,894 5,204 Consumer 388 234 Lease financing 751 1,346 Total nonaccrual loans 38,187 21,317 Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial 4 2,538 Commercial real estate 149 — Construction and land development 85 — Residential real estate 566 51 Consumer 51 53 Lease financing 206 — Total accruing loans contractually past due 90 days or more as to interest or principal payments 1,061 2,642 Loans modified under troubled debt restructurings and still accruing: Commercial 435 299 Commercial real estate 2,225 1,515 Construction and land development 51 58 Residential real estate 810 929 Consumer 130 — Lease financing — — Total loans modified under troubled debt restructurings and still accruing 3,651 2,801 Total impaired loans (excluding PCI) $ 42,899 $ 26,760 There was no interest income recognized on nonaccrual loans during 2018, 2017 and 2016 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 $1.8 million, $860,000 and $718,000 in 2018, 2017 and 2016, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $97,000, $85,000 and $339,000 in 2018, 2017 and 2016, respectively. The following table presents impaired loans (excluding PCI loans) by portfolio and related valuation allowance, as of December 31, 2018 and 2017: 2018 2017 Unpaid Related Unpaid Related Recorded Principal Valuation Recorded Principal Valuation (dollars in thousands) Investment Balance Allowance Investment Balance Allowance Impaired loans with a valuation allowance: Commercial $ 7,945 $ 8,102 $ 4,448 $ 3,237 $ 3,297 $ 526 Commercial real estate 7,496 13,844 523 2,297 3,508 329 Construction and land development 171 171 54 103 102 10 Residential real estate 4,055 4,662 554 4,028 4,705 566 Consumer 428 444 45 266 279 29 Lease financing 766 766 361 1,064 1,064 345 Total impaired loans with a valuation allowance 20,861 27,989 5,985 10,995 12,955 1,805 Impaired loans with no related valuation allowance: Commercial 983 4,392 — 866 5,782 — Commercial real estate 16,372 16,921 — 11,700 17,359 — Construction and land development 1,136 1,136 — 740 780 — Residential real estate 3,215 3,516 — 2,156 2,380 — Consumer 141 145 — 21 21 — Lease financing 191 191 — 282 282 — Total impaired loans with no related valuation allowance 22,038 26,301 — 15,765 26,604 — Total impaired loans: Commercial 8,928 12,494 4,448 4,103 9,079 526 Commercial real estate 23,868 30,765 523 13,997 20,867 329 Construction and land development 1,307 1,307 54 843 882 10 Residential real estate 7,270 8,178 554 6,184 7,085 566 Consumer 569 589 45 287 300 29 Lease financing 957 957 361 1,346 1,346 345 Total impaired loans (excluding PCI) $ 42,899 $ 54,290 $ 5,985 $ 26,760 $ 39,559 $ 1,805 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 $11.4 million and $12.8 million at December 31, 2018 and 2017, respectively. The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the years ended December 31, 2018, 2017 and 2016 are included in the table below: 2018 2017 2016 Interest Income Interest Income Interest Income Average Recognized Average Recognized Average Recognized Recorded While on Recorded While on Recorded While on (dollars in thousands) Investment Impaired Status Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ 8,359 $ 30 $ 2,969 $ 15 $ 3,974 $ 15 Commercial real estate 8,082 45 5,408 70 2,379 306 Construction and land development 175 3 83 4 87 7 Residential real estate 3,855 41 3,854 38 3,782 30 Consumer 360 — 299 — 221 — Lease financing 766 — 1,064 — 1,331 — Total impaired loans with a valuation allowance 21,597 119 13,677 127 11,774 358 Impaired loans with no related valuation allowance: Commercial 1,233 — 2,369 — 5,604 1 Commercial real estate 16,253 22 16,822 — 16,847 17 Construction and land development 1,152 — 815 — — — Residential real estate 3,348 22 2,055 3 1,179 2 Consumer 95 — 13 — 26 — Lease financing 191 — 282 — — — Total impaired loans with no related valuation allowance 22,272 44 22,356 3 23,656 20 Total impaired loans: Commercial 9,592 30 5,338 15 9,578 16 Commercial real estate 24,335 67 22,230 70 19,226 323 Construction and land development 1,327 3 898 4 87 7 Residential real estate 7,203 63 5,909 41 4,961 32 Consumer 455 — 312 — 247 — Lease financing 957 — 1,346 — 1,331 — Total impaired loans (excluding PCI) $ 43,869 $ 163 $ 36,033 $ 130 $ 35,430 $ 378 The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2018: Accruing Loans 30-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total (dollars in thousands) Past Due Past Due or More Loans Past Due Current Loans Commercial $ 4,013 $ 2,581 $ 4 $ 8,489 $ 15,087 $ 790,940 $ 806,027 Commercial real estate 1,667 945 149 21,494 24,255 1,595,648 1,619,903 Construction and land development 989 — 85 1,171 2,245 221,653 223,898 Residential real estate 1,292 728 566 5,894 8,480 560,809 569,289 Consumer 5,211 2,533 51 388 8,183 603,225 611,408 Lease financing 4,322 932 206 751 6,211 257,840 264,051 Total loans (excluding PCI) $ 17,494 $ 7,719 $ 1,061 $ 38,187 $ 64,461 $ 4,030,115 $ 4,094,576 The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2017: Accruing Loans 30-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total (dollars in thousands) Past Due Past Due or More Loans Past Due Current Loans Commercial $ 3,282 $ 177 $ 2,538 $ 1,266 $ 7,263 $ 545,994 $ 553,257 Commercial real estate 3,116 630 — 12,482 16,228 1,410,848 1,427,076 Construction and land development 1,953 — — 785 2,738 197,115 199,853 Residential real estate 897 632 51 5,204 6,784 440,818 447,602 Consumer 2,824 1,502 53 234 4,613 366,673 371,286 Lease financing 392 — — 1,346 1,738 203,405 205,143 Total loans (excluding PCI) $ 12,464 $ 2,941 $ 2,642 $ 21,317 $ 39,364 $ 3,164,853 $ 3,204,217 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 $557,000 and $240,000 as of December 31, 2018 and 2017, respectively. The Company had no unfunded commitments in connection with TDRs at December 31, 2018 and 2017. 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, 2018 and 2017: 2018 2017 (dollars in thousands) Accruing (1) Non-accrual (2) Total Accruing (1) Non-accrual (2) Total Commercial $ 435 $ 406 $ 841 $ 299 $ — $ 299 Commercial real estate 2,225 9,103 11,328 1,515 9,915 11,430 Construction and land development 51 — 51 58 — 58 Residential real estate 810 853 1,663 929 282 1,211 Consumer 130 — 130 — — — Lease financing — — — — — — Total loans (excluding PCI) $ 3,651 $ 10,362 $ 14,013 $ 2,801 $ 10,197 $ 12,998 (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, 2018 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2018: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Troubled debt restructurings: Number of loans 2 2 — 7 25 — 36 Pre-modification outstanding balance $ 423 $ 1,571 $ — $ 708 $ 130 $ — $ 2,832 Post-modification outstanding balance 408 1,565 — 696 130 — 2,799 Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2017 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2017: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Troubled debt restructurings: Number of loans 1 1 — 4 — — 6 Pre-modification outstanding balance $ 362 $ 323 $ — $ 528 $ — $ — $ 1,213 Post-modification outstanding balance 299 323 — 508 — — 1,130 Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2016: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total (dollars in thousands) Troubled debt restructurings: Number of loans 3 2 — 3 — — 8 Pre-modification outstanding balance $ 685 $ 10,207 $ — $ 206 $ — $ — $ 11,098 Post-modification outstanding balance 647 10,139 — 206 — — 10,992 Troubled debt restructurings that subsequently defaulted Number of loans — 1 — — — — 1 Recorded balance $ — $ 28 $ — $ — $ — $ — $ 28 Purchased Credit Impaired Loans Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan losses. PCI loans are purchased loans that have evidence of credit deterioration since origination, and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. Evidence of credit quality deterioration as of the purchase date may include factors such as past due and nonaccrual status. The difference between contractually required principal and interest at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in impairment, which is recorded as provision for loan losses in the consolidated statements of income. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges or a reclassification of the difference from non-accretable to accretable with a positive impact on interest income. Further, any excess cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows. Accretion recorded as loan interest income totaled $6.1 million, $5.5 million and $8.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. Accretable yield of PCI loans, or income expected to be collected was as follows for the years ended December 31, 2018, 2017 and 2016: (dollars in thousands) 2018 2017 2016 Balance, beginning of period $ 5,732 $ 9,035 $ 10,526 New loans purchased – Alpine acquisition 6,095 — — New loans purchased – Centrue acquisition — 1,929 — Accretion (6,092) (5,546) (8,579) Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) 2,682 120 915 Reclassification from non-accretable 3,823 194 6,173 Balance, end of period $ 12,240 $ 5,732 $ 9,035 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 |
PREMISES AND EQUIPMENT, NET
PREMISES AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT, NET | Note 6 – Premises and Equipment, Net A summary of premises and equipment as of December 31, 2018 and 2017 is as follows: (dollars in thousands) 2018 2017 Land $ 20,231 $ 16,109 Buildings and improvements 76,141 63,837 Furniture and equipment 29,858 25,843 Total 126,230 105,789 Accumulated depreciation (31,390) (29,627) Premises and equipment, net $ 94,840 $ 76,162 Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $6.2 million, $5.0 million, and $5.1 million, respectively. |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2018 | |
MORTGAGE SERVICING RIGHTS | |
MORTGAGE SERVICING RIGHTS | Note 7 – Mortgage Servicing Rights The Company serviced commercial FHA mortgage loans for others with unpaid principal balances of approximately $3.98 billion at December 31, 2018 and 2017. Changes in our commercial FHA mortgage servicing rights were as follows for the years ended December 31, 2018, 2017 and 2016: (dollars in thousands) 2018 2017 2016 Mortgage servicing rights: Balance, beginning of period $ 55,714 $ 52,006 $ 47,589 Originated servicing 3,174 6,287 6,805 Amortization (2,636) (2,579) (2,388) Balance, end of period 56,252 55,714 52,006 Valuation allowances: Balance, beginning of period 3,254 1,712 — Additions 931 1,542 1,920 Reductions (1,380) — (208) Balance, end of period 2,805 3,254 1,712 Mortgage servicing rights, net $ 53,447 $ 52,460 $ 50,294 Fair value: At beginning of period $ 52,460 $ 50,294 $ 47,589 At end of period $ 53,447 $ 52,460 $ 50,294 The following table is a summary of key assumptions, representing both general economic and other published information and the weighted average characteristics of the commercial portfolio, used in the valuation of servicing rights at December 31, 2018 and 2017. Assumptions used in the prepayment rate consider many factors as appropriate, including lockouts, balloons, prepayment penalties, interest rate ranges, delinquencies and geographic location. The discount rate is based on an average pre‑tax internal rate of return utilized by market participants in pricing the servicing portfolio. Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement. Remaining Servicing Interest Years to Prepayment Servicing Discount Fee Rate Maturity Rate Cost Rate December 31, 2018: Commercial FHA mortgage loans 0.13 % 3.67 % 30.1 8.24 % $ 1,000 10 - 14 % December 31, 2017: Commercial FHA mortgage loans 0.12 % 3.67 % 30.3 8.27 % $ 1,000 10 - 14 % 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. T he fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, costs to service, contractual servicing fee income, ancillary income, late fees , replacement reserves and other economic factors that are determined based on current market conditions. At December 31, 2018 and 2017, the Company serviced residential mortgage loans for others with unpaid principal balances of approximately $897.6 million and $1.99 billion, respectively. During the year ended December 31, 2017, the Company recognized a $4.1 million loss to reflect certain residential mortgage servicing rights classified as held for sale at the lower of their carrying value or fair value less estimated costs to sell. On January 2, 2018, the Company sold its $10.2 million of residential mortgage servicing rights held for sale. Subsequent to this sale, the Company transferred all remaining residential mortgage servicing rights to mortgage servicing rights held for sale. At December 31, 2018, residential mortgage servicing rights of $3.5 million are reflected in the consolidated balance sheet as mortgage servicing rights held for sale. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | Note 8 – Goodwill and Intangible Assets At December 31, 2018 and 2017, goodwill totaled $164.7 million and $98.6 million, respectively, reflecting an increase as a result of the Alpine acquisition on February 28, 2018, 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, 2018 and concluded that no impairment existed as of that date. The following table summarizes the carrying amount of goodwill by segment at December 31, 2018 and 2017. (dollars in thousands) 2018 2017 Banking $ 149,035 $ 82,986 Commercial FHA origination and servicing 10,892 10,892 Wealth management 4,746 4,746 Total goodwill $ 164,673 $ 98,624 The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of December 31, 2018 and 2017 are summarized as follows: 2018 2017 Gross Gross Carrying Accumulated Carrying Accumulated (dollars in thousands) Amount Amortization Total Amount Amortization Total Core deposit intangibles $ 52,712 $ (24,803) $ 27,909 $ 31,612 $ (18,943) $ 12,669 Customer relationship intangibles 13,771 (4,304) 9,467 7,471 (3,208) 4,263 Total intangible assets $ 66,483 $ (29,107) $ 37,376 $ 39,083 $ (22,151) $ 16,932 In conjunction with the acquisition of Alpine on February 28, 2018, we recorded $21.1 million of core deposit intangibles and $6.3 million of customer relationship intangibles, which are both being amortized on an accelerated basis over an estimated useful life of 13 years, as further discussed in Note 2 to the consolidated financial statements. Amortization of intangible assets was $7.0 million, $3.3 million and $2.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. Estimated amortization expense for future years is as follows: (dollars in thousands) Amount Year ending December 31, 2019 $ 6,716 2020 5,792 2021 5,032 2022 4,326 2023 3,620 Thereafter 11,890 Total $ 37,376 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | Note 9 – Derivative Instruments As part of the Company’s overall management of interest rate sensitivity, the Company utilizes derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest rate volatility, including interest rate lock commitments, forward commitments to sell mortgage-backed securities and interest rate swap contracts. Interest Rate Lock Commitments / Forward Commitments to Sell Mortgage-Backed Securities The Company issues interest rate lock commitments on originated fixed-rate commercial and residential real estate loans to be sold. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets in the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. The following tables summarize the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount and estimated fair values at December 31, 2018 and 2017: Notional Amount Fair Value Gain (dollars in thousands) 2018 2017 2018 2017 Derivative Instruments (included in Other Assets): Interest rate lock commitments $ 264,710 $ 345,152 $ 4,492 $ 6,331 Forward commitments to sell mortgage-backed securities 276,871 372,824 — 31 Total $ 541,581 $ 717,976 $ 4,492 $ 6,362 Notional Amount Fair Value Loss (dollars in thousands) 2018 2017 2018 2017 Derivative Instruments (included in Other Liabilities): Forward commitments to sell mortgage-backed securities $ 54 $ — $ — $ — Net losses recognized on derivative instruments were $2.0 million and $16,000 for the years ended December 31, 2018 and December 31, 2017, respectively. Net gains recognized on derivative instruments were $351,000 for the year ended December 31, 2016. Net gains or losses on derivative instruments were recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. Interest Rate Swap Contracts The Company entered into interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity. These swaps are offset by contracts simultaneously purchased by the Company from other financial dealer institutions with mirror-image terms. Because of the mirror-image terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in the fair value subsequent to initial recognition have a minimal effect on earnings. These derivative contracts do not qualify for hedge accounting. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $9.5 million and $10.0 million at December 31, 2018 and 2017, respectively. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $145,000 and $17,000 at December 31, 2018 and 2017, respectively, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
DEPOSITS | |
DEPOSITS | Note 10 – Deposits The following table summarizes the classification of deposits as of December 31, 2018 and 2017: (dollars in thousands) 2018 2017 Noninterest-bearing demand $ 972,164 $ 724,443 Interest-bearing: Checking 1,002,275 785,934 Money market 862,171 646,426 Savings 442,132 281,212 Time 795,428 693,074 Total deposits $ 4,074,170 $ 3,131,089 Included in time deposits are time certificates of $250,000 or more and brokered certificates of deposits of $76.0 million and $161.6 million as of December 31, 2018, respectively, and $69.9 million and $190.3 million as of December 31, 2017, respectively. Investment securities with a carrying amount of $182.4 million and $116.0 million were pledged for public deposits at December 31, 2018 and 2017, respectively. Standby letters of credit issued by the FHLB on our behalf of $120.0 million were pledged for public deposits at December 31, 2018 and 2017. As of December 31, 2018, the scheduled maturities of time deposits are as follows: (dollars in thousands) Amount Year ending December 31, 2019 $ 523,651 2020 135,754 2021 97,871 2022 22,183 2023 15,968 Thereafter 1 Total $ 795,428 |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
SHORT-TERM BORROWINGS | |
SHORT-TERM BORROWINGS | Note 11 – Short-Term Borrowings The following table presents the distribution of short-term borrowings and related weighted average interest rates for each of the years ended December 31, 2018 and 2017: Repurchase Agreements (dollars in thousands) 2018 2017 Outstanding at period-end $ 124,235 $ 156,126 Average amount outstanding 138,135 163,461 Maximum amount outstanding at any month end 173,387 196,278 Weighted average interest rate: During period 0.51 % 0.23 % End of period 0.71 % 0.28 % 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 $132.2 million and $157.2 million at December 31, 2018 and 2017, respectively, were pledged for securities sold under agreements to repurchase. The Company had lines of credit of $56.8 million and $32.5 million at December 31, 2018 and 2017, 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 $67.6 million and $36.5 million at December 31, 2018 and 2017, respectively. There were no outstanding borrowings at December 31, 2018 and 2017. At December 31, 2018, the Company had federal funds lines of credit totaling $45.0 million. These lines of credit were unused at December 31, 2018. |
FHLB ADVANCES AND OTHER BORROWI
FHLB ADVANCES AND OTHER BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
FHLB ADVANCES AND OTHER BORROWINGS | |
FHLB ADVANCES AND OTHER BORROWINGS | Note 12 – FHLB Advances and Other Borrowings The following table summarizes our FHLB advances and other borrowings as of December 31, 2018 and 2017: (dollars in thousands) 2018 2017 Midland States Bancorp, Inc. Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 4.63% and 3.63% at December 31, 2018 and 2017, respectively – maturing May 25, 2020 $ 32,840 $ 37,113 Series G redeemable preferred stock - 181 shares at $1,000 per share 181 181 Midland States Bank FHLB advances – fixed rate, fixed term of $87.7 million and $145.0 million, at rates averaging 2.35% and 1.35% at December 31, 2018 and 2017, respectively – maturing through February 2023, and putable fixed rate of $520.0 million and $305.0 million at rates averaging 2.09% and 1.29% at December 31, 2018 and 2017, respectively, – maturing through August 2025 with call provisions through August 2021 607,610 450,137 FHLB advances – variable rate, fixed term, at rates averaging 1.20% at December 31, 2017 – maturing through March 2018 — 9,000 Other — 5 Total FHLB advances and other borrowings $ 640,631 $ 496,436 In May 2017, the Company entered into a loan agreement with another bank for a revolving line of credit in the original principal amount of up to $10.0 million and a term loan in the original principal amount of $40.0 million. The term loan matures on May 25, 2020 and pays a variable rate of interest equal to one-month LIBOR plus 225 basis points. Beginning September 1, 2017, the Company was required to begin making quarterly principal and interest payments on the term loan of $1.4 million with the remaining principal and any unpaid interest due at maturity. The loan is unsecured with a negative pledge of shares of the Company’s common stock. The loan agreement contains financial covenants that require the Company to maintain a minimum total capital to risk-weighted assets ratio, a minimum adjusted loan loss reserves to nonperforming loans ratio, a minimum fixed charge coverage ratio and a maximum percentage of nonperforming assets to tangible capital. At December 31, 2018, the Company was in compliance with or has obtained waivers for each of these financial covenants. In conjunction with the acquisition of Centrue on June 9, 2017, as further discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series B preferred stock was converted into the right to receive a share of a newly created series of Series G preferred stock of the Company, and was recorded at fair value of $181,000 at the time of acquisition. The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $2.22 billion and $1.86 billion at December 31, 2018 and 2017, respectively. Contractual payments over the next five years for FHLB advances and other borrowings are as follows: (dollars in thousands) Amount 2019 $ 73,074 2020 30,953 2021 5,814 2022 153,210 2023 267,580 Thereafter 110,000 Total $ 640,631 |
SUBORDINATED DEBT
SUBORDINATED DEBT | 12 Months Ended |
Dec. 31, 2018 | |
SUBORDINATED DEBT | |
SUBORDINATED DEBT | Note 13 – Subordinated Debt The following table summarizes the Company’s subordinated debt as of December 31, 2018 and 2017: (dollars in thousands) 2018 2017 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 $ 39,871 $ 39,800 Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025 14,831 14,805 Subordinated debt issued October 2017 - fixed interest rate of 6.25% for the first five years through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 maturing October 15, 2027 39,432 39,367 Total subordinated debt $ 94,134 $ 93,972 In June 2015, the Company issued $55.3 million of subordinated debt in a private placement. The transaction was structured in two tranches: (1) $40.3 million, maturing on June 18, 2025 with a redemption option on or after June 18, 2020, with a fixed rate of interest of 6.00% for the first five years, payable semiannually in arrears beginning December 18, 2015, and a floating rate of interest equivalent to the three-month LIBOR plus 435 basis points thereafter, payable quarterly beginning on September 18, 2020; and (2) $15.0 million, maturing on June 18, 2025, with a fixed rate of interest of 6.50%, payable semiannually in arrears beginning December 18, 2015. The value of the subordinated debentures was reduced by $0.9 million with the recording of debt issuance costs associated with the issuance of the subordinated debentures, which are being amortized on a straight line basis through maturity of the subordinated notes. The subordinated debentures may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. On October 13, 2017, the Company issued, through a private placement, $40.0 million aggregate principal amount of subordinated debentures with a maturity date of October 15, 2027. The subordinated debentures bear a fixed rate of interest of 6.25% for the first five years, payable semiannually in arrears beginning April 15, 2018, and a floating rate of interest equal to the three-month LIBOR plus 422.9 basis points thereafter, payable quarterly in arrears beginning January 15, 2023. The subordinated debentures will be redeemable by the Company, in whole or in part, on or after October 15, 2022, and are not subject to redemption at the option of the holders. The value of the subordinated debentures was reduced by approximately $0.6 million related to debt issuance costs, which are being amortized on a straight line basis through the maturity of the subordinated debentures. The subordinated debenture issues may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. |
TRUST PREFERRED DEBENTURES
TRUST PREFERRED DEBENTURES | 12 Months Ended |
Dec. 31, 2018 | |
TRUST PREFERRED DEBENTURES | |
TRUST PREFERRED DEBENTURES | Note 14 – Trust Preferred Debentures The following table summarizes the Company’s trust preferred debentures as of December 31, 2018 and 2017: (dollars in thousands) 2018 2017 Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 5.23% and 4.11% at December 31, 2018 and 2017, respectively – $10,310 maturing April 23, 2034 $ 10,272 $ 10,269 Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 5.37% and 4.23%, at December 31, 2018 and 2017, respectively – $3,093 maturing January 23, 2034 2,209 2,151 Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 4.54% and 3.34% at December 31, 2018 and 2017, respectively – $20,619 maturing December 31, 2036 14,074 13,911 Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 4.21% and 2.98% at December 31, 2018 and 2017, respectively – $20,619 maturing September 6, 2037 13,249 13,084 Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 5.44% and 4.25% at December 31, 2018 and 2017, respectively - $10,310 maturing June 17, 2034 7,990 7,915 Total trust preferred debentures $ 47,794 $ 47,330 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 Love Savings Holding Company (“LSHC”) on December 31, 2014, the Company assumed $40.0 million of subordinated debentures that were recorded at a fair value of $26.1 million at the time of acquisition. On November 30, 2006, the Love Savings/Heartland Capital Trust III (“LSHC Trust III”) issued 20,000 shares of capital securities with a liquidation amount of $1,000 per security. LSHC issued $20.0 million of subordinated debentures to LSHC Trust III in exchange for ownership of all the common securities of the trust. On June 6, 2007, the Love Savings/Heartland Capital Trust IV (“LSHC Trust IV”) issued 20,000 shares of capital securities with a liquidation amount of $1,000 per security. LSHC issued $20.0 million of subordinated debentures to LSHC Trust IV in exchange for ownership of all the common securities of the trust. The Company is not considered the primary beneficiary of LSHC Trust III or LSHC Trust IV; therefore, the trusts are not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. The Company’s investment in the common stock of the trusts was $1.2 million and is included in other assets. In conjunction with the acquisition of Centrue on June 9, 2017, as further discussed in Note 2 to the consolidated financial statements, the Company assumed $10.0 million of subordinated debentures that were recorded at a fair value of $7.6 million at the time of acquisition. In April 2004, the Centrue Statutory Trust II (“Centrue Trust II”) issued 10,000 shares of preferred securities with a liquidation amount of $1,000 per preferred security. Centrue issued $10.0 million of subordinated debentures to Centrue Trust II in exchange for ownership of all the common securities of the trust. The Company is not considered the primary beneficiary of Centrue Trust II; therefore, the trust is not consolidated in the Company’s consolidated financial statements, but rather the subordinated debentures are shown as a liability, and the Company’s investment in the common stock of Centrue Trust II of $310,000 is included in other assets. 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
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAXES | |
INCOME TAXES | Note 15 – Income Taxes The components of income taxes for the years ended December 31, 2018, 2017 and 2016 were as follows: (dollars in thousands) 2018 2017 2016 Federal: Current $ 55 $ (696) $ 1,718 Deferred 6,748 11,632 11,381 State: Current 807 (921) 2,630 Deferred 3,774 400 3,160 Total income tax expense $ 11,384 $ 10,415 $ 18,889 The Company’s income tax expense differed from the statutory federal rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 as follows: (dollars in thousands) 2018 2017 2016 Expected income taxes $ 10,665 $ 9,244 $ 17,648 Less income tax effect of: Tax exempt interest, net (1,441) (1,635) (1,637) State tax, net of federal benefit 4,028 (110) 3,132 Increase in cash surrender value of life insurance policies (854) (969) (1,007) Equity-based compensation benefit (62) (1,297) (366) Non-deductible transaction costs 71 389 — Valuation allowance (409) (229) 631 Effect of federal rate change enacted in 2017 — 4,540 — Other (614) 482 488 Actual income tax expense $ 11,384 $ 10,415 $ 18,889 Deferred tax assets, net in the accompanying consolidated balance sheets as of December 31, 2018 and 2017 include the following amounts of deferred tax assets and liabilities: (dollars in thousands) 2018 2017 Assets: Allowance for loan losses $ 5,748 $ 4,405 Deferred compensation 2,158 1,896 Loans 6,579 3,896 Write-down of other real estate owned 563 776 Tax credits 1,041 1,501 Nonaccrual interest 730 708 Unrealized loss on securities 802 — Stock compensation 700 907 Deferred loan fees, net of costs — 133 Net operating losses 17,417 20,097 Accrued litigation 179 101 Allowance for repurchase reserves 135 100 Allowance for unfunded commitments 319 180 Fair value adjustment on investments 1,330 — Charitable contributions 202 58 Other, net 720 324 Deferred tax assets 38,623 35,082 Valuation allowance — (409) Deferred tax assets, net of valuation allowance 38,623 34,673 Liabilities: Premises and equipment 3,522 1,657 Unrealized gain on securities — 412 Mortgage servicing rights 11,460 11,424 Fair value adjustment on trust preferred debentures 4,694 4,700 Federal Home Loan Bank stock dividends 391 310 Deferred loan costs, net of fees 1,495 — Intangible assets 8,741 2,729 Accounting method changes 74 399 Prepaid expenses 708 796 Software development costs 1,667 — Leased equipment 4,351 — Other, net 269 222 Deferred tax liabilities 37,372 22,649 Deferred tax assets, net $ 1,251 $ 12,024 At December 31, 2018 and 2017, 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 $62.6 million of federal net operating loss carryforwards expiring 2021 through 2034, $53.4 million of Illinois post-apportioned net operating loss carryforwards expiring 2022 through 2026, and $62.6 million of Missouri pre-apportioned net operating loss carryforwards expiring 2021 through 2034, at December 31, 2018. The utilization of the federal and Missouri net operating losses are subject to the limitations of IRC Section 382. The Company has a federal alternative minimum tax credit carryforward of $3.6 million that can be carried forward indefinitely and became a refundable credit with the enactment of the Tax Act on December 22, 2017. As of December 31, 2018 and 2017 this credit is not reflected in deferred tax assets and is presented in income taxes receivable. The Company has state tax credit carryforwards of $1.0 million with a five year carryforward period, and expiring between 2019 and 2023. Any amounts that are expected to expire before being fully utilized have been accounted for through a valuation allowance as discussed below. As a result of the enactment of the Tax Act on December 22, 2017, the Company was required to write down deferred tax assets by $4.5 million. Following the guidance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), the write down of the deferred tax assets was determined using reasonable estimates for certain effects of tax reform, and the Company recorded the amount of the write down as a provisional amount at December 31, 2017. The final analysis of the impact of the Tax Act was completed once the Company finalized its 2017 tax returns in the third quarter of 2018. The results of this analysis yielded an immaterial true-up to the $4.5 million provisional estimate previously recorded in 2017. We had no unrecognized tax benefits as of December 31, 2018 and 2017, and did not recognize any increase of unrecognized benefits during 2018 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, 2018 and 2017. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. All available evidence, both positive and negative, should be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. At December 31, 2017, the Company concluded, based on all available evidence, a valuation allowance was needed for the Company’s deferred tax asset related to state tax credit carryforwards. A valuation allowance in the amount of $409,000 was established for the state tax credit carryforwards at December 31, 2017. During 2018 the valuation allowance for the state tax credit carryforwards was released due to a one-time restructuring event that created taxable income that was offset by the utilization of the state tax credits prior to their expiration. 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 2015 through 2017 and for state taxing authorities are 2014 through 2017. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
RETIREMENT PLANS | |
RETIREMENT PLANS | Note 16 – Retirement Plans We sponsor the Midland States Bank 401(k) Profit Sharing Plan which provides retirement benefits to substantially all of our employees. There were no employer discretionary profit sharing contributions made to the 401(k) plan in 2018, 2017 and 2016. 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 $1.8 million, $1.2 million and $1.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Certain directors and executive officers participate in a deferred compensation arrangement. We match 25% of the amount deferred by directors who defer all of their director fees into a Company stock unit account. At December 31, 2018 and 2017, the accrued liability for these arrangements totaled $4.2 million and $3.8 million, respectively, and was reflected in other liabilities in the consolidated balance sheets. Expenses associated with these arrangements were $754,000, $659,000 and $605,000 for the years ended December 31, 2018, 2017 and 2016, respectively. During the years ended December 31, 2018, 2017 and 2016, there were distributions made of $356,000, $100,000 and $126,000, respectively. In November 2015, the Company entered into a supplemental retirement agreement with its former Chief Executive Officer (“CEO”). The former 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). The Company expensed $282,000, $210,000 and $219,000 for the years ended December 31, 2018, 2017 and 2016, respectively, for this arrangement. Midland participates in the Pentegra Defined Benefit Plan for Financial Institutions, a noncontributory defined benefit pension plan for certain former employees of Heartland Bank 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 121.96% as of July 1, 2018, 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 2018 and 2017 was $122,000 and $121,000, respectively. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
STOCK BASED COMPENSATION | |
STOCK BASED COMPENSATION | Note 17 – Stock Based Compensation On October 18, 2010, the board of directors approved the Midland States Bancorp, Inc. 2010 Long‑Term Incentive Plan (“2010 Incentive Plan”). The 2010 Incentive Plan was amended and restated effective February 2, 2016, which made available 2,000,000 shares (the initial 1,000,000 of which may be granted as incentive stock options) to be issued to selected employees and directors of, and service providers to, the Company or its subsidiaries. The granting of awards under this plan can be in the form of incentive stock options, non‑qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other awards. The awards are granted by the compensation committee, which is comprised of members of the board of directors. Stock Option awards were granted during the years ended December 31, 2017 and 2016. The fair value of each grant is estimated at the grant date using the Black‑Scholes option‑pricing model with the following weighted average assumptions: 2017 2016 Dividend yield 2.50 % 3.00 % Expected volatility 16.63 16.98 Risk free interest rate 2.12 1.64 Expected life 6.25 years 6.25 years The summary of our stock option activity during the years ended December 31, 2018 and 2017 is as follows: 2018 2017 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 1,148,537 $ 19.39 1,319,259 $ 18.73 Options granted — — 31,259 32.89 Options exercised (108,344) 16.42 (179,760) 16.02 Options forfeited (34,049) 26.27 (22,221) 26.08 Options outstanding, end of year 1,006,144 $ 19.48 4.9 years 1,148,537 $ 19.39 5.8 years Options exercisable 885,817 $ 18.53 4.6 years 673,706 $ 17.55 4.6 years Options vested and expected to vest 991,774 $ 19.38 4.9 years 1,088,853 $ 19.27 5.7 years The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2018 was $3.8 million and $3.8 million, respectively. As of December 31, 2018, there was $311,000 of total unrecognized compensation cost related to nonvested share‑based compensation arrangements granted under our stock option plans. This cost is expected to be recognized over a period of 1.7 years. The weighted average fair value of options granted during the years ended December 31, 2017 and 2016 was $4.33 and $2.94, respectively. The total intrinsic value and cash received from options exercised under all share‑based payment arrangements was $1.6 million and $1.8 million, respectively, for the year ended December 31, 2018, $2.3 million and $2.9 million, respectively, for the year ended December 31, 2017, and $971,000 and $890,000, respectively, for the year ended December 31, 2016. The following table summarizes information about the Company’s nonvested stock option activity for 2018: Weighted average grant date Stock Options Shares fair value Nonvested at December 31, 2017 474,831 $ 2.83 Granted — — Vested (324,508) 2.72 Forfeited (29,996) 2.91 Nonvested at December 31, 2018 120,327 $ 3.11 In 2018 and 2017, the Company granted 138,683 and 70,951 shares of restricted stock awards, respectively. These awards have a vesting period of four years. Compensation expense is recognized over the vesting period of the award based on the fair value of the stock at the date of issue. Also, in 2017, the Company granted 12,965 restricted stock unit awards that may be settled in cash or stock, at the election of the recipient. These awards had a vesting period of one year. They were classified as liability awards and measured at each financial reporting date until settled. 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, 2017 149,368 $ 28.83 Granted during the year 138,683 28.47 Vested during the year (56,907) 27.95 Forfeited during the year (33,427) 30.17 Nonvested at December 31, 2018 197,717 $ 28.61 As of December 31, 2018, there was $5.3 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 3.3 years. The weighted average grant date fair value for restricted stock awards was $28.47, $31.03 and $27.38 during the years ended December 31, 2018, 2017 and 2016, respectively. Compensation cost that has been charged against income for these plans was $1.8 million, $1.8 million and $1.1 million for 2018, 2017 and 2016, respectively. |
PREFERRED STOCK
PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2018 | |
PREFERRED STOCK | |
PREFERRED STOCK | Note 18 – Preferred Stock Series G Preferred Stock In conjunction with the acquisition of Centrue on June 9, 2017, as discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series B preferred stock was converted into the right to receive a share of a newly created series of Series G preferred stock of the Company, which are shown in FHLB advances and other borrowings in Note 12 to the consolidated financial statements. Preferential cumulative cash dividends are payable quarterly at an annual rate of $60.00 per share. Dividends accrue on each share of Series G preferred stock from the date of issuance and from day to day, thereafter, whether or not earned or declared. Fixed Rate Non-Voting Perpetual Non-Cumulative Preferred Stock, Series H In conjunction with the acquisition of Centrue on June 9, 2017, as discussed in Note 2 to the consolidated financial statements, each share of Centrue’s Series D preferred stock was converted into the right to receive a share of a newly created series of Series H preferred stock of the Company, and was recorded at fair value of $3.1 million at the time of acquisition. Dividends are payable at a fixed rate of 12.5% per annum, payable quarterly and are non-cumulative. No dividends may be paid on shares of common stock, shares of preferred stock that rank junior to Series H preferred stock (other than dividends payable solely in shares of common stock), or shares of preferred stock that rank on parity with Series H preferred stock, if a dividend is not paid in full on the Series H preferred stock, for a period of three calendar quarters from the date of the missing dividend payment date. The Company has the option to redeem, in whole or in part, the shares of Series H preferred stock at any time after July 29, 2019. The per share price payable by the Company for such shares of Series H preferred stock will be equal to $1,000 per share, plus any accrued but unpaid dividends. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | Note 19 – Earnings Per Share Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. The diluted earnings per share computation for the years ended December 31, 2018, 2017 and 2016 excluded antidilutive stock options of 31,259, 662 and 114,648, respectively, because the exercise prices of these stock options exceeded the average market prices of the Company’s common shares for those respective years. Presented below are the calculations for basic and diluted earnings per common share for the years ended December 31, 2018, 2017 and 2016: (dollars in thousands, except per share data) 2018 2017 2016 Net income $ 39,421 $ 16,056 $ 31,542 Preferred stock dividends (330) (184) — Preferred stock, premium amortization 189 101 — Net income available to common shareholders equity 39,280 15,973 31,542 Common shareholder dividends (19,838) (13,922) (9,797) Unvested restricted stock award dividends (139) (86) (56) Undistributed earnings to unvested restricted stock awards (123) (11) (110) Undistributed earnings to common shareholders $ 19,180 $ 1,954 $ 21,579 Basic Distributed earnings to common shareholders $ 19,838 $ 13,922 $ 9,797 Undistributed earnings to common shareholders 19,180 1,954 21,579 Total common shareholders earnings, basic $ 39,018 $ 15,876 $ 31,376 Diluted Distributed earnings to common shareholders $ 19,838 $ 13,922 $ 9,797 Undistributed earnings to common shareholders 19,180 1,954 21,579 Total common shareholders earnings 39,018 15,876 31,376 Add back: Undistributed earnings reallocated from unvested restricted stock awards 2 — 2 Total common shareholders earnings, diluted $ 39,020 $ 15,876 $ 31,378 Weighted average common shares outstanding, basic 23,130,475 17,781,631 14,130,552 Options and warrants 418,550 501,583 298,287 Weighted average common shares outstanding, diluted 23,549,025 18,283,214 14,428,839 Basic earnings per common share $ 1.69 $ 0.89 $ 2.22 Diluted earnings per common share 1.66 0.87 2.17 |
CAPITAL REQUIREMENTS
CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
CAPITAL REQUIREMENTS | |
CAPITAL REQUIREMENTS | Note 20 – Capital Requirements The Company’s primary source of cash is dividends received from the Bank. The Bank is restricted by Illinois law and regulations of the Illinois Department of Financial and Professional Regulation and the FDIC as to the maximum amount of dividends the Bank can pay to us. As a practical matter, the Bank restricts dividends to a lesser amount because of the need to maintain an adequate capital structure. We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. The regulators require the Company to meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance‑sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Total capital, Tier 1 capital and Common equity tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations). Beginning on January 1, 2016, a capital conservation buffer became effective for banking organizations, which is designed to establish a capital range above minimum requirements to insulate banks from periods of stress and impose constraints on dividends, share repurchases and discretionary bonus payments when capital levels fall below prescribed levels. The minimum capital conservation buffer in 2017 was 1.25%, 1.875% in 2018, and was fully phased in at 2.5% on January 1, 2019. As of December 31 , 2018 , the Company and the Bank met all capital adequacy requirements to which they were subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized. At December 31 , 2018 and 2017, the Company’s and the Bank’s actual and required capital ratios were as follows: 2018 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ 584,409 12.79 % $ 365,547 8.00 % N/A N/A Midland States Bank 583,465 12.76 365,894 8.00 $ 457,368 10.00 % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 468,212 10.25 274,160 6.00 N/A N/A Midland States Bank 561,402 12.27 274,421 6.00 365,894 8.00 Common equity tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 400,480 8.76 205,620 4.50 N/A N/A Midland States Bank 561,402 12.27 205,815 4.50 297,289 6.50 Tier 1 leverage (to average assets): Midland States Bancorp, Inc. 468,212 8.53 219,602 4.00 N/A N/A Midland States Bank 561,402 10.22 219,622 4.00 274,528 5.00 2017 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ 478,914 13.26 % $ 288,895 8.00 % N/A N/A Midland States Bank 445,285 12.32 289,252 8.00 $ 361,565 10.00 % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 367,841 10.19 216,671 6.00 N/A N/A Midland States Bank 428,184 11.84 216,939 6.00 289,252 8.00 Common equity tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 304,974 8.45 162,503 4.50 N/A N/A Midland States Bank 428,184 11.84 162,704 4.50 235,017 6.50 Tier 1 leverage (to average assets): Midland States Bancorp, Inc. 367,841 8.63 170,566 4.00 N/A N/A Midland States Bank 428,184 10.04 170,608 4.00 213,260 5.00 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Note 21 – Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: · Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets. · Level 2: Significant other observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. · Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment securities available for sale. The fair values for investment securities available for sale are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2018 or 2017 for assets measured at fair value on a recurring basis. Loans held for sale. The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Mortgage servicing rights held for sale. The fair value of mortgage servicing rights held for sale is determined by quoted market prices less costs to sell (Level 1). 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. 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. 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, 2018 and 2017, are summarized below: 2018 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. Treasury securities $ 24,650 $ 24,650 $ — $ — Government sponsored entity debt securities 75,684 — 75,684 — Agency mortgage-backed securities 326,305 — 326,305 — State and municipal securities 159,262 — 159,262 — Corporate securities 71,550 — 69,627 1,923 Equity securities 3,334 — 3,334 — Loans held for sale 30,401 — 30,401 — Interest rate lock commitments 4,492 — 4,492 — Interest rate swap contracts 145 — 145 — Total $ 695,823 $ 24,650 $ 669,250 $ 1,923 Liabilities Interest rate swap contracts $ 145 $ — $ 145 $ — Assets measured at fair value on a non-recurring basis: Mortgage servicing rights $ 53,447 $ — $ — $ 53,447 Mortgage servicing rights held for sale 3,545 3,545 — — Impaired loans 11,238 — 9,226 2,012 Other real estate owned 1,439 — 1,439 — Assets held for sale 1,687 — 1,687 — 2017 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. Treasury securities $ 27,718 $ 27,718 $ — $ — Government sponsored entity debt securities 25,211 — 25,211 — Agency mortgage-backed securities 232,387 — 232,387 — State and municipal securities 102,567 — 102,567 — Corporate securities 59,812 — 55,033 4,779 Equity Securities 2,830 — 2,830 — Loans held for sale 50,089 — 50,089 — Interest rate lock commitments 6,331 — 6,331 — Forward commitments to sell mortgage-backed securities 31 — 31 — Interest rate swap contracts 17 — 17 — Total $ 506,993 $ 27,718 $ 474,496 $ 4,779 Liabilities Interest rate swap contracts 17 — $ 17 $ — Assets measured at fair value on a non-recurring basis: Mortgage servicing rights $ 56,352 $ — $ — $ 56,352 Mortgage servicing rights held for sale 10,176 10,176 — — Impaired loans 9,385 — 7,631 1,754 Other real estate owned 801 — 801 — Assets held for sale 3,358 — 3,358 — The following table presents losses recognized on assets measured on a non‑recurring basis for the years ended December 31, 2018, 2017 and 2016: (dollars in thousands) 2018 2017 2016 Mortgage servicing rights $ — $ 2,324 $ 3,135 Mortgage servicing rights held for sale 458 4,059 — Impaired loans 5,800 7,096 2,459 Other real estate owned 301 253 247 Assets held for sale — 1,516 1,646 Total loss on assets measured on a nonrecurring basis $ 6,559 $ 15,248 $ 7,487 The following table presents activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017: 2018 2017 Non-Agency Corporate Corporate Mortgage-Backed (dollars in thousands) Securities Securities Securities Balance, beginning of period $ 4,779 $ 7,480 $ 1 Total realized in earnings (1) 242 289 — Total unrealized in other comprehensive income (36) 264 — Net settlements (principal and interest) (3,062) (3,254) (1) Balance, end of period $ 1,923 $ 4,779 $ — (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at December 31, 2018: Non-recurring Fair Value Valuation Unobservable fair value measurements (dollars in thousands) technique input / assumptions Range (weighted average) Mortgage servicing rights $ 53,447 Discounted cash flow Prepayment speed 8.00% - 18.00% (8.24%) Discount rate 10.00% - 27.00% (11.12%) Impaired loans $ 2,012 Fair value of collateral Discount for type of property, 5.00% - 7.26% (5.26%) age of appraisal and current status The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at December 31, 2017: Non-recurring Fair Value Valuation Unobservable fair value measurements (dollars in thousands) technique input / assumptions Range (weighted average) Mortgage servicing rights $ 56,352 Discounted cash flow Prepayment speed 6.36% - 42.90% (8.83%) Discount rate 8.00% - 14.50% (11.18%) Impaired loans $ 1,754 Fair value of collateral Discount for type of property, 4.84% - 18.24% (8.64%) age of appraisal and current status Mortgage Servicing Rights. In accordance with GAAP , the Company must record impairment charges on mortgage servicing rights on a non-recurring basis when the carrying value exceeds the estimated fair value. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are estimated based on current market conditions . The determination of fair value of servicing rights relies upon Level 3 inputs. The fair value of mortgage servicing rights at December 31, 2018 and 2017 were $53.4 million and $56.4 million, respectively. Impaired loans. Impaired loans are measured and recorded at fair value on a non-recurring basis. All of our nonaccrual loans and restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure impaired loans based on the estimated fair value of such collateral. The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment. ASC Topic 825, Financial Instruments , requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements. The Company has elected the fair value option for newly originated residential and commercial loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification. The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of December 31, 2018 and 2017: 2018 2017 Aggregate Contractual Aggregate Contractual (dollars in thousands) fair value Difference principal fair value Difference principal Residential loans held for sale $ 8,121 $ 484 $ 7,637 $ 12,241 $ 374 $ 11,867 Commercial loans held for sale 22,280 595 21,685 37,846 343 37,503 Total loans held for sale $ 30,401 $ 1,079 $ 29,322 $ 50,087 $ 717 $ 49,370 The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2018 and 2017: (dollars in thousands) 2018 2017 Residential loans held for sale $ 6 $ (74) Commercial loans held for sale 252 (650) Total loans held for sale $ 258 $ (724) The following tables are a summary of the carrying values and fair value estimates of certain financial instruments as of December 31, 2018 and 2017: 2018 Quoted prices in active Significant markets other Significant for identical observable unobservable Carrying assets inputs inputs (dollars in thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ 210,780 $ 210,780 $ 210,780 $ — $ — Federal funds sold 2,920 2,920 2,920 — — Investment securities available for sale 660,785 660,785 24,650 634,212 1,923 Nonmarketable equity securities 42,472 42,472 — 42,472 — Loans, net 4,116,648 4,091,438 — — 4,091,438 Loans held for sale 30,401 30,401 — 30,401 — Accrued interest receivable 16,560 16,560 — 16,560 — Interest rate lock commitments 4,492 4,492 — 4,492 — Interest rate swap contracts 145 145 — 145 — Liabilities Deposits $ 4,074,170 $ 4,069,098 $ — $ 4,069,098 $ — Short-term borrowings 124,235 124,235 — 124,235 — FHLB and other borrowings 640,631 641,050 — 641,050 — Subordinated debt 94,134 91,926 — 91,926 — Trust preferred debentures 47,794 56,805 — 56,805 — Accrued interest payable 4,855 4,855 — 4,855 — Interest rate swap contracts 145 145 — 145 — 2017 Quoted prices in active Significant markets other Significant for identical observable unobservable Carrying assets inputs inputs (dollars in thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ 214,519 $ 214,519 $ 214,519 $ — $ — Federal funds sold 683 683 683 — — Investment securities available for sale 450,525 450,525 27,718 418,028 4,779 Nonmarketable equity securities 34,796 34,796 — 34,796 — Loans, net 3,210,247 3,200,016 — — 3,200,016 Loans held for sale 50,089 50,089 — 50,089 — Accrued interest receivable 11,715 11,715 — 11,715 — Interest rate lock commitments 6,331 6,331 — 6,331 — Forward commitments to sell mortgage-backed securities 31 31 — 31 — Interest rate swap contracts 17 17 — 17 — Liabilities Deposits $ 3,131,089 $ 3,127,626 $ — $ 3,127,626 $ — Short-term borrowings 156,126 156,126 — 156,126 — FHLB and other borrowings 496,436 494,634 — 494,634 — Subordinated debt 93,972 90,860 — 90,860 — Trust preferred debentures 45,379 46,069 — 46,069 — Accrued interest payable 2,531 2,531 — 2,531 — Interest rate swap contracts 17 17 — 17 — The methods utilized to estimate fair value of financial instruments at December 31, 2017 did not necessarily represent an exit price. In accordance with our adoption of ASU 2016-01 in 2018, the methods utilized to measure the fair value of financial instruments at December 31, 2018 represent an approximation of exit price, however, an actual exit price may differ. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | Note 22 – Commitments, Contingencies and Credit Risk In the normal course of business, there are outstanding various contingent liabilities such as claims and legal actions, which are not reflected in the consolidated financial statements. No material losses are anticipated as a result of these actions or claims. We are obligated under noncancelable operating leases for office space and other commitments. Certain leases contain escalation clauses providing for increased rental payments based primarily on increases in real estate taxes or in the average consumer price index. Net rent expense under operating leases included in occupancy and equipment expense was approximately $3.2 million, $2.7 million and $2.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. The projected minimum rental payments under the terms of the leases as of December 31, 2018 are as follows: (dollars in thousands) Amount Year ending December 31: 2019 $ 2,878 2020 2,361 2021 2,193 2022 1,955 2023 1,397 Thereafter 2,249 Total estimated lease payments $ 13,033 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, 2018 and 2017 are as follows: (dollars in thousands) 2018 2017 Commitments to extend credit $ 663,555 $ 568,356 Financial guarantees – standby letters of credit 142,859 142,189 The Company establishes a mortgage repurchase liability to reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on the volume of loans sold in 2018 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. As a result of make-whole requests and loan repurchases, the Company incurred losses totaling $11,000, $17,000 and $83,000 for the years ended December 31, 2018, 2017 and 2016, respectively. The liability for unresolved repurchase demands totaled $492,000 and $371,000 at December 31, 2018 and 2017, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | Note 23 – Segment Information Our business segments are defined as Banking, Commercial FHA Origination and Servicing, Wealth Management 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 wealth management segment consists of trust and fiduciary services, brokerage and retirement planning services. The other segment includes the operating results of the parent company, our captive insurance business unit, and the elimination of intercompany transactions. During 2018, the Company re-evaluated its business segments and changed the composition of its reportable segments to those described above and restated all prior period information. Selected business segment financial information as of and for the years ended December 31, 2018, 2017 and 2016 were as follows: Commercial FHA Origination and Wealth (dollars in thousands) Banking Servicing Management Other Total December 31, 2018 Net interest income (expense) $ 190,883 $ (422) $ 298 $ (10,672) $ 180,087 Provision for loan losses 9,430 — — — 9,430 Noninterest income 40,313 11,457 20,484 (463) 71,791 Noninterest expense 165,744 15,058 11,680 (839) 191,643 Income (loss) before income taxes (benefit) 56,022 (4,023) 9,102 (10,296) 50,805 Income taxes (benefit) 14,154 (979) 514 (2,305) 11,384 Net income (loss) $ 41,868 $ (3,044) $ 8,588 $ (7,991) $ 39,421 Total assets $ 5,571,752 $ 91,108 $ 18,218 $ (43,405) $ 5,637,673 December 31, 2017 Net interest income (expense) $ 135,974 $ 312 $ 524 $ (7,148) $ 129,662 Provision for loan losses 9,556 — — — 9,556 Noninterest income 27,955 18,570 13,339 (502) 59,362 Noninterest expense 129,626 13,729 8,823 819 152,997 Income (loss) before income taxes (benefit) 24,747 5,153 5,040 (8,469) 26,471 Income taxes (benefit) 17,102 (1,033) 423 (6,077) 10,415 Net income (loss) $ 7,645 $ 6,186 $ 4,617 $ (2,392) $ 16,056 Total assets $ 4,336,301 $ 99,685 $ 15,979 $ (39,264) $ 4,412,701 December 31, 2016 Net interest income (expense) $ 109,950 $ 1,003 $ — $ (5,699) $ 105,254 Provision for loan losses 5,591 — — — 5,591 Noninterest income 41,055 22,979 8,073 (50) 72,057 Noninterest expense 99,003 15,104 6,533 649 121,289 Income (loss) before income taxes (benefit) 46,411 8,878 1,540 (6,398) 50,431 Income taxes (benefit) 17,129 3,332 115 (1,687) 18,889 Net income (loss) $ 29,282 $ 5,546 $ 1,425 $ (4,711) $ 31,542 Total assets $ 3,170,630 $ 129,943 $ 5,550 $ (72,400) $ 3,233,723 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | Note 24 – Related Party Transactions The Company utilizes the services of a company to act as a general manager for the construction of new 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, 2018, 2017 and 2016, the Company paid $418,000, $20,000 and $161,000, respectively, to this company for work on various projects. A former member of our board of directors had an ownership interest in the Company’s office building located in Clayton, Missouri and three of the Bank’s full-service branch facilities as of December 31, 2018. During the years ended December 31, 2018, 2017 and 2016, the Company paid rent on these properties of $712,000, $719,000 and $706,000, respectively. A member of our board of directors has an ownership interest in a building the Company utilizes for office space located in Effingham, IL. During the year ended December 31, 2018, the Company paid rent on this space of $42,000. A member of our board of directors is an executive and board member of a company we utilize for relationship and marketplace studies. During the year ended December 31, 2017, the Company paid $116,000 for these services. |
REVENUE FROM CONTRACT WITH CUST
REVENUE FROM CONTRACT WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from contract with customers | |
Revenue from contract with customers | Note 25 – Revenue From Contracts with Customers On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. As stated in “ Note 2 – Basis of Presentation and Summary of Significant Accounting Policies ,” the implementation of the new standard did not have a material impact on the measurement or recognition of revenue. Since the impact of applying the standard was determined to be immaterial, the Company did not record a cumulative effect adjustment to beginning retained earnings on January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and investment securities. In addition, certain noninterest income streams such as commercial FHA revenue, residential mortgage banking revenue and gain on sales of investment securities, net are also not in scope of the new guidance. Topic 606 is applicable to noninterest income streams such as wealth management revenue, service charges on deposit accounts, interchange revenue, gain on sales of other real estate owned, and certain other noninterest income streams. The recognition of revenue associated with these noninterest income streams did not change significantly from current practice upon adoption of Topic 606. The noninterest income streams considered in-scope by Topic 606 are discussed below. Wealth Management Revenue. Wealth management revenue is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company also earns investment advisory fees through its SEC registered investment advisory subsidiary. The Company’s performance obligation in both of these instances is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and contractually determined fee schedules. Payment is generally received a few days after month end through a direct charge to each customer’s account. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Fees generated from transactions executed by the Company’s third party broker dealer are remitted by them to the Company on a monthly basis for that month’s transactional activity. Service Charges on Deposit Accounts. Service charges on deposit accounts consist of fees received under depository agreements with customers to provide access to deposited funds, serve as custodian of deposited funds, and when applicable, pay interest on deposits. These service charges primarily include non-sufficient fund fees and other account related service charges. Non-sufficient fund fees are earned when a depositor presents an item for payment in excess of available funds, and the Company, at its discretion, provides the necessary funds to complete the transaction. The Company generates other account related service charge revenue by providing depositors proper safeguard and remittance of funds as well as by delivering optional services for depositors, such as check imaging or treasury management, that are performed upon the depositor’s request. The Company’s performance obligation for the proper safeguard and remittance of funds, monthly account analysis and any other monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account. Interchange Revenue. Interchange revenue includes debit / credit card income and ATM user fees. Card income is primarily comprised of interchange fees earned for standing ready to authorize and providing settlement on card transactions processed through the MasterCard interchange network. The levels and structure of interchange rates are set by MasterCard and can vary based on cardholder purchase volumes. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with completion of the Company’s performance obligation, the transaction processing services provided to the cardholder. Payment is typically received immediately or in the following month. ATM fees are primarily generated when a Company cardholder withdraws funds from a non-Company ATM or a non-Company cardholder withdraws funds from a Company ATM. The Company satisfies its performance obligation for each transaction at the point in time when the ATM withdrawal is processed. Gain on Sales of Other Real Estate Owned. The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant financing component is present. Other Noninterest Income. The other noninterest income revenue streams within the scope of Topic 606 consist of merchant services revenue, safe deposit box rentals, wire transfer fees, paper statement fees, check printing commissions, and other noninterest related fees. Revenue from the Company’s merchant services business consists principally of transaction and account management fees charged to merchants for the electronic processing of transactions. These fees are net of interchange fees paid to the credit card issuing bank, card company assessments, and revenue sharing amounts. Account management fees are considered earned at the time the merchant’s transactions are processed or other services are performed. Fees related to the other components of other noninterest income within the scope of Topic 606 are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at the point in time the customer uses the selected service to execute a transaction. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended December 31, 2018, 2017 and 2016: (dollars in thousands) 2018 2017 2016 Noninterest income - in-scope of Topic 606 Wealth management revenue: Trust management/administration fees $ 16,099 $ 9,751 $ 5,985 Investment advisory fees 2,041 1,364 — Investment brokerage fees 1,065 1,388 1,324 Other 1,308 837 782 Service charges on deposit accounts: Nonsufficient fund fees 7,672 4,193 2,562 Other 2,768 1,782 1,342 Interchange revenues 10,674 5,353 3,750 Other income: Merchant services revenue 1,650 1,103 1,697 Other 2,935 1,869 1,815 Noninterest income - out-of-scope of Topic 606 25,579 31,722 52,800 Total noninterest income $ 71,791 $ 59,362 $ 72,057 Contract Balances. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2018 and 2017, the Company did not have any significant contract balances. Contract Acquisition Costs. In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition costs. |
PARENT COMPANY ONLY FINANCIAL I
PARENT COMPANY ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Assets: Cash $ 20,312 $ 60,424 Investment in common stock of subsidiaries 764,483 563,541 Accrued income taxes receivable — 3,300 Other assets 2,330 2,303 Total assets $ 787,125 $ 629,568 Liabilities: Subordinated debt $ 94,134 $ 93,972 Trust preferred debentures 47,794 47,330 Other borrowings 33,021 37,294 Accrued income taxes payable 778 — Deferred tax liabilities, net 972 252 Other liabilities 1,901 1,175 Total liabilities 178,600 180,023 Shareholders’ equity 608,525 449,545 Total liabilities and shareholders’ equity $ 787,125 $ 629,568 Condensed Statements of Income (dollars in thousands) Years ended December 31, 2018 2017 2016 Dividends from subsidiaries $ 17,000 $ 19,500 $ — Other income 6 4 428 Interest expense (10,714) (7,162) (5,699) Other expense (1,180) (1,295) (1,130) Income (loss) before income tax benefit and equity in undistributed income (loss) of subsidiaries 5,112 11,047 (6,401) Income tax benefit 2,312 6,080 1,687 Income (loss) before equity in undistributed income (loss) of subsidiaries 7,424 17,127 (4,714) Equity in undistributed income (loss) of subsidiaries 31,997 (1,071) 36,256 Net income $ 39,421 $ 16,056 $ 31,542 Condensed Statements of Cash Flows (dollars in thousands) Years ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 39,421 $ 16,056 $ 31,542 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed (income) loss of subsidiaries (31,997) 1,071 (36,256) Amortization of restricted stock awards 1,199 836 555 Compensation expense for stock option grants 334 548 492 Change in other assets 3,273 (3,226) 4,237 Change in other liabilities 2,863 1,649 225 Net cash provided by operating activities 15,093 16,934 795 Cash flows from investing activities: Net cash paid in acquisition (32,890) (60,457) — Capital injection to subsidiaries — (350) (25,250) Net cash used in investing activities (32,890) (60,807) (25,250) Cash flows from financing activities: Payment made on subordinated debt — — (8,000) Proceeds from issuance of subordinated debt, net of issuance costs — 39,354 — Proceeds from other borrowings, net of issuance costs — 39,964 — Payments made on other borrowings (4,286) (2,857) — Cash dividends paid on preferred stock (330) (184) (9,853) Cash dividends paid on common stock (19,977) (14,008) — Proceeds from issuance of common stock in initial public offering, net of issuance costs — — 71,475 Proceeds from issuance of common stock under employee benefit plans 2,278 3,225 1,318 Net cash (used in) provided by financing activities (22,315) 65,494 54,940 Net (decrease) increase in cash (40,112) 21,621 30,485 Cash: Beginning of year 60,424 38,803 8,318 End of year $ 20,312 $ 60,424 $ 38,803 |
QUARTERLY CONDENSED FINANCIAL I
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) | |
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, 2018 and 2017: 2018 Quarter Ended (dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 46,505 $ 58,283 $ 56,987 $ 61,592 Interest expense 8,320 9,997 11,906 13,057 Net interest income 38,185 48,286 45,081 48,535 Provision for loan losses 2,006 1,854 2,103 3,467 Net interest income after provision for loan losses 36,179 46,432 42,978 45,068 Noninterest income 16,502 15,847 18,272 21,170 Noninterest expense 49,499 46,452 50,317 45,375 Income before income taxes 3,182 15,827 10,933 20,863 Income taxes 1,376 3,045 2,436 4,527 Net income 1,806 12,782 8,497 16,336 Preferred stock dividends 36 36 35 34 Net income available to common shareholders $ 1,770 $ 12,746 $ 8,462 $ 16,302 Per common share data: Basic earnings per common share $ 0.08 $ 0.53 $ 0.35 $ 0.68 Diluted earnings per common share 0.08 0.52 0.35 0.67 2017 Quarter Ended (dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 31,839 $ 34,528 $ 43,246 $ 43,500 Interest expense 4,378 5,128 6,481 7,464 Net interest income 27,461 29,400 36,765 36,036 Provision for loan losses 1,533 458 1,489 6,076 Net interest income after provision for loan losses 25,928 28,942 35,276 29,960 Noninterest income 16,342 13,619 15,403 13,998 Noninterest expense 30,797 37,645 48,363 36,192 Income before income taxes 11,473 4,916 2,316 7,766 Income taxes 2,983 1,377 280 5,775 Net income $ 8,490 $ 3,539 $ 2,036 $ 1,991 Per common share data: Basic earnings per common share $ 0.54 $ 0.21 $ 0.10 $ 0.10 Diluted earnings per common share 0.52 0.20 0.10 0.10 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for annual periods presented herein, have been included. Certain reclassifications of 2017 and 2016 amounts have been made to conform to the 2018 presentation but do not have an effect on net income. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying consolidated financial statements. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest‑bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days. |
Investment Securities | Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage‑backed securities and non‑agency mortgage‑backed securities. Securities transactions are recorded on a trade date basis. The Company classifies its securities as equity, available for sale or held to maturity at the time of purchase. Investments in stock of a publicly traded company or in mutual funds are classified as equity securities. Equity securities are recorded at fair value with unrealized gains and losses recognized in 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; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Purchase premiums are amortized over the estimated life or to the earliest call date and purchase discounts are accreted over the estimated life of the related investment security as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized in interest income upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available‑for‑sale securities are determined using the specific identification method and are included in other noninterest income. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. |
Nonmarketable Equity Securities | Nonmarketable Equity Securities Nonmarketable equity securities include the Bank’s required investments in the stock of the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”). The Bank is a member of the FHLB system as well as its regional FRB. Members of the FHLB are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock and FRB stock are both carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. |
Loans | Loans Non‑Purchased Credit Impaired loans (“Non-PCI loans”). 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 financing leases to small businesses for purchases of business equipment. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the leased property is delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual value is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, we rely on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. Our estimates are reviewed continuously to ensure reasonableness; however, the amounts we will ultimately realize could differ from the estimated amounts. If the review results in a lower estimate than had been previously established, a determination is made as to whether the decline in estimated residual value is other‑than‑temporary. If the decline in estimated unguaranteed residual value is judged to be other‑than‑temporary, the accounting for the transaction is revised using the changed estimate. The resulting reduction in the investment is recognized as a loss in the period in which the estimate is changed. An upward adjustment of the estimated residual value is not recorded. Purchased Credit Impaired loans (“PCI loans”). We account for PCI loans under ASC 310‑30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“acquired impaired loan accounting”) when we acquire loans deemed to be impaired or when there is evidence of credit deterioration since their origination and it is probable at the date of acquisition that we would be unable to collect all contractually required payments. Revolving credit agreements, such as commercial lines of credit and home equity lines, and lease financings are excluded from PCI loans. For PCI loans, we (i) determine the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimate the amount and timing of undiscounted expected principal and interest payments including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loans and such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is initially determined by discounting expected cash flows. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income on a level‑yield basis over the estimated life of the acquired loans. The excess of expected cash flows at acquisition over the initial fair value of the PCI loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to acquisition, the Company aggregates loans into pools of loans with common credit risk characteristics such as loan type and risk rating. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference or an addition to accretable yield. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. Under acquired impaired loan accounting, PCI loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans. Impaired loans. A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual status, any loan past due 90 days or more and still accruing interest, and performing troubled debt restructured loans. Income from loans on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral‑dependent loan is charged‑off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral‑dependent is set up as a specific reserve. Troubled Debt Restructurings. A loan is classified as a troubled debt restructuring when we grant a concession to a borrower experiencing financial difficulties. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. Loans restructured at a market rate of a new loan with comparable risk at the time the loan is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if the loans are in compliance with their modified terms. A loan that has been placed on nonaccrual that is subsequently restructured will usually remain on nonaccrual status until the borrower is able to demonstrate repayment performance in compliance with the restructured terms for a sustained period, typically for six months. A loan that has not been placed on nonaccrual may be restructured and such loan may remain on accrual status after such restructuring. In these circumstances, the borrower has made payments before and after the restructuring. Generally, this restructuring involves a reduction in the loan interest rate and/or a change to interest‑only payments for a period of time. A restructured loan is considered impaired despite its accrual status and a specific reserve is calculated based on the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Allowance for Loan Losses. The allowance for loan losses (“allowance”) provides for probable losses in the loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the loan portfolio but that have not been specifically identified. The allowance is comprised of specific allowances (assessed for loans that have known credit weaknesses), general allowances based on historical loan loss experience for each loan type and other factors for imprecision in the subjective nature of the general allowance methodology and an allowance for PCI loans. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio. Our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Our regulators may require the Company to recognize additions to the allowance based on their judgments related to information available to them at the time of their examinations. Acquired non‑PCI and PCI loans are recorded at their estimated fair value at the date of acquisition, with the estimated fair value including a component for estimated credit losses. These loans, however, may require an allowance subsequent to their acquisition. An allowance may be set aside in the future for acquired non‑PCI loans based on our allowance methodology for non‑PCI loans. An allowance may be set aside in the future for PCI loans if the PCI loan pools experience a decrease in expected cash flows as compared to those projected at the acquisition date. In determining the allowance and the related provision for loan losses, the Company considers three principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired commercial, commercial real estate, construction and land development loans, (ii) allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology and (iii) valuation allowances on PCI loan pools based on decreases in expected cash flows. The first element reflects the Company’s establishment of valuation allowances based upon probable losses identified during the systematic review of impaired commercial, commercial real estate, construction and land development loans in the non‑purchased credit impaired loan portfolios. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, expected future cash flows and discounted collateral exposure. The Company measures the investment in an impaired loan based on one of three methods: the loan’s observable market price; the fair value of the collateral; or the present value of expected future cash flows discounted at the loan’s effective interest rate. It is the Company’s general policy to, at least annually, obtain new appraisals on impaired loans that are primarily secured by real estate. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan on nonaccrual status and a portion is deemed not collectible, the portion of the impairment that is deemed not collectible is charged off and deducted from the allowance. The remaining carrying value of the impaired loan is classified as a nonperforming loan. When the Company determines that the net realizable value of the collateral is less than the carrying value of an impaired loan but believes it is probable it will recover this impairment, the Company establishes a valuation allowance for such impairment. The second element relates to allocations, by loan classes, on loan portfolios based on historical loan loss experience and on other factors for the imprecision in the overall allowance methodology. All loans are not evaluated individually for impairment and any individually evaluated loans determined not to be impaired are segmented into groups based on similar risk characteristics, as described above. Historical loss rates for each risk group, which are updated quarterly, are quantified using all recorded loan charge‑offs and recoveries and changes in specific allowances on loans. These historical loss rates for each risk group are used as the starting point to determine the level of the allowance. The Company’s methodology incorporates an estimated loss emergence period for each loan category. The loss emergence period is the period of time from when a borrower experiences a loss event and when the actual loss is recognized in the financial statements, generally at the time of initial charge‑off of the loan balance. The Company’s methodology also includes qualitative risk factors that allow management to adjust its estimate of losses based on the most recent information available and to address other limitations in the quantitative component that is based on historical loss rates. Such risk factors are generally reviewed and updated quarterly, as appropriate, and are adjusted to reflect actual changes and anticipated changes in national and local economic conditions and developments, the volume and severity of delinquent and internally classified loans, loan concentrations, assessment of trends in collateral values, and changes in lending policies and procedures, including underwriting standards and collections, charge‑off and recovery practices. The third element relates to PCI loans. PCI loans are aggregated into pools based on common risk characteristics. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors including changes in property values of collateral dependent loans, default rates and loss severities. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to PCI loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in, first, a reduction in the allowance allocated to PCI loans for the particular pool to the extent an allowance has been previously recorded, and then as an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in current and subsequent periods. |
Loans Held for Sale | Loans Held for Sale Loans held for sale consist of residential and commercial FHA mortgage loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method better reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. The changes in the fair value of loans held for sale are reflected in commercial FHA revenue and residential mortgage banking revenue on the consolidated statements of income. |
Mortgage Repurchase Reserve | Mortgage Repurchase Reserve The Company sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to investors are predominantly conventional residential first lien mortgages originated under our usual underwriting procedures, and are sold on a nonrecourse basis. The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected. The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions. Refer to Note 22 in the consolidated financial statements for additional information on the mortgage repurchase reserve. |
Premises and Equipment | Premises and Equipment Premises, furniture and equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation expense is computed principally on the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the life of the asset or the lease term. Estimated useful lives of premises and equipment range from 10 to 40 years and from 3 to 10 years, respectively. Maintenance and repairs are charged to operating expenses as incurred, while improvements that extend the useful life of assets are capitalized and depreciated over the estimated remaining life. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. |
Other Real Estate Owned | Other Real Estate Owned Other real estate owned (“OREO”) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Any write‑down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income and expense from the operations of OREO and decreases in valuations are included in OREO expense in the consolidated statements of income. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill resulting from a business combination is generally determined as the excess of the fair value of consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are typically amortized over a period ranging from 1 to 20 years using an accelerated method of amortization. On a periodic basis, we evaluate events and circumstances that may indicate a change in the recoverability of the carrying value. |
Mortgage Servicing Rights | Mortgage Servicing Rights When loans are sold with servicing retained, a servicing rights asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. As the Company has not elected to subsequently measure servicing assets under the fair value measurement method, the Company follows the amortization method. 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 FHA mortgages as earned based on the specific contractual terms. This revenue, along with changes in impairment on servicing rights, is reported in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income. |
Mortgage Servicing Rights Held for Sale | Mortgage Servicing Rights Held for Sale Mortgage servicing rights held for sale consist of residential mortgage servicing rights that management has committed to a plan to sell and has the ability to sell them to a buyer in their present condition. Mortgage servicing rights held for sale are carried at the lower of their carrying value or fair value less estimated costs to sell. Decreases in the valuation of mortgage servicing rights held for sale are included in loss on mortgage servicing rights held for sale in the consolidated statements of income. |
Cash Surrender Value of Life Insurance Policies | Cash Surrender Value of Life Insurance Policies We have purchased life insurance policies on the lives of certain officers and key employees and are the owner and beneficiary of the policies. These policies provide an efficient form of funding for long‑term retirement and other employee benefits costs. These policies are recorded as cash surrender value of life insurance policies in the consolidated balance sheets at each policy’s respective cash surrender value, with changes in value recorded in noninterest income in the consolidated statements of income. |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. On the date the derivative contract is entered into, the derivative is designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability “cash flow” hedge. Changes in the fair value of a derivative that is highly effective as—and that is designated and qualifies as—a cash flow hedge are recorded in accumulated other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable‑rate asset or liability are recorded in earnings). We formally document all relationships between hedging instruments and hedged items, as well as the risk‑management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, hedge accounting is prospectively discontinued, as discussed below. Hedge accounting is prospectively discontinued when (a) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (b) the derivative expires or is sold, terminated, or exercised; (c) the derivative is no longer designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the consolidated balance sheet at its fair value, and gains and losses that were in accumulated other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the consolidated balance sheet, with subsequent changes in its fair value recognized in current‑period earnings. The Company also enters into interest rate lock commitments, which are agreements to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Interest rate lock commitments for mortgage loans that will be held for resale are carried at fair value on the consolidated balance sheet with changes in fair value reflected in commercial FHA revenue and residential mortgage banking revenue. The Company also has forward loan sales commitments related to its interest rate lock commitments and its loans held for sale. Forward loan sales commitments that meet the definition of a derivative are recorded at fair value in the consolidated balance sheet with changes in fair value reflected in commercial FHA and residential mortgage banking income. |
Credit Related Financial Instruments | Credit‑Related Financial Instruments In the ordinary course of business, the Company has entered into credit‑related financial instruments consisting of commitments to extend credit, commercial letters of credit and standby letters of credit. The notional amount of these commitments is not reflected in the consolidated financial statements until they are funded. A liability for losses related to unfunded commitments is maintained by the Company at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities and is included in other liabilities in the consolidated balance sheets. The determination of the adequacy of the liability is based on an evaluation of the unfunded credit facilities, including an assessment of historical commitment utilization experience, credit risk grading and historical loss rates. This process takes into consideration the same risk elements that are analyzed in the determination of the adequacy of the Company’s allowance for loan losses, as discussed above. Net adjustments to the liability for unfunded commitments are included in other noninterest expense in the consolidated statements of income. The liability for unfunded commitments totaled $1.2 million and $670,000 at December 31, 2018 and 2017, 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. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. This amendment superseded and replaced nearly all existing revenue recognition guidance, including industry-specific guidance, established a new control-based revenue recognition model, changed the basis for deciding when revenue is recognized over time or at a point in time, provided new and more detailed guidance on specific topics and expanded and improved disclosures about revenue. The impact of applying Topic 606 to the Company’s consolidated financial statements was determined to be immaterial on the measurement or recognition of revenue. The Company elected to implement this standard using the modified retrospective approach, with the cumulative effect recorded as an adjustment to opening retained earnings at January 1, 2018. Since the impact of applying the standard was determined to be immaterial, the Company did not record a cumulative effect adjustment to beginning retained earnings on January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with previous GAAP. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and investment securities. In addition, certain noninterest income streams such as commercial FHA revenue, residential mortgage banking revenue and gain on sales of investment securities, net are also not in scope of the new guidance. Topic 606 is applicable to noninterest income streams such as wealth management revenue, service charges on deposit accounts, interchange revenue, gain on sales of other real estate owned, and certain other noninterest income streams. The recognition of revenue associated with these noninterest income streams did not change significantly from current practice upon adoption of Topic 606. The noninterest income streams considered in-scope by Topic 606 are discussed in Note 25 in the consolidated financial statements. |
Stock Compensation Plans | Stock Compensation Plans Compensation cost for share‑based payment awards is based on the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a Black‑Scholes option pricing model. The fair value of restricted stock is determined based on the Company’s current market price on the date of grant. Compensation cost is recognized in the consolidated financial statements on a straight‑line basis over the requisite service period, which is generally defined as the vesting period. Additionally, the Company accounts for forfeitures as they occur. |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non‑owner changes in equity. Non‑owner equity changes include unrealized gains and losses on available for sale securities and changes in the fair value of cash flow hedges. These are components of comprehensive income and do not have an impact on the Company’s net income. |
Earnings per Share | Earnings per Share Earnings per share are calculated utilizing the two‑class method. Basic earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards FASB ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.” – In January 2016, the FASB issued this standard which is intended to improve the recognition and measurement of financial instruments. This standard, among other things: (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The adoption of ASU 2016-1 on January 1, 2018 did not have a material impact on its consolidated financial statements. 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. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This update became effective for the Company on January 1, 2019. In July 2018, the FASB issued supplementary ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which provides for an additional transition method allowing for a modified retrospective adoption approach where the guidance would only be applied to existing leases in effect at the adoption date and new leases going forward, with a cumulative effect adjustment to retained earnings as of the adoption date and additional required disclosures regarding leasing arrangements only for those periods after adoption. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company has elected the practical expedients permitted by ASU 2018-11. The Company developed and is currently executing on a project plan for implementing the provisions of the new lease standard. At the adoption date, the Company reported increased assets and liabilities of approximately $12.1 million on its consolidated statement of financial condition as a result of recognizing right-of-use assets and lease liabilities related to non-cancelable operating lease agreements for office space, which currently are not recorded on its consolidated statement of financial condition. T he Company does not expect the adoption of this guidance will be material to its Consolidated Statement of Income. FASB ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” – In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”).” The objective of this update is to improve financial reporting by providing timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will use forward-looking information to better understand their credit loss estimates. For public companies that are filers with the SEC, this update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for any organization for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 . As previously disclosed, the Company has established a cross-functional governance structure, which oversees overall strategy for implementation of Topic 326. Additionally, a working group was formed and has developed a project plan focused on understanding the ASU, researching issues, data requirements, technology solutions and future state processes. The project plan is targeting data and model validation completion during the first half of 2019, with parallel processing of our existing allowance for loan losses model with CECL until implementation. The Company continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. The Company also continues to believe that the adoption of the standard will result in an overall increase in the allowance for loan losses to cover credit losses over the estimated life of the financial assets. However, the magnitude of the increase in its allowance for loan losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time. FASB ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” – In August 2017, the FASB issued this standard, the objectives of which are to: (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities; and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. This standard is effective for interim and annual reporting periods beginning after December 15, 2018; early adoption is permitted. The Company currently does not designate any derivative financial instruments as formal hedging relationships, and therefore, does not utilize hedge accounting. However, the Company is currently evaluating this standard to determine whether its provisions will enhance the Company’s ability to employ risk management strategies, while improving the transparency and understanding of those strategies for financial statement users. FASB ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” – In February 2018, ASU 2018-02 was issued following the enactment of the Tax Cuts and Jobs Act (the “Tax Act”), which changed the Company’s federal income tax rate from 35% to 21%. This standard allows an entity to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The standard is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company adopted this standard in the first quarter of 2018. The impact of this update on the Company’s consolidated financial statements was not material. FASB ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” – In August 2018, the FASB issued ASU No. 2018-13 to improve the disclosure requirements on fair value measurements. The amendment removes certain disclosures required by Topic 820 related to transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements. The update also adds certain disclosure requirements related to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update become effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements, but it is not expected to have a material impact. FASB ASU No. 2018-15, “ Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract”– In August 2018, the FASB issued ASU No. 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update become effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACQUISITIONS | |
Schedule of allocation of consideration | (dollars in thousands) Alpine Centrue Assets acquired: Cash and cash equivalents $ 69,459 $ 42,461 Investment securities available for sale 293,428 149,013 Equity securities 8,372 — Loans 786,186 679,582 Loans held for sale 3,416 531 Premises and equipment 18,126 17,147 Other real estate owned 53 4,983 Nonmarketable equity securities 2,038 8,168 Accrued interest receivable 4,414 2,376 Mortgage servicing rights — 1,933 Mortgage servicing rights held for sale 3,068 — Intangible assets 27,400 11,070 Cash surrender value of life insurance policies 22,578 36,349 Deferred tax assets, net — 34,339 Other assets 4,770 2,256 Total assets acquired 1,243,308 990,208 Liabilities assumed: Deposits 1,111,130 739,867 Short-term borrowings — 14,434 FHLB advances and other borrowings 18,127 95,332 Trust preferred debentures — 7,565 Accrued interest payable 539 275 Deferred tax liabilities, net 1,749 — Other liabilities 4,500 3,600 Total liabilities assumed 1,136,045 861,073 Net assets acquired 107,263 129,135 Goodwill 65,964 47,444 Total consideration paid $ 173,227 $ 176,579 Intangible assets: Core deposit intangible $ 21,100 $ 11,070 Customer relationship intangible 6,300 — Total intangible assets $ 27,400 $ 11,070 Estimated useful lives: Core deposit intangible 13 years 8 years Customer relationship intangible 13 years N/A |
Schedule of acquired loan data | Best Estimate at Acquisition Date of Fair Value Gross Contractual Contractual Cash of Acquired Loans Amounts Receivable Flows Not Expected (dollars in thousands) at Acquisition Date at Acquisition Date to be Collected Alpine: Acquired receivables subject to ASC 310-30 $ 34,993 $ 50,342 $ 9,254 Acquired receivables not subject to ASC 310-30 751,193 774,836 4,244 Centrue: Acquired receivables subject to ASC 310-30 $ 11,381 $ 20,253 $ 7,227 Acquired receivables not subject to ASC 310-30 668,201 821,338 4,835 |
Schedule of unaudited pro-forma information | (dollars in thousands, except per share data) 2018 2017 Revenue (1) $ 264,670 $ 280,538 Net income 42,261 31,188 Diluted earnings per common share $ 1.73 $ 1.28 (1) Net interest income plus noninterest income |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENT SECURITIES | |
Schedule of investment securities classified as available for sale | 2018 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Available for sale securities U.S. Treasury securities $ 25,018 $ — $ 368 $ 24,650 Government sponsored entity debt securities 76,554 17 887 75,684 Agency mortgage-backed securities 329,690 371 3,756 326,305 State and municipal securities 156,795 3,282 815 159,262 Corporate securities 72,302 383 1,135 71,550 Total available for sale securities $ 660,359 $ 4,053 $ 6,961 $ 657,451 Equity securities (1) $ 3,334 2017 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Available for sale securities U.S. Treasury securities $ 28,005 $ — $ 287 $ 27,718 Government sponsored entity debt securities 25,445 41 275 25,211 Agency mortgage-backed securities 233,606 882 2,101 232,387 State and municipal securities 99,449 3,632 514 102,567 Corporate securities 58,904 1,087 179 59,812 Equity securities (1) 2,715 140 25 2,830 Total available for sale securities $ 448,124 $ 5,782 $ 3,381 $ 450,525 (1) As a result of accounting guidance adopted in the first quarter of 2018, equity securities are no longer presented within available for sale securities and are now presented within equity securities in the consolidated balance sheet for the current period. For further discussion of this guidance, see Note 1 to the consolidated financial statements. |
Schedule of unrealized losses and fair values for investment securities | 2018 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value loss value loss value loss Available for sale securities U.S. Treasury securities $ 5,012 $ 1 $ 19,638 $ 367 $ 24,650 $ 368 Government sponsored entity debt securities 51,717 195 23,223 692 74,940 887 Agency mortgage-backed securities 139,115 528 126,561 3,228 265,676 3,756 State and municipal securities 15,791 146 27,692 669 43,483 815 Corporate securities 32,616 575 8,535 560 41,151 1,135 Total available for sale securities $ 244,251 $ 1,445 $ 205,649 $ 5,516 $ 449,900 $ 6,961 2017 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value loss value loss value loss Available for sale securities U.S. Treasury securities $ 19,758 $ 251 $ 7,960 $ 36 $ 27,718 $ 287 Government sponsored entity debt securities 24,168 275 — — 24,168 275 Agency mortgage-backed securities 124,192 1,500 19,530 601 143,722 2,101 State and municipal securities 29,338 331 5,889 183 35,227 514 Corporate securities 5,917 85 3,463 94 9,380 179 Equity securities (1) 2,603 25 — — 2,603 25 Total available for sale securities $ 205,976 $ 2,467 $ 36,842 $ 914 $ 242,818 $ 3,381 (1) As a result of accounting guidance adopted in the first quarter of 2018, equity securities are no longer presented within available for sale securities and are now presented within equity securities in the consolidated balance sheet for the current period. For further discussion of this guidance, see Note 1 to the consolidated financial statements. |
Contractual maturity of amortized cost and fair value | Amortized Fair (dollars in thousands) cost value Available for sale securities: Within one year $ 39,092 $ 39,087 After one year through five years 122,564 122,554 After five years through ten years 138,494 138,937 After ten years 30,519 30,568 Mortgage-backed securities 329,690 326,305 Total available for sale securities $ 660,359 $ 657,451 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LOANS | |
Summary of loans | 2018 2017 Non-PCI PCI Non-PCI PCI (dollars in thousands) Loans Loans (1) Total Loans Loans (1) Total Loans: Commercial $ 806,027 $ 4,857 $ 810,884 $ 553,257 $ 2,673 $ 555,930 Commercial real estate 1,619,903 19,252 1,639,155 1,427,076 12,935 1,440,011 Construction and land development 223,898 8,331 232,229 199,853 734 200,587 Total commercial loans 2,649,828 32,440 2,682,268 2,180,186 16,342 2,196,528 Residential real estate 569,289 8,759 578,048 447,602 5,950 453,552 Consumer 611,408 1,776 613,184 371,286 169 371,455 Lease financing 264,051 — 264,051 205,143 — 205,143 Total loans $ 4,094,576 $ 42,975 $ 4,137,551 $ 3,204,217 $ 22,461 $ 3,226,678 (1) The unpaid principal balance for PCI loans totaled $56.9 million and $32.8 million as of December 31, 2018 and 2017, respectively. |
Summary of recorded investment (excluding PCI loans) by risk category | 2018 2017 Commercial Construction Commercial Construction Real and Land Real and Land (dollars in thousands) Commercial Estate Development Total Commercial Estate Development Total Acceptable credit quality $ 748,296 $ 1,536,127 $ 218,798 $ 2,503,221 $ 510,928 $ 1,384,630 $ 191,872 $ 2,087,430 Special mention 35,103 15,306 3,448 53,857 12,290 11,497 — 23,787 Substandard 14,139 46,976 — 61,115 27,718 14,695 — 42,413 Substandard – nonaccrual 8,489 21,494 1,171 31,154 1,266 12,482 785 14,533 Doubtful — — — — — — — — Not graded — — 481 481 1,055 3,772 7,196 12,023 Total (excluding PCI) $ 806,027 $ 1,619,903 $ 223,898 $ 2,649,828 $ 553,257 $ 1,427,076 $ 199,853 $ 2,180,186 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, 2018 and 2017: 2018 2017 Residential Lease Residential Lease (dollars in thousands) Real Estate Consumer Financing Total Real Estate Consumer Financing Total Performing $ 562,019 $ 610,839 $ 263,094 $ 1,435,952 $ 441,418 $ 370,999 $ 203,797 $ 1,016,214 Impaired 7,270 569 957 8,796 6,184 287 1,346 7,817 Total (excluding PCI) $ 569,289 $ 611,408 $ 264,051 $ 1,444,748 $ 447,602 $ 371,286 $ 205,143 $ 1,024,031 |
Summary of impaired loans (excluding PCI loans) | (dollars in thousands) 2018 2017 Nonaccrual loans: Commercial $ 8,489 $ 1,266 Commercial real estate 21,494 12,482 Construction and land development 1,171 785 Residential real estate 5,894 5,204 Consumer 388 234 Lease financing 751 1,346 Total nonaccrual loans 38,187 21,317 Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial 4 2,538 Commercial real estate 149 — Construction and land development 85 — Residential real estate 566 51 Consumer 51 53 Lease financing 206 — Total accruing loans contractually past due 90 days or more as to interest or principal payments 1,061 2,642 Loans modified under troubled debt restructurings and still accruing: Commercial 435 299 Commercial real estate 2,225 1,515 Construction and land development 51 58 Residential real estate 810 929 Consumer 130 — Lease financing — — Total loans modified under troubled debt restructurings and still accruing 3,651 2,801 Total impaired loans (excluding PCI) $ 42,899 $ 26,760 There was no interest income recognized on nonaccrual loans during 2018, 2017 and 2016 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 $1.8 million, $860,000 and $718,000 in 2018, 2017 and 2016, respectively. The Company recognized interest income on commercial and commercial real estate loans modified under troubled debt restructurings of $97,000, $85,000 and $339,000 in 2018, 2017 and 2016, respectively. The following table presents impaired loans (excluding PCI loans) by portfolio and related valuation allowance, as of December 31, 2018 and 2017: 2018 2017 Unpaid Related Unpaid Related Recorded Principal Valuation Recorded Principal Valuation (dollars in thousands) Investment Balance Allowance Investment Balance Allowance Impaired loans with a valuation allowance: Commercial $ 7,945 $ 8,102 $ 4,448 $ 3,237 $ 3,297 $ 526 Commercial real estate 7,496 13,844 523 2,297 3,508 329 Construction and land development 171 171 54 103 102 10 Residential real estate 4,055 4,662 554 4,028 4,705 566 Consumer 428 444 45 266 279 29 Lease financing 766 766 361 1,064 1,064 345 Total impaired loans with a valuation allowance 20,861 27,989 5,985 10,995 12,955 1,805 Impaired loans with no related valuation allowance: Commercial 983 4,392 — 866 5,782 — Commercial real estate 16,372 16,921 — 11,700 17,359 — Construction and land development 1,136 1,136 — 740 780 — Residential real estate 3,215 3,516 — 2,156 2,380 — Consumer 141 145 — 21 21 — Lease financing 191 191 — 282 282 — Total impaired loans with no related valuation allowance 22,038 26,301 — 15,765 26,604 — Total impaired loans: Commercial 8,928 12,494 4,448 4,103 9,079 526 Commercial real estate 23,868 30,765 523 13,997 20,867 329 Construction and land development 1,307 1,307 54 843 882 10 Residential real estate 7,270 8,178 554 6,184 7,085 566 Consumer 569 589 45 287 300 29 Lease financing 957 957 361 1,346 1,346 345 Total impaired loans (excluding PCI) $ 42,899 $ 54,290 $ 5,985 $ 26,760 $ 39,559 $ 1,805 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 $11.4 million and $12.8 million at December 31, 2018 and 2017, respectively. The average balance of impaired loans (excluding PCI loans) and interest income recognized on impaired loans during the years ended December 31, 2018, 2017 and 2016 are included in the table below: 2018 2017 2016 Interest Income Interest Income Interest Income Average Recognized Average Recognized Average Recognized Recorded While on Recorded While on Recorded While on (dollars in thousands) Investment Impaired Status Investment Impaired Status Investment Impaired Status Impaired loans with a valuation allowance: Commercial $ 8,359 $ 30 $ 2,969 $ 15 $ 3,974 $ 15 Commercial real estate 8,082 45 5,408 70 2,379 306 Construction and land development 175 3 83 4 87 7 Residential real estate 3,855 41 3,854 38 3,782 30 Consumer 360 — 299 — 221 — Lease financing 766 — 1,064 — 1,331 — Total impaired loans with a valuation allowance 21,597 119 13,677 127 11,774 358 Impaired loans with no related valuation allowance: Commercial 1,233 — 2,369 — 5,604 1 Commercial real estate 16,253 22 16,822 — 16,847 17 Construction and land development 1,152 — 815 — — — Residential real estate 3,348 22 2,055 3 1,179 2 Consumer 95 — 13 — 26 — Lease financing 191 — 282 — — — Total impaired loans with no related valuation allowance 22,272 44 22,356 3 23,656 20 Total impaired loans: Commercial 9,592 30 5,338 15 9,578 16 Commercial real estate 24,335 67 22,230 70 19,226 323 Construction and land development 1,327 3 898 4 87 7 Residential real estate 7,203 63 5,909 41 4,961 32 Consumer 455 — 312 — 247 — Lease financing 957 — 1,346 — 1,331 — Total impaired loans (excluding PCI) $ 43,869 $ 163 $ 36,033 $ 130 $ 35,430 $ 378 |
Summary of aging status of recorded investments in loans by portfolio (excluding PCI loans) | Accruing Loans 30-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total (dollars in thousands) Past Due Past Due or More Loans Past Due Current Loans Commercial $ 4,013 $ 2,581 $ 4 $ 8,489 $ 15,087 $ 790,940 $ 806,027 Commercial real estate 1,667 945 149 21,494 24,255 1,595,648 1,619,903 Construction and land development 989 — 85 1,171 2,245 221,653 223,898 Residential real estate 1,292 728 566 5,894 8,480 560,809 569,289 Consumer 5,211 2,533 51 388 8,183 603,225 611,408 Lease financing 4,322 932 206 751 6,211 257,840 264,051 Total loans (excluding PCI) $ 17,494 $ 7,719 $ 1,061 $ 38,187 $ 64,461 $ 4,030,115 $ 4,094,576 The following table presents the aging status of the recorded investment in loans by portfolio (excluding PCI loans) as of December 31, 2017: Accruing Loans 30-59 60-89 Past Due Days Days 90 Days Nonaccrual Total Total (dollars in thousands) Past Due Past Due or More Loans Past Due Current Loans Commercial $ 3,282 $ 177 $ 2,538 $ 1,266 $ 7,263 $ 545,994 $ 553,257 Commercial real estate 3,116 630 — 12,482 16,228 1,410,848 1,427,076 Construction and land development 1,953 — — 785 2,738 197,115 199,853 Residential real estate 897 632 51 5,204 6,784 440,818 447,602 Consumer 2,824 1,502 53 234 4,613 366,673 371,286 Lease financing 392 — — 1,346 1,738 203,405 205,143 Total loans (excluding PCI) $ 12,464 $ 2,941 $ 2,642 $ 21,317 $ 39,364 $ 3,164,853 $ 3,204,217 |
Summary of TDRs loans | 2018 2017 (dollars in thousands) Accruing (1) Non-accrual (2) Total Accruing (1) Non-accrual (2) Total Commercial $ 435 $ 406 $ 841 $ 299 $ — $ 299 Commercial real estate 2,225 9,103 11,328 1,515 9,915 11,430 Construction and land development 51 — 51 58 — 58 Residential real estate 810 853 1,663 929 282 1,211 Consumer 130 — 130 — — — Lease financing — — — — — — Total loans (excluding PCI) $ 3,651 $ 10,362 $ 14,013 $ 2,801 $ 10,197 $ 12,998 (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, 2018 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2018: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Troubled debt restructurings: Number of loans 2 2 — 7 25 — 36 Pre-modification outstanding balance $ 423 $ 1,571 $ — $ 708 $ 130 $ — $ 2,832 Post-modification outstanding balance 408 1,565 — 696 130 — 2,799 Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2017 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2017: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Troubled debt restructurings: Number of loans 1 1 — 4 — — 6 Pre-modification outstanding balance $ 362 $ 323 $ — $ 528 $ — $ — $ 1,213 Post-modification outstanding balance 299 323 — 508 — — 1,130 Troubled debt restructurings that subsequently defaulted Number of loans — — — — — — — Recorded balance $ — $ — $ — $ — $ — $ — $ — The following table presents a summary of loans by portfolio that were restructured during the year ended December 31, 2016 and the loans by portfolio that were modified as TDRs within the previous twelve months that subsequently defaulted during the year ended December 31, 2016: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease Commercial Estate Development Estate Consumer Financing Total (dollars in thousands) Troubled debt restructurings: Number of loans 3 2 — 3 — — 8 Pre-modification outstanding balance $ 685 $ 10,207 $ — $ 206 $ — $ — $ 11,098 Post-modification outstanding balance 647 10,139 — 206 — — 10,992 Troubled debt restructurings that subsequently defaulted Number of loans — 1 — — — — 1 Recorded balance $ — $ 28 $ — $ — $ — $ — $ 28 |
Summary of changes in accretable yield for PCI loans | (dollars in thousands) 2018 2017 2016 Balance, beginning of period $ 5,732 $ 9,035 $ 10,526 New loans purchased – Alpine acquisition 6,095 — — New loans purchased – Centrue acquisition — 1,929 — Accretion (6,092) (5,546) (8,579) Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) 2,682 120 915 Reclassification from non-accretable 3,823 194 6,173 Balance, end of period $ 12,240 $ 5,732 $ 9,035 |
Summary of changes in allowance for loan losses | 2018 2017 2016 Non-PCI PCI Non-PCI PCI Non-PCI PCI (dollars in thousands) Loans Loans Total Loans Loans Total Loans Loans Total Balance, beginning of period $ 14,902 $ 1,529 $ 16,431 $ 13,744 $ 1,118 $ 14,862 $ 14,093 $ 1,895 $ 15,988 Provision for loan losses 9,246 184 9,430 9,295 261 9,556 6,425 (834) 5,591 Loan charge-offs (6,844) (145) (6,989) (9,822) — (9,822) (7,668) (68) (7,736) Loan recoveries 2,031 — 2,031 1,685 150 1,835 894 125 1,019 Net loan (charge-offs) recoveries (4,813) (145) (4,958) (8,137) 150 (7,987) (6,774) 57 (6,717) Balance, end of period $ 19,335 $ 1,568 $ 20,903 $ 14,902 $ 1,529 $ 16,431 $ 13,744 $ 1,118 $ 14,862 |
Summary of changes in allowance for loan losses, by loan portfolio | The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the year ended December 31, 2018 and provides details regarding the balance in the allowance for loan losses and the recorded investment in loans as of December 31, 2018 by impairment evaluation method: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Changes in allowance for loan losses in 2018: Beginning balance $ 5,256 $ 5,044 $ 518 $ 2,750 $ 1,344 $ 1,519 $ 16,431 Provision for loan losses 4,941 (207) (227) (517) 2,156 3,284 9,430 Charge-offs (1,236) (492) — (361) (1,876) (3,024) (6,989) Recoveries 563 378 81 169 530 310 2,031 Ending balance $ 9,524 $ 4,723 $ 372 $ 2,041 $ 2,154 $ 2,089 $ 20,903 Allowance for loan losses at December 31, 2018 attributable to: Loans individually evaluated for impairment $ 4,405 $ 476 $ 48 $ 233 $ — $ 330 $ 5,492 Loans collectively evaluated for impairment 43 47 6 321 45 31 493 Non-impaired loans collectively evaluated for impairment 4,971 3,356 318 1,051 1,926 1,728 13,350 Loans acquired with deteriorated credit quality (1) 105 844 — 436 183 — 1,568 Total allowance for loan losses $ 9,524 $ 4,723 $ 372 $ 2,041 $ 2,154 $ 2,089 $ 20,903 Recorded investment (loan balance) at December 31, 2018: Impaired loans individually evaluated for impairment $ 8,520 $ 23,431 $ 1,249 $ 3,929 $ 5 $ 668 $ 37,802 Impaired loans collectively evaluated for impairment 408 437 58 3,341 564 289 5,097 Non-impaired loans collectively evaluated for impairment 797,099 1,596,035 222,591 562,019 610,839 263,094 4,051,677 Loans acquired with deteriorated credit quality (1) 4,857 19,252 8,331 8,759 1,776 — 42,975 Total recorded investment (loan balance) $ 810,884 $ 1,639,155 $ 232,229 $ 578,048 $ 613,184 $ 264,051 $ 4,137,551 (1) Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows. The following table represents, by loan portfolio, a summary of changes in the allowance for loan losses for the year ended December 31, 2017 and provides details regarding the balance in the allowance for loan losses and the recorded investment in loans as of December 31, 2017 by impairment evaluation method: Commercial Loan Portfolio Other Loan Portfolio Commercial Construction Residential Real and Land Real Lease (dollars in thousands) Commercial Estate Development Estate Consumer Financing Total Changes in allowance for loan losses in 2017: Beginning balance $ 5,920 $ 3,225 $ 345 $ 2,929 $ 930 $ 1,513 $ 14,862 Provision for loan losses (118) 7,879 110 1 954 730 9,556 Charge-offs (737) (6,552) — (698) (794) (1,041) (9,822) Recoveries 191 492 63 518 254 317 1,835 Ending balance $ 5,256 $ 5,044 $ 518 $ 2,750 $ 1,344 $ 1,519 $ 16,431 Allowance for loan losses at December 31, 2017 attributable to: Loans individually evaluated for impairment $ 221 $ 281 $ 5 $ 302 $ — $ 261 $ 1,070 Loans collectively evaluated for impairment 305 48 5 264 29 84 735 Non-impaired loans collectively evaluated for impairment 4,230 4,379 504 1,644 1,166 1,174 13,097 Loans acquired with deteriorated credit quality (1) 500 336 4 540 149 — 1,529 Total allowance for loan losses $ 5,256 $ 5,044 $ 518 $ 2,750 $ 1,344 $ 1,519 $ 16,431 Recorded investment (loan balance) at December 31, 2017: Impaired loans individually evaluated for impairment $ 1,285 $ 13,554 $ 797 $ 3,700 $ 4 $ 568 $ 19,908 Impaired loans collectively evaluated for impairment 2,818 443 46 2,484 283 778 6,852 Non-impaired loans collectively evaluated for impairment 549,154 1,413,079 199,010 441,418 370,999 203,797 3,177,457 Loans acquired with deteriorated credit quality (1) 2,673 12,935 734 5,950 169 — 22,461 Total recorded investment (loan balance) $ 555,930 $ 1,440,011 $ 200,587 $ 453,552 $ 371,455 $ 205,143 $ 3,226,678 Loans acquired with deteriorated credit quality were originally recorded at fair value at the acquisition date and the risk of credit loss was recognized at that date based on estimates of expected cash flows. |
PREMISES AND EQUIPMENT, NET (Ta
PREMISES AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PREMISES AND EQUIPMENT | |
Summary of premises and equipment | (dollars in thousands) 2018 2017 Land $ 20,231 $ 16,109 Buildings and improvements 76,141 63,837 Furniture and equipment 29,858 25,843 Total 126,230 105,789 Accumulated depreciation (31,390) (29,627) Premises and equipment, net $ 94,840 $ 76,162 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of other mortgage notes serviced and changes in our mortgage servicing rights | (dollars in thousands) 2018 2017 2016 Mortgage servicing rights: Balance, beginning of period $ 55,714 $ 52,006 $ 47,589 Originated servicing 3,174 6,287 6,805 Amortization (2,636) (2,579) (2,388) Balance, end of period 56,252 55,714 52,006 Valuation allowances: Balance, beginning of period 3,254 1,712 — Additions 931 1,542 1,920 Reductions (1,380) — (208) Balance, end of period 2,805 3,254 1,712 Mortgage servicing rights, net $ 53,447 $ 52,460 $ 50,294 Fair value: At beginning of period $ 52,460 $ 50,294 $ 47,589 At end of period $ 53,447 $ 52,460 $ 50,294 |
Schedule of summary of key assumptions | Remaining Servicing Interest Years to Prepayment Servicing Discount Fee Rate Maturity Rate Cost Rate December 31, 2018: Commercial FHA mortgage loans 0.13 % 3.67 % 30.1 8.24 % $ 1,000 10 - 14 % December 31, 2017: Commercial FHA mortgage loans 0.12 % 3.67 % 30.3 8.27 % $ 1,000 10 - 14 % |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | (dollars in thousands) 2018 2017 Banking $ 149,035 $ 82,986 Commercial FHA origination and servicing 10,892 10,892 Wealth management 4,746 4,746 Total goodwill $ 164,673 $ 98,624 The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of December 31, 2018 and 2017 are summarized as follows: 2018 2017 Gross Gross Carrying Accumulated Carrying Accumulated (dollars in thousands) Amount Amortization Total Amount Amortization Total Core deposit intangibles $ 52,712 $ (24,803) $ 27,909 $ 31,612 $ (18,943) $ 12,669 Customer relationship intangibles 13,771 (4,304) 9,467 7,471 (3,208) 4,263 Total intangible assets $ 66,483 $ (29,107) $ 37,376 $ 39,083 $ (22,151) $ 16,932 |
Schedule of estimated future amortization expense of intangible assets | (dollars in thousands) Amount Year ending December 31, 2019 $ 6,716 2020 5,792 2021 5,032 2022 4,326 2023 3,620 Thereafter 11,890 Total $ 37,376 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DERIVATIVE INSTRUMENTS | |
Schedule of derivative instruments, fair value and notional amounts | Notional Amount Fair Value Gain (dollars in thousands) 2018 2017 2018 2017 Derivative Instruments (included in Other Assets): Interest rate lock commitments $ 264,710 $ 345,152 $ 4,492 $ 6,331 Forward commitments to sell mortgage-backed securities 276,871 372,824 — 31 Total $ 541,581 $ 717,976 $ 4,492 $ 6,362 Notional Amount Fair Value Loss (dollars in thousands) 2018 2017 2018 2017 Derivative Instruments (included in Other Liabilities): Forward commitments to sell mortgage-backed securities $ 54 $ — $ — $ — |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DEPOSITS | |
Schedule summarizes the classification of deposits | (dollars in thousands) 2018 2017 Noninterest-bearing demand $ 972,164 $ 724,443 Interest-bearing: Checking 1,002,275 785,934 Money market 862,171 646,426 Savings 442,132 281,212 Time 795,428 693,074 Total deposits $ 4,074,170 $ 3,131,089 |
Schedule of maturities of time deposits | (dollars in thousands) Amount Year ending December 31, 2019 $ 523,651 2020 135,754 2021 97,871 2022 22,183 2023 15,968 Thereafter 1 Total $ 795,428 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHORT-TERM BORROWINGS | |
Schedule of short term borrowings | Repurchase Agreements (dollars in thousands) 2018 2017 Outstanding at period-end $ 124,235 $ 156,126 Average amount outstanding 138,135 163,461 Maximum amount outstanding at any month end 173,387 196,278 Weighted average interest rate: During period 0.51 % 0.23 % End of period 0.71 % 0.28 % |
FHLB ADVANCES AND OTHER BORRO_2
FHLB ADVANCES AND OTHER BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FHLB ADVANCES AND OTHER BORROWINGS | |
Schedule of Federal Home Loan Bank (FHLB) advances | (dollars in thousands) 2018 2017 Midland States Bancorp, Inc. Term loan - variable interest rate equal to LIBOR plus 2.25%, which was 4.63% and 3.63% at December 31, 2018 and 2017, respectively – maturing May 25, 2020 $ 32,840 $ 37,113 Series G redeemable preferred stock - 181 shares at $1,000 per share 181 181 Midland States Bank FHLB advances – fixed rate, fixed term of $87.7 million and $145.0 million, at rates averaging 2.35% and 1.35% at December 31, 2018 and 2017, respectively – maturing through February 2023, and putable fixed rate of $520.0 million and $305.0 million at rates averaging 2.09% and 1.29% at December 31, 2018 and 2017, respectively, – maturing through August 2025 with call provisions through August 2021 607,610 450,137 FHLB advances – variable rate, fixed term, at rates averaging 1.20% at December 31, 2017 – maturing through March 2018 — 9,000 Other — 5 Total FHLB advances and other borrowings $ 640,631 $ 496,436 |
Schedule of payments over the next five years | (dollars in thousands) Amount 2019 $ 73,074 2020 30,953 2021 5,814 2022 153,210 2023 267,580 Thereafter 110,000 Total $ 640,631 |
SUBORDINATED DEBT (Tables)
SUBORDINATED DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUBORDINATED DEBT | |
Schedule of summary of company's subordinated debt | (dollars in thousands) 2018 2017 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 $ 39,871 $ 39,800 Subordinated debt issued June 2015 – fixed interest rate of 6.50%, $15,000 maturing June 18, 2025 14,831 14,805 Subordinated debt issued October 2017 - fixed interest rate of 6.25% for the first five years through October 2022 and a variable interest rate equivalent to three month LIBOR plus 4.23% thereafter, $40,000 maturing October 15, 2027 39,432 39,367 Total subordinated debt $ 94,134 $ 93,972 |
TRUST PREFERRED DEBENTURES (Tab
TRUST PREFERRED DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
TRUST PREFERRED DEBENTURES | |
Summary of trust preferred debentures | (dollars in thousands) 2018 2017 Midland States Preferred Securities Trust – variable interest rate equal to LIBOR plus 2.75%, which was 5.23% and 4.11% at December 31, 2018 and 2017, respectively – $10,310 maturing April 23, 2034 $ 10,272 $ 10,269 Grant Park Statutory Trust I – variable interest rate equal to LIBOR plus 2.85%, which was 5.37% and 4.23%, at December 31, 2018 and 2017, respectively – $3,093 maturing January 23, 2034 2,209 2,151 Love Savings/Heartland Capital Trust III – variable interest rate equal to LIBOR plus 1.75%, which was 4.54% and 3.34% at December 31, 2018 and 2017, respectively – $20,619 maturing December 31, 2036 14,074 13,911 Love Savings/Heartland Capital Trust IV – variable interest rate equal to LIBOR plus 1.47%, which was 4.21% and 2.98% at December 31, 2018 and 2017, respectively – $20,619 maturing September 6, 2037 13,249 13,084 Centrue Statutory Trust II - variable interest rate equal to LIBOR plus 2.65%, which was 5.44% and 4.25% at December 31, 2018 and 2017, respectively - $10,310 maturing June 17, 2034 7,990 7,915 Total trust preferred debentures $ 47,794 $ 47,330 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAXES | |
Schedule of components of income taxes | (dollars in thousands) 2018 2017 2016 Federal: Current $ 55 $ (696) $ 1,718 Deferred 6,748 11,632 11,381 State: Current 807 (921) 2,630 Deferred 3,774 400 3,160 Total income tax expense $ 11,384 $ 10,415 $ 18,889 |
Schedule of reconciliation of income tax expense | (dollars in thousands) 2018 2017 2016 Expected income taxes $ 10,665 $ 9,244 $ 17,648 Less income tax effect of: Tax exempt interest, net (1,441) (1,635) (1,637) State tax, net of federal benefit 4,028 (110) 3,132 Increase in cash surrender value of life insurance policies (854) (969) (1,007) Equity-based compensation benefit (62) (1,297) (366) Non-deductible transaction costs 71 389 — Valuation allowance (409) (229) 631 Effect of federal rate change enacted in 2017 — 4,540 — Other (614) 482 488 Actual income tax expense $ 11,384 $ 10,415 $ 18,889 |
Schedule of deferred tax assets, net | (dollars in thousands) 2018 2017 Assets: Allowance for loan losses $ 5,748 $ 4,405 Deferred compensation 2,158 1,896 Loans 6,579 3,896 Write-down of other real estate owned 563 776 Tax credits 1,041 1,501 Nonaccrual interest 730 708 Unrealized loss on securities 802 — Stock compensation 700 907 Deferred loan fees, net of costs — 133 Net operating losses 17,417 20,097 Accrued litigation 179 101 Allowance for repurchase reserves 135 100 Allowance for unfunded commitments 319 180 Fair value adjustment on investments 1,330 — Charitable contributions 202 58 Other, net 720 324 Deferred tax assets 38,623 35,082 Valuation allowance — (409) Deferred tax assets, net of valuation allowance 38,623 34,673 Liabilities: Premises and equipment 3,522 1,657 Unrealized gain on securities — 412 Mortgage servicing rights 11,460 11,424 Fair value adjustment on trust preferred debentures 4,694 4,700 Federal Home Loan Bank stock dividends 391 310 Deferred loan costs, net of fees 1,495 — Intangible assets 8,741 2,729 Accounting method changes 74 399 Prepaid expenses 708 796 Software development costs 1,667 — Leased equipment 4,351 — Other, net 269 222 Deferred tax liabilities 37,372 22,649 Deferred tax assets, net $ 1,251 $ 12,024 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
STOCK BASED COMPENSATION | |
Schedule of fair value of each grant which is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions | 2017 2016 Dividend yield 2.50 % 3.00 % Expected volatility 16.63 16.98 Risk free interest rate 2.12 1.64 Expected life 6.25 years 6.25 years |
Summary of our stock option plan and changes made | 2018 2017 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 1,148,537 $ 19.39 1,319,259 $ 18.73 Options granted — — 31,259 32.89 Options exercised (108,344) 16.42 (179,760) 16.02 Options forfeited (34,049) 26.27 (22,221) 26.08 Options outstanding, end of year 1,006,144 $ 19.48 4.9 years 1,148,537 $ 19.39 5.8 years Options exercisable 885,817 $ 18.53 4.6 years 673,706 $ 17.55 4.6 years Options vested and expected to vest 991,774 $ 19.38 4.9 years 1,088,853 $ 19.27 5.7 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, 2017 474,831 $ 2.83 Granted — — Vested (324,508) 2.72 Forfeited (29,996) 2.91 Nonvested at December 31, 2018 120,327 $ 3.11 |
Summary of the activity for restricted stock awards | Weighted average Number grant date outstanding fair value Nonvested at December 31, 2017 149,368 $ 28.83 Granted during the year 138,683 28.47 Vested during the year (56,907) 27.95 Forfeited during the year (33,427) 30.17 Nonvested at December 31, 2018 197,717 $ 28.61 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | (dollars in thousands, except per share data) 2018 2017 2016 Net income $ 39,421 $ 16,056 $ 31,542 Preferred stock dividends (330) (184) — Preferred stock, premium amortization 189 101 — Net income available to common shareholders equity 39,280 15,973 31,542 Common shareholder dividends (19,838) (13,922) (9,797) Unvested restricted stock award dividends (139) (86) (56) Undistributed earnings to unvested restricted stock awards (123) (11) (110) Undistributed earnings to common shareholders $ 19,180 $ 1,954 $ 21,579 Basic Distributed earnings to common shareholders $ 19,838 $ 13,922 $ 9,797 Undistributed earnings to common shareholders 19,180 1,954 21,579 Total common shareholders earnings, basic $ 39,018 $ 15,876 $ 31,376 Diluted Distributed earnings to common shareholders $ 19,838 $ 13,922 $ 9,797 Undistributed earnings to common shareholders 19,180 1,954 21,579 Total common shareholders earnings 39,018 15,876 31,376 Add back: Undistributed earnings reallocated from unvested restricted stock awards 2 — 2 Total common shareholders earnings, diluted $ 39,020 $ 15,876 $ 31,378 Weighted average common shares outstanding, basic 23,130,475 17,781,631 14,130,552 Options and warrants 418,550 501,583 298,287 Weighted average common shares outstanding, diluted 23,549,025 18,283,214 14,428,839 Basic earnings per common share $ 1.69 $ 0.89 $ 2.22 Diluted earnings per common share 1.66 0.87 2.17 |
CAPITAL REQUIREMENTS (Tables)
CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CAPITAL REQUIREMENTS | |
Schedule of actual and required capital amounts and ratios | 2018 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ 584,409 12.79 % $ 365,547 8.00 % N/A N/A Midland States Bank 583,465 12.76 365,894 8.00 $ 457,368 10.00 % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 468,212 10.25 274,160 6.00 N/A N/A Midland States Bank 561,402 12.27 274,421 6.00 365,894 8.00 Common equity tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 400,480 8.76 205,620 4.50 N/A N/A Midland States Bank 561,402 12.27 205,815 4.50 297,289 6.50 Tier 1 leverage (to average assets): Midland States Bancorp, Inc. 468,212 8.53 219,602 4.00 N/A N/A Midland States Bank 561,402 10.22 219,622 4.00 274,528 5.00 2017 Required to be Minimum Required Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Requirements (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total capital (to risk-weighted assets): Midland States Bancorp, Inc. $ 478,914 13.26 % $ 288,895 8.00 % N/A N/A Midland States Bank 445,285 12.32 289,252 8.00 $ 361,565 10.00 % Tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 367,841 10.19 216,671 6.00 N/A N/A Midland States Bank 428,184 11.84 216,939 6.00 289,252 8.00 Common equity tier 1 capital (to risk-weighted assets): Midland States Bancorp, Inc. 304,974 8.45 162,503 4.50 N/A N/A Midland States Bank 428,184 11.84 162,704 4.50 235,017 6.50 Tier 1 leverage (to average assets): Midland States Bancorp, Inc. 367,841 8.63 170,566 4.00 N/A N/A Midland States Bank 428,184 10.04 170,608 4.00 213,260 5.00 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of assets and liabilities measured and recorded at fair value | 2018 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. Treasury securities $ 24,650 $ 24,650 $ — $ — Government sponsored entity debt securities 75,684 — 75,684 — Agency mortgage-backed securities 326,305 — 326,305 — State and municipal securities 159,262 — 159,262 — Corporate securities 71,550 — 69,627 1,923 Equity securities 3,334 — 3,334 — Loans held for sale 30,401 — 30,401 — Interest rate lock commitments 4,492 — 4,492 — Interest rate swap contracts 145 — 145 — Total $ 695,823 $ 24,650 $ 669,250 $ 1,923 Liabilities Interest rate swap contracts $ 145 $ — $ 145 $ — Assets measured at fair value on a non-recurring basis: Mortgage servicing rights $ 53,447 $ — $ — $ 53,447 Mortgage servicing rights held for sale 3,545 3,545 — — Impaired loans 11,238 — 9,226 2,012 Other real estate owned 1,439 — 1,439 — Assets held for sale 1,687 — 1,687 — 2017 Quoted prices in active Significant markets other Significant for identical observable unobservable assets inputs inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. Treasury securities $ 27,718 $ 27,718 $ — $ — Government sponsored entity debt securities 25,211 — 25,211 — Agency mortgage-backed securities 232,387 — 232,387 — State and municipal securities 102,567 — 102,567 — Corporate securities 59,812 — 55,033 4,779 Equity Securities 2,830 — 2,830 — Loans held for sale 50,089 — 50,089 — Interest rate lock commitments 6,331 — 6,331 — Forward commitments to sell mortgage-backed securities 31 — 31 — Interest rate swap contracts 17 — 17 — Total $ 506,993 $ 27,718 $ 474,496 $ 4,779 Liabilities Interest rate swap contracts 17 — $ 17 $ — Assets measured at fair value on a non-recurring basis: Mortgage servicing rights $ 56,352 $ — $ — $ 56,352 Mortgage servicing rights held for sale 10,176 10,176 — — Impaired loans 9,385 — 7,631 1,754 Other real estate owned 801 — 801 — Assets held for sale 3,358 — 3,358 — |
Schedule of losses recognized on assets measured on a non-recurring basis | (dollars in thousands) 2018 2017 2016 Mortgage servicing rights $ — $ 2,324 $ 3,135 Mortgage servicing rights held for sale 458 4,059 — Impaired loans 5,800 7,096 2,459 Other real estate owned 301 253 247 Assets held for sale — 1,516 1,646 Total loss on assets measured on a nonrecurring basis $ 6,559 $ 15,248 $ 7,487 |
Schedule presenting activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | 2018 2017 Non-Agency Corporate Corporate Mortgage-Backed (dollars in thousands) Securities Securities Securities Balance, beginning of period $ 4,779 $ 7,480 $ 1 Total realized in earnings (1) 242 289 — Total unrealized in other comprehensive income (36) 264 — Net settlements (principal and interest) (3,062) (3,254) (1) Balance, end of period $ 1,923 $ 4,779 $ — (1) Amounts included in interest income from investment securities taxable in the consolidated statements of income. |
Schedule presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) | Non-recurring Fair Value Valuation Unobservable fair value measurements (dollars in thousands) technique input / assumptions Range (weighted average) Mortgage servicing rights $ 53,447 Discounted cash flow Prepayment speed 8.00% - 18.00% (8.24%) Discount rate 10.00% - 27.00% (11.12%) Impaired loans $ 2,012 Fair value of collateral Discount for type of property, 5.00% - 7.26% (5.26%) age of appraisal and current status The following table presents quantitative information about significant unobservable inputs used in fair value measurements of non-recurring assets (Level 3) at December 31, 2017: Non-recurring Fair Value Valuation Unobservable fair value measurements (dollars in thousands) technique input / assumptions Range (weighted average) Mortgage servicing rights $ 56,352 Discounted cash flow Prepayment speed 6.36% - 42.90% (8.83%) Discount rate 8.00% - 14.50% (11.18%) Impaired loans $ 1,754 Fair value of collateral Discount for type of property, 4.84% - 18.24% (8.64%) age of appraisal and current status |
Schedule of the fair value option for newly originated residential and commercial loans held for sale | 2018 2017 Aggregate Contractual Aggregate Contractual (dollars in thousands) fair value Difference principal fair value Difference principal Residential loans held for sale $ 8,121 $ 484 $ 7,637 $ 12,241 $ 374 $ 11,867 Commercial loans held for sale 22,280 595 21,685 37,846 343 37,503 Total loans held for sale $ 30,401 $ 1,079 $ 29,322 $ 50,087 $ 717 $ 49,370 The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2018 and 2017: (dollars in thousands) 2018 2017 Residential loans held for sale $ 6 $ (74) Commercial loans held for sale 252 (650) Total loans held for sale $ 258 $ (724) |
Schedule presentation of summary of the carrying values and fair value estimates of certain financial instruments | 2018 Quoted prices in active Significant markets other Significant for identical observable unobservable Carrying assets inputs inputs (dollars in thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ 210,780 $ 210,780 $ 210,780 $ — $ — Federal funds sold 2,920 2,920 2,920 — — Investment securities available for sale 660,785 660,785 24,650 634,212 1,923 Nonmarketable equity securities 42,472 42,472 — 42,472 — Loans, net 4,116,648 4,091,438 — — 4,091,438 Loans held for sale 30,401 30,401 — 30,401 — Accrued interest receivable 16,560 16,560 — 16,560 — Interest rate lock commitments 4,492 4,492 — 4,492 — Interest rate swap contracts 145 145 — 145 — Liabilities Deposits $ 4,074,170 $ 4,069,098 $ — $ 4,069,098 $ — Short-term borrowings 124,235 124,235 — 124,235 — FHLB and other borrowings 640,631 641,050 — 641,050 — Subordinated debt 94,134 91,926 — 91,926 — Trust preferred debentures 47,794 56,805 — 56,805 — Accrued interest payable 4,855 4,855 — 4,855 — Interest rate swap contracts 145 145 — 145 — 2017 Quoted prices in active Significant markets other Significant for identical observable unobservable Carrying assets inputs inputs (dollars in thousands) Amount Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and due from banks $ 214,519 $ 214,519 $ 214,519 $ — $ — Federal funds sold 683 683 683 — — Investment securities available for sale 450,525 450,525 27,718 418,028 4,779 Nonmarketable equity securities 34,796 34,796 — 34,796 — Loans, net 3,210,247 3,200,016 — — 3,200,016 Loans held for sale 50,089 50,089 — 50,089 — Accrued interest receivable 11,715 11,715 — 11,715 — Interest rate lock commitments 6,331 6,331 — 6,331 — Forward commitments to sell mortgage-backed securities 31 31 — 31 — Interest rate swap contracts 17 17 — 17 — Liabilities Deposits $ 3,131,089 $ 3,127,626 $ — $ 3,127,626 $ — Short-term borrowings 156,126 156,126 — 156,126 — FHLB and other borrowings 496,436 494,634 — 494,634 — Subordinated debt 93,972 90,860 — 90,860 — Trust preferred debentures 45,379 46,069 — 46,069 — Accrued interest payable 2,531 2,531 — 2,531 — Interest rate swap contracts 17 17 — 17 — |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS, CONTINGENCIES AND CREDIT RISK | |
Projected minimum rental payments under leases | (dollars in thousands) Amount Year ending December 31: 2019 $ 2,878 2020 2,361 2021 2,193 2022 1,955 2023 1,397 Thereafter 2,249 Total estimated lease payments $ 13,033 |
Schedule of loan commitments | (dollars in thousands) 2018 2017 Commitments to extend credit $ 663,555 $ 568,356 Financial guarantees – standby letters of credit 142,859 142,189 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
Schedule of segment financial information | Commercial FHA Origination and Wealth (dollars in thousands) Banking Servicing Management Other Total December 31, 2018 Net interest income (expense) $ 190,883 $ (422) $ 298 $ (10,672) $ 180,087 Provision for loan losses 9,430 — — — 9,430 Noninterest income 40,313 11,457 20,484 (463) 71,791 Noninterest expense 165,744 15,058 11,680 (839) 191,643 Income (loss) before income taxes (benefit) 56,022 (4,023) 9,102 (10,296) 50,805 Income taxes (benefit) 14,154 (979) 514 (2,305) 11,384 Net income (loss) $ 41,868 $ (3,044) $ 8,588 $ (7,991) $ 39,421 Total assets $ 5,571,752 $ 91,108 $ 18,218 $ (43,405) $ 5,637,673 December 31, 2017 Net interest income (expense) $ 135,974 $ 312 $ 524 $ (7,148) $ 129,662 Provision for loan losses 9,556 — — — 9,556 Noninterest income 27,955 18,570 13,339 (502) 59,362 Noninterest expense 129,626 13,729 8,823 819 152,997 Income (loss) before income taxes (benefit) 24,747 5,153 5,040 (8,469) 26,471 Income taxes (benefit) 17,102 (1,033) 423 (6,077) 10,415 Net income (loss) $ 7,645 $ 6,186 $ 4,617 $ (2,392) $ 16,056 Total assets $ 4,336,301 $ 99,685 $ 15,979 $ (39,264) $ 4,412,701 December 31, 2016 Net interest income (expense) $ 109,950 $ 1,003 $ — $ (5,699) $ 105,254 Provision for loan losses 5,591 — — — 5,591 Noninterest income 41,055 22,979 8,073 (50) 72,057 Noninterest expense 99,003 15,104 6,533 649 121,289 Income (loss) before income taxes (benefit) 46,411 8,878 1,540 (6,398) 50,431 Income taxes (benefit) 17,129 3,332 115 (1,687) 18,889 Net income (loss) $ 29,282 $ 5,546 $ 1,425 $ (4,711) $ 31,542 Total assets $ 3,170,630 $ 129,943 $ 5,550 $ (72,400) $ 3,233,723 |
REVENUE FROM CONTRACT WITH CU_2
REVENUE FROM CONTRACT WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from contract with customers | |
Summary of noninterest income, segregated by revenue | (dollars in thousands) 2018 2017 2016 Noninterest income - in-scope of Topic 606 Wealth management revenue: Trust management/administration fees $ 16,099 $ 9,751 $ 5,985 Investment advisory fees 2,041 1,364 — Investment brokerage fees 1,065 1,388 1,324 Other 1,308 837 782 Service charges on deposit accounts: Nonsufficient fund fees 7,672 4,193 2,562 Other 2,768 1,782 1,342 Interchange revenues 10,674 5,353 3,750 Other income: Merchant services revenue 1,650 1,103 1,697 Other 2,935 1,869 1,815 Noninterest income - out-of-scope of Topic 606 25,579 31,722 52,800 Total noninterest income $ 71,791 $ 59,362 $ 72,057 |
PARENT COMPANY ONLY FINANCIAL_2
PARENT COMPANY ONLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PARENT COMPANY ONLY FINANCIAL INFORMATION | |
Schedule of condensed balance sheets | Condensed Balance Sheets (dollars in thousands) December 31, 2018 2017 Assets: Cash $ 20,312 $ 60,424 Investment in common stock of subsidiaries 764,483 563,541 Accrued income taxes receivable — 3,300 Other assets 2,330 2,303 Total assets $ 787,125 $ 629,568 Liabilities: Subordinated debt $ 94,134 $ 93,972 Trust preferred debentures 47,794 47,330 Other borrowings 33,021 37,294 Accrued income taxes payable 778 — Deferred tax liabilities, net 972 252 Other liabilities 1,901 1,175 Total liabilities 178,600 180,023 Shareholders’ equity 608,525 449,545 Total liabilities and shareholders’ equity $ 787,125 $ 629,568 |
Schedule of condensed Statement of income | Condensed Statements of Income (dollars in thousands) Years ended December 31, 2018 2017 2016 Dividends from subsidiaries $ 17,000 $ 19,500 $ — Other income 6 4 428 Interest expense (10,714) (7,162) (5,699) Other expense (1,180) (1,295) (1,130) Income (loss) before income tax benefit and equity in undistributed income (loss) of subsidiaries 5,112 11,047 (6,401) Income tax benefit 2,312 6,080 1,687 Income (loss) before equity in undistributed income (loss) of subsidiaries 7,424 17,127 (4,714) Equity in undistributed income (loss) of subsidiaries 31,997 (1,071) 36,256 Net income $ 39,421 $ 16,056 $ 31,542 |
Schedule of condensed cash flows | Condensed Statements of Cash Flows (dollars in thousands) Years ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 39,421 $ 16,056 $ 31,542 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed (income) loss of subsidiaries (31,997) 1,071 (36,256) Amortization of restricted stock awards 1,199 836 555 Compensation expense for stock option grants 334 548 492 Change in other assets 3,273 (3,226) 4,237 Change in other liabilities 2,863 1,649 225 Net cash provided by operating activities 15,093 16,934 795 Cash flows from investing activities: Net cash paid in acquisition (32,890) (60,457) — Capital injection to subsidiaries — (350) (25,250) Net cash used in investing activities (32,890) (60,807) (25,250) Cash flows from financing activities: Payment made on subordinated debt — — (8,000) Proceeds from issuance of subordinated debt, net of issuance costs — 39,354 — Proceeds from other borrowings, net of issuance costs — 39,964 — Payments made on other borrowings (4,286) (2,857) — Cash dividends paid on preferred stock (330) (184) (9,853) Cash dividends paid on common stock (19,977) (14,008) — Proceeds from issuance of common stock in initial public offering, net of issuance costs — — 71,475 Proceeds from issuance of common stock under employee benefit plans 2,278 3,225 1,318 Net cash (used in) provided by financing activities (22,315) 65,494 54,940 Net (decrease) increase in cash (40,112) 21,621 30,485 Cash: Beginning of year 60,424 38,803 8,318 End of year $ 20,312 $ 60,424 $ 38,803 |
QUARTERLY CONDENSED FINANCIAL_2
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) | |
Schedule of unaudited quarterly condensed financial information | 2018 Quarter Ended (dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 46,505 $ 58,283 $ 56,987 $ 61,592 Interest expense 8,320 9,997 11,906 13,057 Net interest income 38,185 48,286 45,081 48,535 Provision for loan losses 2,006 1,854 2,103 3,467 Net interest income after provision for loan losses 36,179 46,432 42,978 45,068 Noninterest income 16,502 15,847 18,272 21,170 Noninterest expense 49,499 46,452 50,317 45,375 Income before income taxes 3,182 15,827 10,933 20,863 Income taxes 1,376 3,045 2,436 4,527 Net income 1,806 12,782 8,497 16,336 Preferred stock dividends 36 36 35 34 Net income available to common shareholders $ 1,770 $ 12,746 $ 8,462 $ 16,302 Per common share data: Basic earnings per common share $ 0.08 $ 0.53 $ 0.35 $ 0.68 Diluted earnings per common share 0.08 0.52 0.35 0.67 2017 Quarter Ended (dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 31,839 $ 34,528 $ 43,246 $ 43,500 Interest expense 4,378 5,128 6,481 7,464 Net interest income 27,461 29,400 36,765 36,036 Provision for loan losses 1,533 458 1,489 6,076 Net interest income after provision for loan losses 25,928 28,942 35,276 29,960 Noninterest income 16,342 13,619 15,403 13,998 Noninterest expense 30,797 37,645 48,363 36,192 Income before income taxes 11,473 4,916 2,316 7,766 Income taxes 2,983 1,377 280 5,775 Net income $ 8,490 $ 3,539 $ 2,036 $ 1,991 Per common share data: Basic earnings per common share $ 0.54 $ 0.21 $ 0.10 $ 0.10 Diluted earnings per common share 0.52 0.20 0.10 0.10 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | |
Indemnification Asset Due from FDIC | |||
Liabilities for unfunded commitments | $ 1,200,000 | $ 670,000 | |
Impact of Recently Issued Accounting Standards | |||
Effective income tax rate | 21.00% | 35.00% | |
Forecast | ASU 2016-02 | |||
Impact of Recently Issued Accounting Standards | |||
Increase in assets and liabilities | $ 12,100,000 | ||
Minimum | |||
Lease Financing | |||
Percentage of residual value | 3 | ||
Goodwill and Intangible Assets | |||
Other intangible assets amortized over a period | 1 year | ||
Maximum | |||
Lease Financing | |||
Percentage of residual value | 15 | ||
Goodwill and Intangible Assets | |||
Other intangible assets amortized over a period | 20 years | ||
Premises | Minimum | |||
Premises and Equipment | |||
Estimated useful lives | 10 years | ||
Premises | Maximum | |||
Premises and Equipment | |||
Estimated useful lives | 40 years | ||
Furniture and equipment | Minimum | |||
Premises and Equipment | |||
Estimated useful lives | 3 years | ||
Furniture and equipment | Maximum | |||
Premises and Equipment | |||
Estimated useful lives | 10 years |
ACQUISITIONS - Alpine (Details)
ACQUISITIONS - Alpine (Details) | Jun. 30, 2018USD ($) | Feb. 28, 2018USD ($)itemshares | Jun. 09, 2017USD ($)itemshares | Jun. 09, 2016 | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares |
Liabilities assumed: | |||||||
Goodwill | $ 164,673,000 | $ 98,624,000 | |||||
Alpine Bank | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||
Number of service banking centers acquired | item | 19 | ||||||
Total consideration | $ 173,200,000 | ||||||
Cash transferred | $ 33,300,000 | ||||||
Shares issued | shares | 4,463,200 | ||||||
Transaction and integration costs | $ 22,400,000 | ||||||
Measurement period adjustment increase in goodwill | $ 629,000 | ||||||
Assets acquired: | |||||||
Cash and cash equivalents | $ 69,459,000 | ||||||
Investment securities available for sale | 293,428,000 | ||||||
Equity securities | 8,372,000 | ||||||
Loans | 786,186,000 | ||||||
Loans held for sale | 3,416,000 | ||||||
Premises and equipment | 18,126,000 | ||||||
Other real estate owned | 53,000 | ||||||
Nonmarketable equity securities | 2,038,000 | ||||||
Accrued interest receivable | 4,414,000 | ||||||
Mortgage servicing rights held for sale | 3,068,000 | ||||||
Intangible assets | 27,400,000 | ||||||
Cash surrender value of life insurance policies | 22,578,000 | ||||||
Other assets | 4,770,000 | ||||||
Total assets acquired | 1,243,308,000 | ||||||
Liabilities assumed: | |||||||
Deposits | 1,111,130,000 | ||||||
FHLB advances and other borrowings | 18,127,000 | ||||||
Accrued interest payable | 539,000 | ||||||
Deferred tax liabilities, net | 1,749,000 | ||||||
Other liabilities | 4,500,000 | ||||||
Total liabilities assumed | 1,136,045,000 | ||||||
Net assets acquired | 107,263,000 | ||||||
Goodwill | 65,964,000 | ||||||
Total consideration paid | 173,227,000 | ||||||
Business Acquisition, Pro Forma Information | |||||||
Revenue (1) | 264,670,000 | 280,538,000 | |||||
Net income | $ 42,261,000 | $ 31,188,000 | |||||
Diluted earnings per common share | $ / shares | $ 1.73 | $ 1.28 | |||||
Intangible assets: | |||||||
Total intangible assets | 27,400,000 | ||||||
Alpine Bank | Core deposits | |||||||
Intangible assets: | |||||||
Total intangible assets | 21,100,000 | $ 21,100,000 | |||||
Estimated useful lives: | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | ||||||
Alpine Bank | Customer relationship | |||||||
Intangible assets: | |||||||
Total intangible assets | 6,300,000 | $ 6,300,000 | |||||
Estimated useful lives: | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | ||||||
Centrue | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||
Number of service banking centers acquired | item | 20 | ||||||
Total consideration | $ 176,600,000 | ||||||
Cash transferred | 61,000,000 | ||||||
Transaction and integration costs | $ 17,900,000 | $ 21,500,000 | |||||
Assets acquired: | |||||||
Cash and cash equivalents | 42,461,000 | ||||||
Investment securities available for sale | 149,013,000 | ||||||
Loans | 679,582,000 | ||||||
Loans held for sale | 531,000 | ||||||
Premises and equipment | 17,147,000 | ||||||
Other real estate owned | 4,983,000 | ||||||
Nonmarketable equity securities | 8,168,000 | ||||||
Accrued interest receivable | 2,376,000 | ||||||
Mortgage servicing rights | 1,933,000 | ||||||
Intangible assets | 11,070,000 | ||||||
Cash surrender value of life insurance policies | 36,349,000 | ||||||
Deferred tax assets, net | 34,339,000 | ||||||
Other assets | 2,256,000 | ||||||
Total assets acquired | 990,208,000 | ||||||
Liabilities assumed: | |||||||
Deposits | 739,867,000 | ||||||
Short-term borrowings | 14,434,000 | ||||||
FHLB advances and other borrowings | 95,332,000 | ||||||
Trust preferred debentures | 7,565,000 | ||||||
Accrued interest payable | 275,000 | ||||||
Other liabilities | 3,600,000 | ||||||
Total liabilities assumed | 861,073,000 | ||||||
Net assets acquired | 129,135,000 | ||||||
Goodwill | 47,444,000 | ||||||
Total consideration paid | 176,579,000 | ||||||
Intangible assets: | |||||||
Total intangible assets | 11,070,000 | ||||||
Centrue | Core deposits | |||||||
Intangible assets: | |||||||
Total intangible assets | 11,070,000 | ||||||
Estimated useful lives: | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years | ||||||
Centrue | Common stock | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||
Shares issued | shares | 3,219,238 | ||||||
Centrue | Series G Preferred Stock | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||
Shares issued | shares | 181 | ||||||
Centrue | Series H Preferred Stock | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||
Shares issued | shares | 2,635.5462 | ||||||
Acquired receivables subject to ASC 310-30 | Alpine Bank | |||||||
Acquired loan data | |||||||
Fair value of acquired loans at acquisition date | $ 34,993,000 | ||||||
Gross contractual amounts receivable at acquisition date | 50,342,000 | ||||||
Best estimate at acquisition date of contractual cash flows not expected to be collected | 9,254,000 | ||||||
Acquired receivables subject to ASC 310-30 | Centrue | |||||||
Acquired loan data | |||||||
Fair value of acquired loans at acquisition date | 11,381,000 | ||||||
Gross contractual amounts receivable at acquisition date | 20,253,000 | ||||||
Best estimate at acquisition date of contractual cash flows not expected to be collected | 7,227,000 | ||||||
Acquired receivables not subject to ASC 310-30 [member] | Alpine Bank | |||||||
Acquired loan data | |||||||
Fair value of acquired loans at acquisition date | 751,193,000 | ||||||
Gross contractual amounts receivable at acquisition date | 774,836,000 | ||||||
Best estimate at acquisition date of contractual cash flows not expected to be collected | $ 4,244,000 | ||||||
Acquired receivables not subject to ASC 310-30 [member] | Centrue | |||||||
Acquired loan data | |||||||
Fair value of acquired loans at acquisition date | 668,201,000 | ||||||
Gross contractual amounts receivable at acquisition date | 821,338,000 | ||||||
Best estimate at acquisition date of contractual cash flows not expected to be collected | $ 4,835,000 |
ACQUISITIONS - CedarPoint (Deta
ACQUISITIONS - CedarPoint (Details) - USD ($) $ in Thousands | Mar. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition | |||
Goodwill | $ 164,673 | $ 98,624 | |
CedarPoint | |||
Business Acquisition | |||
Assets under administration | $ 180,000 | ||
Total consideration | 3,700 | ||
Consideration transferred, value of shares | 18 | ||
Additional consideration as accrual in other liabilities | 345 | ||
Goodwill | 2,400 | ||
CedarPoint | Customer relationship | |||
Business Acquisition | |||
Intangible assets | $ 2,000 | ||
Finite-Lived Intangible Assets, Remaining Amortization Period | 12 years | ||
Common stock | CedarPoint | Customer relationship | |||
Business Acquisition | |||
Share consideration | 102,000 |
ACQUISITIONS - Sterling (Detail
ACQUISITIONS - Sterling (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition | ||
Goodwill | $ 164,673 | $ 98,624 |
CASH AND DUE FROM BANKS (Detail
CASH AND DUE FROM BANKS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
CASH AND DUE FROM BANKS | ||
Required Cash Reserve | $ 33.6 | $ 25 |
INVESTMENT SECURITIES - Classif
INVESTMENT SECURITIES - Classified (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Available for sale securities | |||
Amortized cost | $ 660,359,000 | $ 448,124,000 | |
Gross unrealized gains | 4,053,000 | 5,782,000 | |
Gross unrealized losses | 6,961,000 | 3,381,000 | |
Investment securities available for sale | 657,451,000 | 450,525,000 | |
Equity securities | 3,334,000 | ||
Gross realized gains | 542,000 | 242,000 | $ 15,500,000 |
Held to maturity securities transferred to security at amortized cost | 64,500,000 | ||
Held-to-maturity securities, transferred to available for sale, at fair value | 67,900,000 | ||
Other Comprehensive Income (Loss), Transfers from Held-to-maturity to Available-for-Sale Securities, before Tax | 3,366,000 | ||
U.S. Treasury securities | |||
Available for sale securities | |||
Amortized cost | 25,018,000 | 28,005,000 | |
Gross unrealized losses | 368,000 | 287,000 | |
Investment securities available for sale | 24,650,000 | 27,718,000 | |
Government sponsored entity debt securities | |||
Available for sale securities | |||
Amortized cost | 76,554,000 | 25,445,000 | |
Gross unrealized gains | 17,000 | 41,000 | |
Gross unrealized losses | 887,000 | 275,000 | |
Investment securities available for sale | 75,684,000 | 25,211,000 | |
Agency mortgage-backed securities | |||
Available for sale securities | |||
Amortized cost | 329,690,000 | 233,606,000 | |
Gross unrealized gains | 371,000 | 882,000 | |
Gross unrealized losses | 3,756,000 | 2,101,000 | |
Investment securities available for sale | 326,305,000 | 232,387,000 | |
State and municipal securities | |||
Available for sale securities | |||
Amortized cost | 156,795,000 | 99,449,000 | |
Gross unrealized gains | 3,282,000 | 3,632,000 | |
Gross unrealized losses | 815,000 | 514,000 | |
Investment securities available for sale | 159,262,000 | 102,567,000 | |
Corporate Securities | |||
Available for sale securities | |||
Amortized cost | 72,302,000 | 58,904,000 | |
Gross unrealized gains | 383,000 | 1,087,000 | |
Gross unrealized losses | 1,135,000 | 179,000 | |
Investment securities available for sale | 71,550,000 | 59,812,000 | |
Equity Security | |||
Available for sale securities | |||
Amortized cost | 2,715,000 | ||
Gross unrealized gains | 140,000 | ||
Gross unrealized losses | 25,000 | ||
Investment securities available for sale | $ 3,334,000 | $ 2,830,000 |
INVESTMENT SECURITIES - Continu
INVESTMENT SECURITIES - Continuous unrealized loss position (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | |
Securities available for sale: | |||
Less than 12 Months, Fair value | $ 244,251,000 | $ 205,976,000 | |
Less than 12 Months, Unrealized loss | 1,445,000 | 2,467,000 | |
12 Months or more, Fair value | 205,649,000 | 36,842,000 | |
12 Months or more, Unrealized loss | 5,516,000 | 914,000 | |
Total, Fair value | 449,900,000 | 242,818,000 | |
Total, Unrealized loss | $ 6,961,000 | $ 3,381,000 | |
Unrealized loss | |||
Debt Securities Available For Sale Unrealized Loss Position Number Of Positions | item | 291 | 173 | |
Aggregate depreciation | 1.52% | 1.37% | |
Other than temporary impairment: | |||
Other than temporary impairment, recognized as losses | $ 0 | $ 0 | |
U.S. Treasury securities | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 5,012,000 | 19,758,000 | |
Less than 12 Months, Unrealized loss | 1,000 | 251,000 | |
12 Months or more, Fair value | 19,638,000 | 7,960,000 | |
12 Months or more, Unrealized loss | 367,000 | 36,000 | |
Total, Fair value | 24,650,000 | 27,718,000 | |
Total, Unrealized loss | 368,000 | 287,000 | |
Government sponsored entity debt securities | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 51,717,000 | 24,168,000 | |
Less than 12 Months, Unrealized loss | 195,000 | 275,000 | |
12 Months or more, Fair value | 23,223,000 | ||
12 Months or more, Unrealized loss | 692,000 | ||
Total, Fair value | 74,940,000 | 24,168,000 | |
Total, Unrealized loss | 887,000 | 275,000 | |
Agency mortgage-backed securities | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 139,115,000 | 124,192,000 | |
Less than 12 Months, Unrealized loss | 528,000 | 1,500,000 | |
12 Months or more, Fair value | 126,561,000 | 19,530,000 | |
12 Months or more, Unrealized loss | 3,228,000 | 601,000 | |
Total, Fair value | 265,676,000 | 143,722,000 | |
Total, Unrealized loss | 3,756,000 | 2,101,000 | |
State and municipal securities | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 15,791,000 | 29,338,000 | |
Less than 12 Months, Unrealized loss | 146,000 | 331,000 | |
12 Months or more, Fair value | 27,692,000 | 5,889,000 | |
12 Months or more, Unrealized loss | 669,000 | 183,000 | |
Total, Fair value | 43,483,000 | 35,227,000 | |
Total, Unrealized loss | 815,000 | 514,000 | |
Corporate Securities | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 32,616,000 | 5,917,000 | |
Less than 12 Months, Unrealized loss | 575,000 | 85,000 | |
12 Months or more, Fair value | 8,535,000 | 3,463,000 | |
12 Months or more, Unrealized loss | 560,000 | 94,000 | |
Total, Fair value | 41,151,000 | 9,380,000 | |
Total, Unrealized loss | $ 1,135,000 | 179,000 | |
Equity Security | |||
Securities available for sale: | |||
Less than 12 Months, Fair value | 2,603,000 | ||
Less than 12 Months, Unrealized loss | 25,000 | ||
Total, Fair value | 2,603,000 | ||
Total, Unrealized loss | $ 25,000 | ||
Non-agency mortgage-backed securities | |||
Other than temporary impairment: | |||
Number of other than temporary impairment securities | item | 3 | ||
Other than temporary impairment, recognized as losses | $ 824,000 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized cost and fair value (Details) - USD ($) | Oct. 04, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized cost of available-for-sale securities, by contractual maturity | ||||
Within one year | $ 39,092,000 | |||
After one year through five years | 122,564,000 | |||
After five years through ten years | 138,494,000 | |||
After ten years | 30,519,000 | |||
Total, single maturity date | 660,359,000 | |||
Fair Value of available-for-sale securities, by contractual maturity | ||||
Within one year | 39,087,000 | |||
After one year through five years | 122,554,000 | |||
After five years through ten years | 138,937,000 | |||
After ten years | 30,568,000 | |||
Total, single maturity date | 657,451,000 | |||
Proceeds from Sale of Available-for-sale Securities | ||||
Proceed from sale of investments | 20,178,000 | $ 22,595,000 | $ 115,999,000 | |
Gross realized gains/losses | ||||
Gross realized gains | 542,000 | 242,000 | 15,500,000 | |
Investment securities available for sale | 657,451,000 | 450,525,000 | ||
Gross realized losses | 25,000 | $ 20,000 | $ 837,000 | |
Equity securities | 3,334,000 | |||
Sales of equity securities | (7,733,000) | |||
Equity securities, realized losses | 53,000 | |||
Equity securities, realized gains | 0 | |||
Non interest income | ||||
Gross realized gains/losses | ||||
Equity securities, unrealized losses | 10,000 | |||
Unrealized losses recognized | 10,000 | |||
Covered non-agency mortgage-backed securities | ||||
Gross realized gains/losses | ||||
Gross realized gains | $ 14,300,000 | |||
Investment securities available for sale | $ 72,100,000 | |||
Mortgage-backed securities | ||||
Amortized cost of available-for-sale securities, by contractual maturity | ||||
Total, single maturity date | 329,690,000 | |||
Fair Value of available-for-sale securities, by contractual maturity | ||||
Total, single maturity date | $ 326,305,000 |
LOANS - Summary of loans (Detai
LOANS - Summary of loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of loans | |||
Loans | $ 4,137,551 | $ 3,226,678 | |
Loans, additional information | |||
Net deferred loan fees | 11,600 | 10,100 | |
Unearned discounts | 29,200 | 20,700 | |
Loans held for sale | 30,401 | 50,089 | |
Proceeds from sales of loans held for sale | 590,282 | 815,471 | $ 1,184,739 |
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 | 22,400 | |
New loans to related parties and other additions | 11,100 | 4,000 | |
Repayments from related parties and other reductions | 6,900 | 8,100 | |
Commercial real estate | |||
Summary of loans | |||
Loans | 2,682,268 | 2,196,528 | |
Commercial real estate | Commercial | |||
Summary of loans | |||
Loans | 810,884 | 555,930 | |
Commercial real estate | Commercial real estate | |||
Summary of loans | |||
Loans | 1,639,155 | 1,440,011 | |
Commercial real estate | Construction and land development | |||
Summary of loans | |||
Loans | 232,229 | 200,587 | |
Other loan portfolio | Residential real estate | |||
Summary of loans | |||
Loans | 578,048 | 453,552 | |
Other loan portfolio | Consumer | |||
Summary of loans | |||
Loans | 613,184 | 371,455 | |
Other loan portfolio | Lease financing | |||
Summary of loans | |||
Loans | 264,051 | 205,143 | |
Commercial and Residential Loan | |||
Loans, additional information | |||
Loans held for sale | 30,400 | 50,100 | |
Proceeds from sales of loans held for sale | 590,300 | 815,500,000 | |
Non-PCI loans | |||
Summary of loans | |||
Loans | 4,094,576 | 3,204,217 | |
Non-PCI loans | Commercial real estate | |||
Summary of loans | |||
Loans | 2,649,828 | 2,180,186 | |
Non-PCI loans | Commercial real estate | Commercial | |||
Summary of loans | |||
Loans | 806,027 | 553,257 | |
Non-PCI loans | Commercial real estate | Commercial real estate | |||
Summary of loans | |||
Loans | 1,619,903 | 1,427,076 | |
Non-PCI loans | Commercial real estate | Construction and land development | |||
Summary of loans | |||
Loans | 223,898 | 199,853 | |
Non-PCI loans | Other loan portfolio | |||
Summary of loans | |||
Loans | 1,444,748 | 1,024,031 | |
Non-PCI loans | Other loan portfolio | Residential real estate | |||
Summary of loans | |||
Loans | 569,289 | 447,602 | |
Non-PCI loans | Other loan portfolio | Consumer | |||
Summary of loans | |||
Loans | 611,408 | 371,286 | |
Non-PCI loans | Other loan portfolio | Lease financing | |||
Summary of loans | |||
Loans | 264,051 | 205,143 | |
PCI loans | |||
Summary of loans | |||
Loans | 42,975 | 22,461 | |
Customer outstanding balances | 56,900 | 32,800 | |
PCI loans | Commercial real estate | |||
Summary of loans | |||
Loans | 32,440 | 16,342 | |
PCI loans | Commercial real estate | Commercial | |||
Summary of loans | |||
Loans | 4,857 | 2,673 | |
PCI loans | Commercial real estate | Commercial real estate | |||
Summary of loans | |||
Loans | 19,252 | 12,935 | |
PCI loans | Commercial real estate | Construction and land development | |||
Summary of loans | |||
Loans | 8,331 | 734 | |
PCI loans | Other loan portfolio | Residential real estate | |||
Summary of loans | |||
Loans | 8,759 | 5,950 | |
PCI loans | Other loan portfolio | Consumer | |||
Summary of loans | |||
Loans | $ 1,776 | $ 169 |
LOANS - Risk category (Details)
LOANS - Risk category (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)region | Dec. 31, 2017USD ($) | |
Risk category | ||
Number of main regions | region | 4 | |
Loans and Leases Receivable, Gross, Total | $ 4,137,551 | $ 3,226,678 |
Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 2,682,268 | 2,196,528 |
Non-PCI loans | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 4,094,576 | 3,204,217 |
Non-PCI loans | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 2,649,828 | 2,180,186 |
Non-PCI loans | Commercial real estate | Acceptable credit quality | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 2,503,221 | 2,087,430 |
Non-PCI loans | Commercial real estate | Special mention | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 53,857 | 23,787 |
Non-PCI loans | Commercial real estate | Substandard | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 61,115 | 42,413 |
Non-PCI loans | Commercial real estate | Substandard - nonaccrual | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 31,154 | 14,533 |
Non-PCI loans | Commercial real estate | Not graded | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 481 | 12,023 |
Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,444,748 | 1,024,031 |
Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,435,952 | 1,016,214 |
Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 8,796 | 7,817 |
Commercial | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 810,884 | 555,930 |
Commercial | Non-PCI loans | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 806,027 | 553,257 |
Commercial | Non-PCI loans | Commercial real estate | Acceptable credit quality | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 748,296 | 510,928 |
Commercial | Non-PCI loans | Commercial real estate | Special mention | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 35,103 | 12,290 |
Commercial | Non-PCI loans | Commercial real estate | Substandard | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 14,139 | 27,718 |
Commercial | Non-PCI loans | Commercial real estate | Substandard - nonaccrual | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 8,489 | 1,266 |
Commercial | Non-PCI loans | Commercial real estate | Not graded | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,055 | |
Commercial real estate | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,639,155 | 1,440,011 |
Commercial real estate | Non-PCI loans | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,619,903 | 1,427,076 |
Commercial real estate | Non-PCI loans | Commercial real estate | Acceptable credit quality | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,536,127 | 1,384,630 |
Commercial real estate | Non-PCI loans | Commercial real estate | Special mention | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 15,306 | 11,497 |
Commercial real estate | Non-PCI loans | Commercial real estate | Substandard | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 46,976 | 14,695 |
Commercial real estate | Non-PCI loans | Commercial real estate | Substandard - nonaccrual | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 21,494 | 12,482 |
Commercial real estate | Non-PCI loans | Commercial real estate | Not graded | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 3,772 | |
Construction and land development | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 232,229 | 200,587 |
Construction and land development | Non-PCI loans | Commercial real estate | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 223,898 | 199,853 |
Construction and land development | Non-PCI loans | Commercial real estate | Acceptable credit quality | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 218,798 | 191,872 |
Construction and land development | Non-PCI loans | Commercial real estate | Special mention | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 3,448 | |
Construction and land development | Non-PCI loans | Commercial real estate | Substandard - nonaccrual | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 1,171 | 785 |
Construction and land development | Non-PCI loans | Commercial real estate | Not graded | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 481 | 7,196 |
Residential real estate | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 578,048 | 453,552 |
Residential real estate | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 569,289 | 447,602 |
Residential real estate | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 562,019 | 441,418 |
Residential real estate | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 7,270 | 6,184 |
Consumer | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 613,184 | 371,455 |
Consumer | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 611,408 | 371,286 |
Consumer | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 610,839 | 370,999 |
Consumer | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 569 | 287 |
Lease financing | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 264,051 | 205,143 |
Lease financing | Non-PCI loans | Other loan portfolio | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 264,051 | 205,143 |
Lease financing | Non-PCI loans | Other loan portfolio | Performing | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | 263,094 | 203,797 |
Lease financing | Non-PCI loans | Other loan portfolio | Impaired | ||
Risk category | ||
Loans and Leases Receivable, Gross, Total | $ 957 | $ 1,346 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest income : | |||
Interest income recognized on nonaccrual loans | $ 0 | $ 0 | $ 0 |
Additional interest income that would have been recorded had they been current | 1,800,000 | 860,000 | 718,000 |
Recognized interest income on loans modified under troubled debt restructurings | 97,000 | 85,000 | $ 339,000 |
PCI loans | |||
Summary of impaired loans | |||
Total impaired loans | 43,000,000 | 22,500,000 | |
Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 1,061,000 | 2,642,000 | |
Total impaired loans | 42,899,000 | 26,760,000 | |
Commercial real estate | Commercial | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 4,000 | 2,538,000 | |
Total impaired loans | 8,928,000 | 4,103,000 | |
Commercial real estate | Commercial real estate | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 149,000 | ||
Total impaired loans | 23,868,000 | 13,997,000 | |
Commercial real estate | Construction and land development | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 85,000 | ||
Total impaired loans | 1,307,000 | 843,000 | |
Other loan portfolio | Residential real estate | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 566,000 | 51,000 | |
Total impaired loans | 7,270,000 | 6,184,000 | |
Other loan portfolio | Consumer | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 51,000 | 53,000 | |
Total impaired loans | 569,000 | 287,000 | |
Other loan portfolio | Lease financing | Non-PCI loans | Impaired | |||
Summary of impaired loans | |||
Accruing loans contractually past due 90 days or more as to interest or principal payments | 206,000 | ||
Total impaired loans | $ 957,000 | $ 1,346,000 |
LOANS - Impaired Loans Individu
LOANS - Impaired Loans Individually Evaluated (excluding PCI loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impaired loans (excluding PCI loans) by portfolio | |||
Difference between the recorded investment and unpaid principal balance | $ 11,400 | $ 12,800 | |
Impaired | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 20,861 | 10,995 | |
With a valuation allowance, Unpaid Principal Balance | 27,989 | 12,955 | |
With a valuation allowance, Average Annual Recorded Investment | 21,597 | 13,677 | $ 11,774 |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 119 | 127 | 358 |
With no related valuation allowance, Recorded Investment | 22,038 | 15,765 | |
With no related valuation allowance, Unpaid Principal Balance | 26,301 | 26,604 | |
With no related valuation allowance, Average Annual Recorded Investment | 22,272 | 22,356 | 23,656 |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 44 | 3 | 20 |
Total impaired loans | 42,899 | 26,760 | |
Total, Unpaid Principal Balance | 54,290 | 39,559 | |
Total, Related Valuation Allowance | 5,985 | 1,805 | |
Total, Average Annual Recorded Investment | 43,869 | 36,033 | 35,430 |
Total, Interest Income Recognized While on Impaired Status | 163 | 130 | 378 |
Commercial | Impaired | Commercial real estate | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 7,945 | 3,237 | |
With a valuation allowance, Unpaid Principal Balance | 8,102 | 3,297 | |
With a valuation allowance, Average Annual Recorded Investment | 8,359 | 2,969 | 3,974 |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 30 | 15 | 15 |
With no related valuation allowance, Recorded Investment | 983 | 866 | |
With no related valuation allowance, Unpaid Principal Balance | 4,392 | 5,782 | |
With no related valuation allowance, Average Annual Recorded Investment | 1,233 | 2,369 | 5,604 |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 1 | ||
Total impaired loans | 8,928 | 4,103 | |
Total, Unpaid Principal Balance | 12,494 | 9,079 | |
Total, Related Valuation Allowance | 4,448 | 526 | |
Total, Average Annual Recorded Investment | 9,592 | 5,338 | 9,578 |
Total, Interest Income Recognized While on Impaired Status | 30 | 15 | 16 |
Commercial real estate | Impaired | Commercial real estate | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 7,496 | 2,297 | |
With a valuation allowance, Unpaid Principal Balance | 13,844 | 3,508 | |
With a valuation allowance, Average Annual Recorded Investment | 8,082 | 5,408 | 2,379 |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 45 | 70 | 306 |
With no related valuation allowance, Recorded Investment | 16,372 | 11,700 | |
With no related valuation allowance, Unpaid Principal Balance | 16,921 | 17,359 | |
With no related valuation allowance, Average Annual Recorded Investment | 16,253 | 16,822 | 16,847 |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 22 | 17 | |
Total impaired loans | 23,868 | 13,997 | |
Total, Unpaid Principal Balance | 30,765 | 20,867 | |
Total, Related Valuation Allowance | 523 | 329 | |
Total, Average Annual Recorded Investment | 24,335 | 22,230 | 19,226 |
Total, Interest Income Recognized While on Impaired Status | 67 | 70 | 323 |
Construction and land development | Impaired | Commercial real estate | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 171 | 103 | |
With a valuation allowance, Unpaid Principal Balance | 171 | 102 | |
With a valuation allowance, Average Annual Recorded Investment | 175 | 83 | 87 |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 3 | 4 | 7 |
With no related valuation allowance, Recorded Investment | 1,136 | 740 | |
With no related valuation allowance, Unpaid Principal Balance | 1,136 | 780 | |
With no related valuation allowance, Average Annual Recorded Investment | 1,152 | 815 | |
Total impaired loans | 1,307 | 843 | |
Total, Unpaid Principal Balance | 1,307 | 882 | |
Total, Related Valuation Allowance | 54 | 10 | |
Total, Average Annual Recorded Investment | 1,327 | 898 | 87 |
Total, Interest Income Recognized While on Impaired Status | 3 | 4 | 7 |
Residential real estate | Impaired | Other loan portfolio | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 4,055 | 4,028 | |
With a valuation allowance, Unpaid Principal Balance | 4,662 | 4,705 | |
With a valuation allowance, Average Annual Recorded Investment | 3,855 | 3,854 | 3,782 |
With a related valuation allowance, Interest Income Recognized while on Impaired Status | 41 | 38 | 30 |
With no related valuation allowance, Recorded Investment | 3,215 | 2,156 | |
With no related valuation allowance, Unpaid Principal Balance | 3,516 | 2,380 | |
With no related valuation allowance, Average Annual Recorded Investment | 3,348 | 2,055 | 1,179 |
With no related valuation allowance, Interest Income Recognized while on Impaired Status | 22 | 3 | 2 |
Total impaired loans | 7,270 | 6,184 | |
Total, Unpaid Principal Balance | 8,178 | 7,085 | |
Total, Related Valuation Allowance | 554 | 566 | |
Total, Average Annual Recorded Investment | 7,203 | 5,909 | 4,961 |
Total, Interest Income Recognized While on Impaired Status | 63 | 41 | 32 |
Consumer | Impaired | Other loan portfolio | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 428 | 266 | |
With a valuation allowance, Unpaid Principal Balance | 444 | 279 | |
With a valuation allowance, Average Annual Recorded Investment | 360 | 299 | 221 |
With no related valuation allowance, Recorded Investment | 141 | 21 | |
With no related valuation allowance, Unpaid Principal Balance | 145 | 21 | |
With no related valuation allowance, Average Annual Recorded Investment | 95 | 13 | 26 |
Total impaired loans | 569 | 287 | |
Total, Unpaid Principal Balance | 589 | 300 | |
Total, Related Valuation Allowance | 45 | 29 | |
Total, Average Annual Recorded Investment | 455 | 312 | 247 |
Lease financing | Impaired | Other loan portfolio | Non-PCI loans | |||
Impaired loans (excluding PCI loans) by portfolio | |||
With a valuation allowance, Recorded Investment | 766 | 1,064 | |
With a valuation allowance, Unpaid Principal Balance | 766 | 1,064 | |
With a valuation allowance, Average Annual Recorded Investment | 766 | 1,064 | 1,331 |
With no related valuation allowance, Recorded Investment | 191 | 282 | |
With no related valuation allowance, Unpaid Principal Balance | 191 | 282 | |
With no related valuation allowance, Average Annual Recorded Investment | 191 | 282 | |
Total impaired loans | 957 | 1,346 | |
Total, Unpaid Principal Balance | 957 | 1,346 | |
Total, Related Valuation Allowance | 361 | 345 | |
Total, Average Annual Recorded Investment | $ 957 | $ 1,346 | $ 1,331 |
LOANS - Aging Status of recorde
LOANS - Aging Status of recorded investment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | $ 4,137,551 | $ 3,226,678 |
Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 38,187 | 21,317 |
Total Past Due | 64,461 | 39,364 |
Current | 4,030,115 | 3,164,853 |
Loans and Leases Receivable, Gross, Total | 4,094,576 | 3,204,217 |
Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 38,187 | 21,317 |
Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 17,494 | 12,464 |
Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 7,719 | 2,941 |
Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 1,061 | 2,642 |
Commercial real estate | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 2,682,268 | 2,196,528 |
Commercial real estate | Non-PCI loans | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 2,649,828 | 2,180,186 |
Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 1,444,748 | 1,024,031 |
Other loan portfolio | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 8,796 | 7,817 |
Commercial | Commercial real estate | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 810,884 | 555,930 |
Commercial | Commercial real estate | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 8,489 | 1,266 |
Total Past Due | 15,087 | 7,263 |
Current | 790,940 | 545,994 |
Loans and Leases Receivable, Gross, Total | 806,027 | 553,257 |
Commercial | Commercial real estate | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 8,489 | 1,266 |
Commercial | Commercial real estate | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 4,013 | 3,282 |
Commercial | Commercial real estate | Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 2,581 | 177 |
Commercial | Commercial real estate | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 4 | 2,538 |
Commercial real estate | Commercial real estate | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 1,639,155 | 1,440,011 |
Commercial real estate | Commercial real estate | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 21,494 | 12,482 |
Total Past Due | 24,255 | 16,228 |
Current | 1,595,648 | 1,410,848 |
Loans and Leases Receivable, Gross, Total | 1,619,903 | 1,427,076 |
Commercial real estate | Commercial real estate | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 21,494 | 12,482 |
Commercial real estate | Commercial real estate | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 1,667 | 3,116 |
Commercial real estate | Commercial real estate | Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 945 | 630 |
Commercial real estate | Commercial real estate | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 149 | |
Construction and land development | Commercial real estate | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 232,229 | 200,587 |
Construction and land development | Commercial real estate | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 1,171 | 785 |
Total Past Due | 2,245 | 2,738 |
Current | 221,653 | 197,115 |
Loans and Leases Receivable, Gross, Total | 223,898 | 199,853 |
Construction and land development | Commercial real estate | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 1,171 | 785 |
Construction and land development | Commercial real estate | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 989 | 1,953 |
Construction and land development | Commercial real estate | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 85 | |
Residential real estate | Other loan portfolio | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 578,048 | 453,552 |
Residential real estate | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 5,894 | 5,204 |
Total Past Due | 8,480 | 6,784 |
Current | 560,809 | 440,818 |
Loans and Leases Receivable, Gross, Total | 569,289 | 447,602 |
Residential real estate | Other loan portfolio | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 5,894 | 5,204 |
Loans and Leases Receivable, Gross, Total | 7,270 | 6,184 |
Residential real estate | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 1,292 | 897 |
Residential real estate | Other loan portfolio | Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 728 | 632 |
Residential real estate | Other loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 566 | 51 |
Consumer | Other loan portfolio | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 613,184 | 371,455 |
Consumer | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 388 | 234 |
Total Past Due | 8,183 | 4,613 |
Current | 603,225 | 366,673 |
Loans and Leases Receivable, Gross, Total | 611,408 | 371,286 |
Consumer | Other loan portfolio | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 388 | 234 |
Loans and Leases Receivable, Gross, Total | 569 | 287 |
Consumer | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 5,211 | 2,824 |
Consumer | Other loan portfolio | Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 2,533 | 1,502 |
Consumer | Other loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | 51 | 53 |
Lease financing | Other loan portfolio | ||
Aging Status of recorded investment | ||
Loans and Leases Receivable, Gross, Total | 264,051 | 205,143 |
Lease financing | Other loan portfolio | Non-PCI loans | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 751 | 1,346 |
Total Past Due | 6,211 | 1,738 |
Current | 257,840 | 203,405 |
Loans and Leases Receivable, Gross, Total | 264,051 | 205,143 |
Lease financing | Other loan portfolio | Non-PCI loans | Impaired | ||
Aging Status of recorded investment | ||
Nonaccrual Loans | 751 | 1,346 |
Loans and Leases Receivable, Gross, Total | 957 | 1,346 |
Lease financing | Other loan portfolio | Non-PCI loans | 31-59 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 4,322 | $ 392 |
Lease financing | Other loan portfolio | Non-PCI loans | 60-89 Days Past Due | ||
Aging Status of recorded investment | ||
Past Due | 932 | |
Lease financing | Other loan portfolio | Non-PCI loans | Accruing Loans past Due 90 Days or More | ||
Aging Status of recorded investment | ||
Past Due | $ 206 |
LOANS - TDRs by portfolio (Deta
LOANS - TDRs by portfolio (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Troubled debt restructuring | ||
Allowance for loan losses on TDRs | $ 557,000 | $ 240,000 |
Unfunded commitments | 0 | 0 |
Minimum | Performing | ||
Troubled debt restructuring | ||
TDRs, individually evaluated for impairment, threshold | 50,000 | |
Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 3,651,000 | 2,801,000 |
TDR's Nonaccrual | 10,362,000 | 10,197,000 |
Total | 14,013,000 | 12,998,000 |
Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | 3,651,000 | 2,801,000 |
Commercial | Commercial real estate | Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 435,000 | 299,000 |
TDR's Nonaccrual | 406,000 | |
Total | 841,000 | 299,000 |
Commercial | Commercial real estate | Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | 435,000 | 299,000 |
Commercial real estate | Commercial real estate | Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 2,225,000 | 1,515,000 |
TDR's Nonaccrual | 9,103,000 | 9,915,000 |
Total | 11,328,000 | 11,430,000 |
Commercial real estate | Commercial real estate | Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | 2,225,000 | 1,515,000 |
Construction and land development | Commercial real estate | Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 51,000 | 58,000 |
Total | 51,000 | 58,000 |
Construction and land development | Commercial real estate | Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | 51,000 | 58,000 |
Residential real estate | Other loan portfolio | Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 810,000 | 929,000 |
TDR's Nonaccrual | 853,000 | 282,000 |
Total | 1,663,000 | 1,211,000 |
Residential real estate | Other loan portfolio | Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | 810,000 | $ 929,000 |
Consumer | Other loan portfolio | Non-PCI loans | ||
TDRs by loan portfolio (excluding PCI loans): | ||
TDR's Accruing | 130,000 | |
Total | 130,000 | |
Consumer | Other loan portfolio | Non-PCI loans | Impaired | ||
TDRs by loan portfolio (excluding PCI loans): | ||
Total | $ 130,000 |
LOANS - TDRs by portfolio - res
LOANS - TDRs by portfolio - restructured and subsequently defaulted (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Troubled debt restructurings: | |||
Number of loans | loan | 36 | 6 | 8 |
Pre-modification outstanding balance | $ 2,832 | $ 1,213 | $ 11,098 |
Post-modification outstanding balance | $ 2,799 | $ 1,130 | $ 10,992 |
Troubled debt restructurings that subsequently defaulted | |||
Number of loans | loan | 1 | ||
Recorded balance | $ 28 | ||
Commercial | Commercial real estate | |||
Troubled debt restructurings: | |||
Number of loans | loan | 2 | 1 | 3 |
Pre-modification outstanding balance | $ 423 | $ 362 | $ 685 |
Post-modification outstanding balance | $ 408 | $ 299 | $ 647 |
Commercial real estate | Commercial real estate | |||
Troubled debt restructurings: | |||
Number of loans | loan | 2 | 1 | 2 |
Pre-modification outstanding balance | $ 1,571 | $ 323 | $ 10,207 |
Post-modification outstanding balance | $ 1,565 | $ 323 | $ 10,139 |
Troubled debt restructurings that subsequently defaulted | |||
Number of loans | loan | 1 | ||
Recorded balance | $ 28 | ||
Residential real estate | Other loan portfolio | |||
Troubled debt restructurings: | |||
Number of loans | loan | 7 | 4 | 3 |
Pre-modification outstanding balance | $ 708 | $ 528 | $ 206 |
Post-modification outstanding balance | $ 696 | $ 508 | $ 206 |
Consumer | Other loan portfolio | |||
Troubled debt restructurings: | |||
Number of loans | loan | 25 | ||
Pre-modification outstanding balance | $ 130 | ||
Post-modification outstanding balance | $ 130 |
LOANS - PCI Loans - Changes in
LOANS - PCI Loans - Changes in the accretable yield for PCI loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of loans | |||||||||||
Accretion recorded as loan interest income | $ 45,068 | $ 42,978 | $ 46,432 | $ 36,179 | $ 29,960 | $ 35,276 | $ 28,942 | $ 25,928 | $ 170,657 | $ 120,106 | $ 99,663 |
PCI loans | |||||||||||
Changes in the accretable yield for PCI loans | |||||||||||
Balance, beginning of period | $ 5,732 | $ 9,035 | 5,732 | 9,035 | 10,526 | ||||||
Accretion | (6,092) | (5,546) | (8,579) | ||||||||
Other adjustments (including maturities, charge-offs and impact of changes in timing of expected cash flows) | 2,682 | 120 | 915 | ||||||||
Reclassification from (to) non-accretable | 3,823 | 194 | 6,173 | ||||||||
Balance, end of period | $ 12,240 | $ 5,732 | 12,240 | 5,732 | $ 9,035 | ||||||
Alpine Bank | PCI loans | |||||||||||
Changes in the accretable yield for PCI loans | |||||||||||
New loans purchased | $ 6,095 | ||||||||||
Centrue | PCI loans | |||||||||||
Changes in the accretable yield for PCI loans | |||||||||||
New loans purchased | $ 1,929 |
LOANS - Allowance for loan loss
LOANS - Allowance for loan losses (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in allowance for loan losses : | |||||||||||
Beginning balance | $ 16,431,000 | $ 14,862,000 | $ 16,431,000 | $ 14,862,000 | $ 15,988,000 | ||||||
Provision for loan losses | $ 3,467,000 | $ 2,103,000 | $ 1,854,000 | 2,006,000 | $ 6,076,000 | $ 1,489,000 | $ 458,000 | 1,533,000 | 9,430,000 | 9,556,000 | 5,591,000 |
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (6,989,000) | (9,822,000) | (7,736,000) | ||||||||
Loan recoveries | 2,031,000 | 1,835,000 | 1,019,000 | ||||||||
Net loan (charge-offs) recoveries | (4,958,000) | (7,987,000) | (6,717,000) | ||||||||
Ending balance | 20,903,000 | 16,431,000 | 20,903,000 | 16,431,000 | 14,862,000 | ||||||
Non-PCI loans | |||||||||||
Changes in allowance for loan losses : | |||||||||||
Beginning balance | 14,902,000 | 13,744,000 | 14,902,000 | 13,744,000 | 14,093,000 | ||||||
Provision for loan losses | 9,246,000 | 9,295,000 | 6,425,000 | ||||||||
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (6,844,000) | (9,822,000) | (7,668,000) | ||||||||
Loan recoveries | 2,031,000 | 1,685,000 | 894,000 | ||||||||
Net loan (charge-offs) recoveries | (4,813,000) | (8,137,000) | (6,774,000) | ||||||||
Ending balance | 19,335,000 | 14,902,000 | 19,335,000 | 14,902,000 | 13,744,000 | ||||||
Non-PCI loans | Nonperforming, one borrower | |||||||||||
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (4,600,000) | 1,400,000 | |||||||||
Non-PCI loans | Nonperforming, single credit relationship borrower | |||||||||||
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (1,200,000) | 530,000 | |||||||||
Non-PCI loans | Nonperforming, group of nonperforming loans | |||||||||||
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (1,600,000) | ||||||||||
PCI loans | |||||||||||
Changes in allowance for loan losses : | |||||||||||
Beginning balance | $ 1,529,000 | $ 1,118,000 | 1,529,000 | 1,118,000 | 1,895,000 | ||||||
Provision for loan losses | 184,000 | 261,000 | (834,000) | ||||||||
Allowance for Loan and Lease Losses Write-offs, Net [Abstract] | |||||||||||
Loan charge-offs | (145,000) | (68,000) | |||||||||
Loan recoveries | 150,000 | 125,000 | |||||||||
Net loan (charge-offs) recoveries | (145,000) | 150,000 | 57,000 | ||||||||
Ending balance | $ 1,568,000 | $ 1,529,000 | $ 1,568,000 | $ 1,529,000 | $ 1,118,000 |
LOANS - Allowance for loan lo_2
LOANS - Allowance for loan losses by loan portfolio and recorded investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | $ 16,431 | $ 14,862 | $ 16,431 | $ 14,862 | $ 15,988 | ||||||||
Provision for loan losses | $ 3,467 | $ 2,103 | $ 1,854 | 2,006 | $ 6,076 | $ 1,489 | $ 458 | 1,533 | 9,430 | 9,556 | 5,591 | ||
Charge-offs | (6,989) | (9,822) | (7,736) | ||||||||||
Recoveries | 2,031 | 1,835 | 1,019 | ||||||||||
Ending balance | 20,903 | 16,431 | 20,903 | 16,431 | 14,862 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | $ 5,492 | $ 1,070 | |||||||||||
Loans collectively evaluated for impairment | 493 | 735 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 13,350 | 13,097 | |||||||||||
Loans acquired with deteriorated credit quality | 1,568 | 1,529 | |||||||||||
Total | 20,903 | 16,431 | 16,431 | 14,862 | 16,431 | 14,862 | 15,988 | 20,903 | 16,431 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 37,802 | 19,908 | |||||||||||
Impaired loans collectively evaluated for impairment | 5,097 | 6,852 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 4,051,677 | 3,177,457 | |||||||||||
Loans acquired with deteriorated credit quality | 42,975 | 22,461 | |||||||||||
Loans and Leases Receivable, Gross, Total | 4,137,551 | 3,226,678 | |||||||||||
PCI loans | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 1,529 | 1,118 | 1,529 | 1,118 | 1,895 | ||||||||
Provision for loan losses | 184 | 261 | (834) | ||||||||||
Charge-offs | (145) | (68) | |||||||||||
Recoveries | 150 | 125 | |||||||||||
Ending balance | 1,568 | 1,529 | 1,568 | 1,529 | 1,118 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Total | 1,568 | 1,529 | 1,529 | 1,118 | 1,529 | 1,118 | 1,895 | 1,568 | 1,529 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 42,975 | 22,461 | |||||||||||
Commercial real estate | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 2,682,268 | 2,196,528 | |||||||||||
Commercial real estate | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 32,440 | 16,342 | |||||||||||
Commercial | Commercial real estate | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 5,256 | 5,920 | 5,256 | 5,920 | |||||||||
Provision for loan losses | 4,941 | (118) | |||||||||||
Charge-offs | (1,236) | (737) | |||||||||||
Recoveries | 563 | 191 | |||||||||||
Ending balance | 9,524 | 5,256 | 9,524 | 5,256 | 5,920 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | 4,405 | 221 | |||||||||||
Loans collectively evaluated for impairment | 43 | 305 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 4,971 | 4,230 | |||||||||||
Loans acquired with deteriorated credit quality | 105 | 500 | |||||||||||
Total | 9,524 | 5,256 | 5,256 | 5,920 | 5,256 | 5,920 | 5,920 | 9,524 | 5,256 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 8,520 | 1,285 | |||||||||||
Impaired loans collectively evaluated for impairment | 408 | 2,818 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 797,099 | 549,154 | |||||||||||
Loans acquired with deteriorated credit quality | 4,857 | 2,673 | |||||||||||
Loans and Leases Receivable, Gross, Total | 810,884 | 555,930 | |||||||||||
Commercial | Commercial real estate | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 4,857 | 2,673 | |||||||||||
Commercial real estate | Commercial real estate | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 5,044 | 3,225 | 5,044 | 3,225 | |||||||||
Provision for loan losses | (207) | 7,879 | |||||||||||
Charge-offs | (492) | (6,552) | |||||||||||
Recoveries | 378 | 492 | |||||||||||
Ending balance | 4,723 | 5,044 | 4,723 | 5,044 | 3,225 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | 476 | 281 | |||||||||||
Loans collectively evaluated for impairment | 47 | 48 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 3,356 | 4,379 | |||||||||||
Loans acquired with deteriorated credit quality | 844 | 336 | |||||||||||
Total | 4,723 | 5,044 | 5,044 | 3,225 | 5,044 | 3,225 | 3,225 | 4,723 | 5,044 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 23,431 | 13,554 | |||||||||||
Impaired loans collectively evaluated for impairment | 437 | 443 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 1,596,035 | 1,413,079 | |||||||||||
Loans acquired with deteriorated credit quality | 19,252 | 12,935 | |||||||||||
Loans and Leases Receivable, Gross, Total | 1,639,155 | 1,440,011 | |||||||||||
Commercial real estate | Commercial real estate | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 19,252 | 12,935 | |||||||||||
Construction and land development | Commercial real estate | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 518 | 345 | 518 | 345 | |||||||||
Provision for loan losses | (227) | 110 | |||||||||||
Recoveries | 81 | 63 | |||||||||||
Ending balance | 372 | 518 | 372 | 518 | 345 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | 48 | 5 | |||||||||||
Loans collectively evaluated for impairment | 6 | 5 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 318 | 504 | |||||||||||
Loans acquired with deteriorated credit quality | 4 | ||||||||||||
Total | 372 | 518 | 518 | 345 | 518 | 345 | 345 | 372 | 518 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 1,249 | 797 | |||||||||||
Impaired loans collectively evaluated for impairment | 58 | 46 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 222,591 | 199,010 | |||||||||||
Loans acquired with deteriorated credit quality | 8,331 | 734 | |||||||||||
Loans and Leases Receivable, Gross, Total | 232,229 | 200,587 | |||||||||||
Construction and land development | Commercial real estate | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 8,331 | 734 | |||||||||||
Residential real estate | Other loan portfolio | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 2,750 | 2,929 | 2,750 | 2,929 | |||||||||
Provision for loan losses | (517) | 1 | |||||||||||
Charge-offs | (361) | (698) | |||||||||||
Recoveries | 169 | 518 | |||||||||||
Ending balance | 2,041 | 2,750 | 2,041 | 2,750 | 2,929 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | 233 | 302 | |||||||||||
Loans collectively evaluated for impairment | 321 | 264 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 1,051 | 1,644 | |||||||||||
Loans acquired with deteriorated credit quality | 436 | 540 | |||||||||||
Total | 2,041 | 2,750 | 2,750 | 2,929 | 2,750 | 2,929 | 2,929 | 2,041 | 2,750 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 3,929 | 3,700 | |||||||||||
Impaired loans collectively evaluated for impairment | 3,341 | 2,484 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 562,019 | 441,418 | |||||||||||
Loans acquired with deteriorated credit quality | 8,759 | 5,950 | |||||||||||
Loans and Leases Receivable, Gross, Total | 578,048 | 453,552 | |||||||||||
Residential real estate | Other loan portfolio | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 8,759 | 5,950 | |||||||||||
Consumer | Other loan portfolio | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 1,344 | 930 | 1,344 | 930 | |||||||||
Provision for loan losses | 2,156 | 954 | |||||||||||
Charge-offs | (1,876) | (794) | |||||||||||
Recoveries | 530 | 254 | |||||||||||
Ending balance | 2,154 | 1,344 | 2,154 | 1,344 | 930 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans collectively evaluated for impairment | 45 | 29 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 1,926 | 1,166 | |||||||||||
Loans acquired with deteriorated credit quality | 183 | 149 | |||||||||||
Total | 2,154 | 1,344 | 1,344 | 930 | 1,344 | 930 | 930 | 2,154 | 1,344 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 5 | 4 | |||||||||||
Impaired loans collectively evaluated for impairment | 564 | 283 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 610,839 | 370,999 | |||||||||||
Loans acquired with deteriorated credit quality | 1,776 | 169 | |||||||||||
Loans and Leases Receivable, Gross, Total | 613,184 | 371,455 | |||||||||||
Consumer | Other loan portfolio | PCI loans | |||||||||||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Loans and Leases Receivable, Gross, Total | 1,776 | 169 | |||||||||||
Lease financing | Other loan portfolio | |||||||||||||
Changes in allowance for loan losses : | |||||||||||||
Beginning balance | 1,519 | 1,513 | 1,519 | 1,513 | |||||||||
Provision for loan losses | 3,284 | 730 | |||||||||||
Charge-offs | (3,024) | (1,041) | |||||||||||
Recoveries | 310 | 317 | |||||||||||
Ending balance | 2,089 | 1,519 | 2,089 | 1,519 | 1,513 | ||||||||
Allowance for loan losses balance at December 31, 2014 attributable to: | |||||||||||||
Loans individually evaluated for impairment | 330 | 261 | |||||||||||
Loans collectively evaluated for impairment | 31 | 84 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 1,728 | 1,174 | |||||||||||
Total | $ 2,089 | $ 1,519 | $ 1,519 | $ 1,513 | $ 1,519 | $ 1,513 | $ 1,513 | 2,089 | 1,519 | ||||
Recorded investment (loan balance) at December 31, 2014: | |||||||||||||
Impaired loans individually evaluated for impairment | 668 | 568 | |||||||||||
Impaired loans collectively evaluated for impairment | 289 | 778 | |||||||||||
Non-impaired loans collectively evaluated for impairment | 263,094 | 203,797 | |||||||||||
Loans and Leases Receivable, Gross, Total | $ 264,051 | $ 205,143 |
PREMISES AND EQUIPMENT, NET (De
PREMISES AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Premises and equipment gross | $ 126,230 | $ 105,789 | |
Accumulated depreciation | (31,390) | (29,627) | |
Premises and equipment, net | 94,840 | 76,162 | |
Depreciation | 6,166 | 5,014 | $ 5,080 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment gross | 20,231 | 16,109 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment gross | 76,141 | 63,837 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment gross | $ 29,858 | $ 25,843 |
MORTGAGE SERVICING RIGHTS (Deta
MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Commercial FHA Mortgage Loans | ||
MORTGAGE SERVICING RIGHTS | ||
Principal balances of loans serviced for others | $ 3,980 | $ 3,980 |
Residential mortgage loans | ||
MORTGAGE SERVICING RIGHTS | ||
Principal balances of loans serviced for others | $ 897.6 | $ 1,990 |
MORTGAGE SERVICING RIGHTS - Cha
MORTGAGE SERVICING RIGHTS - Changes in MSR (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Mortgage servicing rights: | |||||
Balance, beginning of period | $ 55,714 | $ 52,006 | $ 47,589 | ||
Balance, end of period | 56,252 | 55,714 | 52,006 | ||
Valuation allowances: | |||||
Balance, beginning of period | 3,254 | 1,712 | |||
Impairment | 931 | 1,542 | 1,920 | ||
Reductions | (1,380) | (208) | |||
Balance, end of period | 2,805 | 3,254 | 1,712 | ||
Mortgage servicing rights, net | 53,447 | 52,460 | 50,294 | ||
Fair Value | 53,447 | 52,460 | 50,294 | $ 47,589 | |
Loss on mortgage servicing rights held for sale | (458) | (4,059) | |||
Mortgage servicing rights held for sale | 3,545 | 10,176 | |||
Commercial FHA Mortgage Loans | |||||
Mortgage servicing rights: | |||||
Originated servicing | 3,174 | 6,287 | 6,805 | ||
Amortization | (2,636) | (2,579) | $ (2,388) | ||
Residential mortgage loans | |||||
Valuation allowances: | |||||
Loss on mortgage servicing rights held for sale | $ 4,100 | ||||
Sale of mortgage servicing rights held for sale | $ 10,200 | ||||
Mortgage servicing rights held for sale | $ 3,500 |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of key assumptions (Details) - Commercial FHA Mortgage Loans - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assumptions Used to Estimate Fair Value | ||
Servicing Fee | 0.13% | 0.12% |
Interest Rate | 3.67% | 3.67% |
Remaining Years to Maturity | 30 years 1 month 6 days | 30 years 3 months 18 days |
Prepayment Rate | 8.24% | 8.27% |
Servicing Cost | $ 1,000 | $ 1,000 |
Maximum | ||
Assumptions Used to Estimate Fair Value | ||
Discount Rate | 14.00% | 14.00% |
Minimum | ||
Assumptions Used to Estimate Fair Value | ||
Discount Rate | 10.00% | 10.00% |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||||
Goodwill | $ 164,673 | $ 98,624 | ||
Goodwill, Impairment Loss | $ 0 | |||
Alpine Bank | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 65,964 | |||
Centrue | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 47,444 | |||
Banking | ||||
Goodwill [Line Items] | ||||
Goodwill | 149,035 | 82,986 | ||
Commercial FHA origination and servicing | ||||
Goodwill [Line Items] | ||||
Goodwill | 10,892 | 10,892 | ||
Wealth management | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 4,746 | $ 4,746 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-lived intangible assets | |||||
Gross Carrying Amount | $ 66,483 | $ 39,083 | |||
Accumulated Amortization | (29,107) | (22,151) | |||
Total | 37,376 | 16,932 | |||
Amortization of intangible assets | 6,956 | 3,325 | $ 2,147 | ||
Estimated amortization expense of intangible assets | |||||
2,019 | 6,716 | ||||
2,020 | 5,792 | ||||
2,021 | 5,032 | ||||
2,022 | 4,326 | ||||
2,023 | 3,620 | ||||
Thereafter | 11,890 | ||||
Core deposits | |||||
Finite-lived intangible assets | |||||
Gross Carrying Amount | 52,712 | 31,612 | |||
Accumulated Amortization | (24,803) | (18,943) | |||
Total | 27,909 | 12,669 | |||
Customer relationship | |||||
Finite-lived intangible assets | |||||
Gross Carrying Amount | 13,771 | 7,471 | |||
Accumulated Amortization | (4,304) | (3,208) | |||
Total | $ 9,467 | $ 4,263 | |||
Alpine Bank | |||||
Finite-lived intangible assets | |||||
Total intangible assets | $ 27,400 | ||||
Alpine Bank | Core deposits | |||||
Finite-lived intangible assets | |||||
Total intangible assets | 21,100 | $ 21,100 | |||
Alpine Bank | Customer relationship | |||||
Finite-lived intangible assets | |||||
Total intangible assets | $ 6,300 | $ 6,300 | |||
Amortization period | 13 years |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | |||
Notional amount, asset derivatives | $ 541,581,000 | $ 717,976,000 | |
Fair value of asset derivatives | 4,492,000 | 6,362,000 | |
Net (losses) gains recognized on derivative instruments | 2,000,000 | 16,000 | $ 351,000 |
Notional amount of interest rate swaps | 10,000,000 | ||
Interest rate lock commitments | |||
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | |||
Notional amount, asset derivatives | 264,710,000 | 345,152,000 | |
Fair value of asset derivatives | 4,492,000 | 6,331,000 | |
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 | 276,871,000 | 372,824,000 | |
Notional amount, liability derivatives | 54,000 | ||
Fair value of asset derivatives | $ 31,000 | ||
Interest rate swap contracts | |||
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | |||
Notional amount of interest rate swaps | 9,500,000 | ||
Interest rate swap contracts | Other assets | |||
Fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition | |||
Fair value of asset derivatives | $ 145,000 |
DERIVATIVE INSTRUMENTS - Intere
DERIVATIVE INSTRUMENTS - Interest Rate Swap Agreements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative disclosures | ||
Notional amount of interest rate swaps | $ 10,000,000 | |
Fair value of asset derivatives | $ 4,492,000 | 6,362,000 |
LIBOR | ||
Derivative disclosures | ||
Variable interest rate (as a percent) | 4.35% | |
Interest rate swap contracts | ||
Derivative disclosures | ||
Notional amount of interest rate swaps | $ 9,500,000 | |
Interest rate swap contracts | Other assets | ||
Derivative disclosures | ||
Fair value of asset derivatives | $ 145,000 | |
Interest rate swap contracts | Other liabilities. | ||
Derivative disclosures | ||
Fair value of liability derivatives | $ 17,000 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Classification of deposits | ||
Noninterest-bearing demand | $ 972,164 | $ 724,443 |
Interest-bearing: | ||
Checking | 1,002,275 | 785,934 |
Money market | 862,171 | 646,426 |
Savings | 442,132 | 281,212 |
Time | 795,428 | 693,074 |
Total deposits | 4,074,170 | 3,131,089 |
Time deposits 250000 or more | 76,000 | 69,900 |
Brokered certificate of deposit | 161,600 | 190,300 |
Schedule of maturities of time deposits | ||
2,019 | 523,651 | |
2,020 | 135,754 | |
2,021 | 97,871 | |
2,022 | 22,183 | |
2,023 | 15,968 | |
Thereafter | 1 | |
Total | 795,428 | |
Investment Securities | ||
Interest-bearing: | ||
Amounts pledged for public deposits | 182,400 | $ 116,000 |
Standby Letters of Credit | ||
Interest-bearing: | ||
Amounts pledged for public deposits | $ 120,000 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | ||
Outstanding at period-end | $ 124,235 | $ 156,126 |
Average amount outstanding | 138,135 | 163,461 |
Maximum amount outstanding at any month end | $ 173,387 | $ 196,278 |
Weighted average interest rate: | ||
During period | 0.51% | 0.23% |
End of period | 0.71% | 0.28% |
Short-Term Borrowings | ||
Investment securities pledged/collateralized for secured borrowings | $ 132,200 | $ 157,200 |
Line of credit | 0 | 0 |
Federal funds lines of credit | 45,000 | |
Commercial real estate | ||
Short-Term Borrowings | ||
Loans and Leases Receivable, Gross, Carrying Amount, Commercial | 67,600 | 36,500 |
Federal Reserve Discount Window | ||
Short-Term Borrowings | ||
Line of credit | $ 56,800 | $ 32,500 |
FHLB ADVANCES AND OTHER BORRO_3
FHLB ADVANCES AND OTHER BORROWINGS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 09, 2017 | |
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | $ 640,631,000 | $ 496,436,000 | |
Federal Home Loan Bank Advances, Interest Rate Information | |||
Preferred stock, shares issued | 2,636 | 2,636 | |
Preferred stock, par value | $ 2 | $ 2 | |
FHLB advances interest rate | 1.20% | ||
Principal payment on term loan | $ 1,400,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 45,000,000 | ||
FHLB advances, collateral for mortgage and home equity line of credit loans | $ 2,220,000,000 | $ 1,860,000,000 | |
Revolving Credit Facility [Member] | Maximum | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Line of Credit Facility, Maximum Borrowing Capacity | 10,000,000 | ||
Term loan | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Face Amount | $ 40,000,000 | ||
LIBOR | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Basis spread on variable rate | 4.35% | ||
LIBOR | Term loan | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Basis spread on variable rate | 2.25% | ||
Variable rate basis | one-month LIBOR | ||
Series G Preferred Stock | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Preferred stock, shares issued | 181 | 181 | |
Preferred stock, par value | $ 1,000 | ||
Midland States Bancorp, Inc | Term loan | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Long term debt | $ 32,840,000 | $ 37,113,000 | |
Midland States Bancorp, Inc | LIBOR | Term loan | |||
Federal Home Loan Bank Advances, Interest Rate Information | |||
Basis spread on variable rate | 2.25% | ||
Interest rate during the period | 4.63% | 3.63% | |
Midland States Bancorp, Inc | Series G Preferred Stock | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Long term debt | $ 181,000 | $ 181,000 | $ 181,000 |
Midland States Bank | Obligations under capital leases implicit interest rate of 1.70% maturing through July 2018 | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | 5,000 | ||
Midland States Bank | Fixed Rate Term Loan | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | 607,610,000 | 450,137,000 | |
Midland States Bank | Fixed rate, fixed term maturing through June 2021 | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | $ 87,700,000 | $ 145,000,000 | |
Federal Home Loan Bank Advances, Interest Rate Information | |||
FHLB advances interest rate | 2.35% | 1.35% | |
Midland States Bank | Putable fixed rate loan maturing through August 2023 | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | $ 520,000,000 | $ 305,000,000 | |
Federal Home Loan Bank Advances, Interest Rate Information | |||
FHLB advances interest rate | 2.09% | 1.29% | |
Midland States Bank | Variable rate, fixed term maturing through March 2018 | |||
FHLB ADVANCES AND OTHER BORROWINGS | |||
Total FHLB advances and other borrowings | $ 9,000,000 |
FHLB ADVANCES AND OTHER BORRO_4
FHLB ADVANCES AND OTHER BORROWINGS - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | ||
2,019 | $ 73,074 | |
2,020 | 30,953 | |
2,021 | 5,814 | |
2,022 | 153,210 | |
2,023 | 267,580 | |
Thereafter | 110,000 | |
Total | $ 640,631 | $ 496,436 |
SUBORDINATED DEBT (Details)
SUBORDINATED DEBT (Details) $ in Thousands | Oct. 13, 2017USD ($) | Jun. 30, 2015USD ($)tranche | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Subordinated Borrowing [Line Items] | |||||
Carrying amount | $ 94,134 | $ 93,972 | |||
Duration with fixed interest rate | 5 years | ||||
Number of tranches | tranche | 2 | ||||
Common stock | $ 238 | 191 | |||
Repayments of Subordinated Debt | $ 8,000 | ||||
LIBOR | |||||
Subordinated Borrowing [Line Items] | |||||
Variable interest rate (as a percent) | 4.35% | ||||
Subordinate debt | |||||
Subordinated Borrowing [Line Items] | |||||
Debt issuance costs | $ 600 | $ 900 | |||
Subordinate debt, $40,325 maturing June 18, 2025 | |||||
Subordinated Borrowing [Line Items] | |||||
Fixed interest rate | 6.00% | ||||
Carrying amount | $ 39,871 | 39,800 | |||
Variable rate basis | three-month LIBOR | ||||
Face Amount | $ 40,325 | ||||
Subordinate debt, $40,325 maturing June 18, 2025 | LIBOR | |||||
Subordinated Borrowing [Line Items] | |||||
Variable interest rate (as a percent) | 4.35% | ||||
Subordinate debt, $15,000 maturing June 18, 2025 | |||||
Subordinated Borrowing [Line Items] | |||||
Fixed interest rate | 6.50% | ||||
Carrying amount | $ 14,831 | 14,805 | |||
Face Amount | $ 15,000 | ||||
Subordinated debt $40,000 maturing October 15, 2027 | |||||
Subordinated Borrowing [Line Items] | |||||
Fixed interest rate | 6.25% | ||||
Carrying amount | $ 39,432 | 39,367 | |||
Duration with fixed interest rate | 5 years | ||||
Variable rate basis | three-month LIBOR | ||||
Face Amount | $ 40,000 | ||||
Subordinated debt $40,000 maturing October 15, 2027 | LIBOR | |||||
Subordinated Borrowing [Line Items] | |||||
Variable interest rate (as a percent) | 4.229% | 4.23% | |||
Term loan | |||||
Subordinated Borrowing [Line Items] | |||||
Face Amount | $ 40,000 | ||||
Term loan | LIBOR | |||||
Subordinated Borrowing [Line Items] | |||||
Variable interest rate (as a percent) | 2.25% | ||||
Variable rate basis | one-month LIBOR | ||||
Private Placement | Subordinate debt | |||||
Subordinated Borrowing [Line Items] | |||||
Face Amount | $ 40,000 | $ 55,300 |
TRUST PREFERRED DEBENTURES (Det
TRUST PREFERRED DEBENTURES (Details) - USD ($) | 12 Months Ended | |||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 09, 2017 | Dec. 31, 2014 | Jun. 05, 2013 | Jun. 06, 2007 | Nov. 30, 2006 | Apr. 30, 2004 | Mar. 26, 2004 | Dec. 19, 2003 | |
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 47,794,000 | $ 47,330,000 | ||||||||
LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 4.35% | |||||||||
Centrue | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Liquidation amount per security | $ 1,000 | |||||||||
Book value of subordinated debentures | $ 10,000,000 | |||||||||
Fair value of subordinated debentures | $ 7,600,000 | |||||||||
Number of preferred securities issued | 10,000 | |||||||||
Grant Park Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Liquidation amount per security | $ 1,000 | |||||||||
Book value of subordinated debentures | $ 3,000,000 | |||||||||
Fair value of subordinated debentures | $ 1,800,000 | |||||||||
Number of preferred securities issued | 3,000 | |||||||||
Midland Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Pool issued | $ 10,000,000 | |||||||||
Liquidation amount per security | $ 1,000 | |||||||||
LSHC Trust III | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Liquidation amount per security | $ 1,000 | |||||||||
Book value of subordinated debentures | $ 40,000,000 | |||||||||
Fair value of subordinated debentures | $ 26,100,000 | |||||||||
Number of preferred securities issued | 20,000 | |||||||||
LSHC Trust IV | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Liquidation amount per security | $ 1,000 | |||||||||
Number of preferred securities issued | 20,000 | |||||||||
Centrue Bank | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 7,990,000 | 7,915,000 | ||||||||
Trust preferred debentures maturing January 23, 2034 | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 2,209,000 | $ 2,151,000 | ||||||||
Trust preferred debentures maturing January 23, 2034 | Grant Park Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Interest rate (as a percent) | 5.37% | 4.23% | ||||||||
Face Amount | $ 3,093,000 | $ 3,000,000 | ||||||||
Trust preferred debentures maturing January 23, 2034 | Grant Park Trust | LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 2.85% | |||||||||
Trust preferred debentures maturing January 23, 2034 | Midland Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Face Amount | 10,310,000 | |||||||||
Trust preferred debentures maturing April 23, 2034 | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 10,272,000 | $ 10,269,000 | ||||||||
Trust preferred debentures maturing April 23, 2034 | Midland Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Interest rate (as a percent) | 5.23% | 4.11% | ||||||||
Face Amount | $ 10,000,000 | |||||||||
Trust preferred debentures maturing April 23, 2034 | Midland Trust | LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 2.75% | |||||||||
Trust preferred debentures maturing December 31, 2036 | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 14,074,000 | $ 13,911,000 | ||||||||
Trust preferred debentures maturing December 31, 2036 | LSHC Trust III | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Interest rate (as a percent) | 4.54% | 3.34% | ||||||||
Face Amount | $ 20,000,000 | 20,619,000 | ||||||||
Trust preferred debentures maturing December 31, 2036 | LSHC Trust III | LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 1.75% | |||||||||
Trust preferred debentures maturing September 6, 2037 | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Trust preferred debentures | $ 13,249,000 | $ 13,084,000 | ||||||||
Trust preferred debentures maturing September 6, 2037 | LSHC Trust IV | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Interest rate (as a percent) | 4.21% | 2.98% | ||||||||
Face Amount | $ 20,000,000 | 20,619,000 | ||||||||
Trust preferred debentures maturing September 6, 2037 | LSHC Trust IV | LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 1.47% | |||||||||
Trust Preferred Debentures Maturing June 17, 2034 | Centrue Bank | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Interest rate (as a percent) | 4.25% | |||||||||
Face Amount | 10,310,000 | |||||||||
Trust Preferred Debentures Maturing June 17, 2034 | Centrue Bank | LIBOR | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Variable interest rate (as a percent) | 2.65% | |||||||||
Interest rate (as a percent) | 5.44% | |||||||||
Other assets | Grant Park Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Investment in common stock | $ 93,000 | |||||||||
Other assets | Midland Trust | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Investment in common stock | $ 310,000 | |||||||||
Other assets | LSHC Trust IV | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Investment in common stock | $ 1,200,000 | |||||||||
Other assets | Centrue Bank | ||||||||||
TRUST PREFERRED DEBENTURES | ||||||||||
Investment in common stock | $ 310,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Federal: | |||||||||||
Current | $ 55 | $ (696) | $ 1,718 | ||||||||
Deferred | 6,748 | 11,632 | 11,381 | ||||||||
State: | |||||||||||
Current | 807 | (921) | 2,630 | ||||||||
Deferred | 3,774 | 400 | 3,160 | ||||||||
Total income tax expense | $ 4,527 | $ 2,436 | $ 3,045 | $ 1,376 | $ 5,775 | $ 280 | $ 1,377 | $ 2,983 | $ 11,384 | $ 10,415 | $ 18,889 |
Effective tax rate | 21.00% | 35.00% |
INCOME TAXES - Statutory federa
INCOME TAXES - Statutory federal rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation between the amount of reported income tax and the amount computed using statutory federal rate | |||||||||||
Effective income tax rate | 21.00% | 35.00% | |||||||||
Expected income taxes | $ 10,665 | $ 9,244 | $ 17,648 | ||||||||
Less income tax effect of: | |||||||||||
Tax exempt interest | (1,441) | (1,635) | (1,637) | ||||||||
State tax, net of federal benefit | 4,028 | (110) | 3,132 | ||||||||
Increase in cash surrender value of life insurance policies | (854) | (969) | (1,007) | ||||||||
Equity-based compensation benefit | (62) | (1,297) | (366) | ||||||||
Non-deductible transaction costs | 71 | 389 | |||||||||
Valuation allowance | (409) | (229) | 631 | ||||||||
Effect of federal rate change enacted in 2017 | 4,540 | ||||||||||
Other | (614) | 482 | 488 | ||||||||
Actual income tax expense | $ 4,527 | $ 2,436 | $ 3,045 | $ 1,376 | $ 5,775 | $ 280 | $ 1,377 | $ 2,983 | $ 11,384 | $ 10,415 | $ 18,889 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | |||
Allowance for loan losses | $ 5,748,000 | $ 4,405,000 | |
Deferred compensation | 2,158,000 | 1,896,000 | |
Loans | 6,579,000 | 3,896,000 | |
Write-down of other real estate owned | 563,000 | 776,000 | |
Tax credits | 1,041,000 | 1,501,000 | |
Nonaccrual interest | 730,000 | 708,000 | |
Unrealized loss on securities | 802,000 | ||
Stock compensation | 700,000 | 907,000 | |
Deferred loan fees, net of costs | 133,000 | ||
Net operating losses | 17,417,000 | 20,097,000 | |
Accrued litigation | 179,000 | 101,000 | |
Allowance for repurchase reserves | 135,000 | 100,000 | |
Allowance for unfunded commitments | 319,000 | 180,000 | |
Fair value adjustment on investments | 1,330,000 | ||
Charitable Contributions | 202,000 | 58,000 | |
Other, net | 720,000 | 324,000 | |
Deferred tax assets | 38,623,000 | 35,082,000 | |
Valuation allowance | (409,000) | ||
Deferred tax assets, net of valuation allowance | 38,623,000 | 34,673,000 | |
Liabilities: | |||
Premises and equipment | 3,522,000 | 1,657,000 | |
Unrealized gain on securities | 412,000 | ||
Mortgage servicing rights | 11,460,000 | 11,424,000 | |
Fair value adjustment on trust preferred debentures | 4,694,000 | 4,700,000 | |
Federal Home Loan Bank stock dividends | 391,000 | 310,000 | |
Deferred loan costs, net of fees | 1,495,000 | ||
Intangible assets | 8,741,000 | 2,729,000 | |
Accounting method changes | 74,000 | 399,000 | |
Prepaid expenses | 708,000 | 796,000 | |
Software development costs | 1,667,000 | ||
Leased equipment | 4,351,000 | ||
Other, net | 269,000 | 222,000 | |
Deferred tax liabilities | 37,372,000 | 22,649,000 | |
Deferred tax assets, net | 12,024,000 | ||
Deferred tax assets (liabilities), net | 1,251,000 | ||
Accumulation of prior year's earnings representing tax bad debt deductions | 3,100,000 | 3,100,000 | |
Write-down of deferred tax assets | $ 4,500,000 | ||
Unrecognized tax benefits | 0 | 0 | |
Interest or penalties relative to unrecognized tax benefits | $ 0 | 0 | |
State tax credit carryforwards Valuation allowance | $ 409,000 | ||
Effect of Tax Cuts and Jobs Act of 2017 | |||
Effective income tax rate | 21.00% | 35.00% | |
Federal | |||
Assets: | |||
Net operating losses | $ 62,600,000 | ||
Liabilities: | |||
Tax credit carryforward | 3,600,000 | ||
State | |||
Liabilities: | |||
Tax credit carryforward | $ 1,000,000 | ||
Period for tax credit carryforward. | 5 years | ||
State | Illinois | |||
Liabilities: | |||
Post-apportioned operating loss carryforward | $ 53,400,000 | ||
State | Missouri | |||
Liabilities: | |||
Pre-apportioned operating loss carryforward | $ 62,600,000 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2017 | |
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 | $ 1,800,000 | 1,200,000 | 1,200,000 | ||||
Director | Deferred Compensation Arrangement | |||||||
Defined Contribution Plan Disclosure [Line Items] | |||||||
Employer's matching contribution, percentage | 25.00% | ||||||
Deferred Compensation Arrangements [Abstract] | |||||||
Deferred compensation arrangement, compensation expense | $ 754,000 | 659,000 | 605,000 | ||||
Deferred compensation arrangement, distributions | 356,000 | 100,000 | 126,000 | ||||
Chief Executive Officer [Member] | Deferred Compensation Arrangement | |||||||
Deferred Compensation Arrangements [Abstract] | |||||||
Deferred compensation arrangement, accrued liability | 282,000 | 210,000 | $ 219,000 | ||||
Chief Executive Officer [Member] | Deferred Compensation Arrangement | Forecast | |||||||
Deferred Compensation Arrangements [Abstract] | |||||||
Deferred compensation arrangement, supplement retirement payments, percentage of final salary | 30.00% | 40.00% | 50.00% | ||||
Other Postretirement Benefit Plan [Member] | |||||||
Deferred Compensation Arrangements [Abstract] | |||||||
Funded status of the plan (market value of assets divided by funding target) | 121.96% | ||||||
Defined benefit plan, minimum required contribution, administrative expense | 122,000 | 121,000 | |||||
Other liabilities. | Director | Deferred Compensation Arrangement | |||||||
Deferred Compensation Arrangements [Abstract] | |||||||
Deferred compensation arrangement, accrued liability | $ 4,200,000 | $ 3,800,000 | |||||
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 - Gran
STOCK BASED COMPENSATION - Grant date using the Black Scholes (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
2010 Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available to be issued | 2,000,000 | ||
Stock option | |||
Fair value of each grant is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions | |||
Dividend yield | 2.50% | 3.00% | |
Expected volatility | 16.63% | 16.98% | |
Risk free interest rate | 2.12% | 1.64% | |
Expected life | 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 - stoc
STOCK BASED COMPENSATION - stock option plan (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average exercise price | |||
Total unrecognized compensation (in years) | 1 year 8 months 12 days | ||
Stock option | |||
Number of shares | |||
Options outstanding, beginning of year (in shares) | 1,148,537 | 1,319,259 | |
Options granted (in shares) | 31,259 | ||
Options exercised (in shares) | (108,344) | (179,760) | |
Options forfeited (in shares) | (34,049) | (22,221) | |
Options outstanding, end of year (in shares) | 1,006,144 | 1,148,537 | 1,319,259 |
Options exercisable (in shares) | 885,817 | 673,706 | |
Options vested and expected to vest (in shares) | 991,774 | 1,088,853 | |
Weighted average exercise price | |||
Options outstanding, beginning of year (in dollars per share) | $ 19.39 | $ 18.73 | |
Options granted (in dollars per share) | 32.89 | ||
Options exercised (in dollars per share) | 16.42 | 16.02 | |
Options forfeited (in dollars per share) | 26.27 | 26.08 | |
Options outstanding, end of year (in dollars per share) | 19.48 | 19.39 | $ 18.73 |
Options exercisable (in dollars per share) | 18.53 | 17.55 | |
Options vested and expected to vest (in dollars per share) | $ 19.38 | $ 19.27 | |
Options outstanding, end of year (in years) | 4 years 10 months 24 days | 5 years 9 months 18 days | |
Options exercisable (in years) | 4 years 7 months 6 days | 4 years 7 months 6 days | |
Options vested and expected to vest (in years) | 4 years 10 months 24 days | 5 years 8 months 12 days | |
Aggregate intrinsic value of options outstanding | $ 3,800,000 | ||
Aggregate intrinsic value of options exercisable | 3,800,000 | ||
Total unrecognized compensation | 311,000 | ||
Weighted average fair value of options granted | $ 4.33 | $ 2.94 | |
Total intrinsic value from options exercised | 1,600,000 | $ 2,300,000 | $ 971,000 |
Cash received from options exercised | $ 1,800,000 | $ 2,900,000 | $ 890,000 |
STOCK BASED COMPENSATION - Nonv
STOCK BASED COMPENSATION - Nonvested stock option (Details) - Stock option - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares | ||
Nonvested at December 31, 2015 (in shares) | 474,831 | |
Granted (in shares) | 31,259 | |
Vested (in shares) | (324,508) | |
Forfeited (in shares) | (29,996) | |
Nonvested at December 31, 2016 (in shares) | 120,327 | 474,831 |
Weighted average grant date fair value | ||
Nonvested at December 31, 2015 (in dollars per shares) | $ 2.83 | |
Vested (in dollars per shares) | 2.72 | |
Forfeited (in dollars per shares) | 2.91 | |
Nonvested at December 31, 2016 (in dollars per shares) | $ 3.11 | $ 2.83 |
STOCK BASED COMPENSATION - Rest
STOCK BASED COMPENSATION - Restricted stock awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Weighted average grant date fair value | ||||
Total unrecognized compensation (in years) | 1 year 8 months 12 days | |||
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Number outstanding | ||||
Granted during the year (in shares) | 138,683 | 70,951 | ||
Weighted average grant date fair value | ||||
Nonvested at December 31, 2015 (in dollars per shares) | $ 31.03 | $ 27.38 | ||
Nonvested at December 31, 2016 (in dollars per shares) | $ 28.47 | 31.03 | $ 27.38 | |
Total unrecognized compensation | $ 5.3 | |||
Total unrecognized compensation (in years) | 3 years 3 months 18 days | |||
Weighted average grant date fair value for restricted stock awards | $ 31.03 | $ 27.38 | $ 27.38 | $ 28.47 |
Compensation cost that has been charged against income | $ 1.8 | $ 1.8 | $ 1.1 | |
Restricted Stock Units (RSUs) | ||||
Number outstanding | ||||
Granted during the year (in shares) | 12,965 | |||
Restricted Stock And Restricted Stock Unit Awards [Member] | ||||
Number outstanding | ||||
Nonvested at December 31, 2015 (in shares) | 149,368 | |||
Granted during the year (in shares) | 138,683 | |||
Vested during the year (in shares) | (56,907) | |||
Forfeited during the year (in shares) | (33,427) | |||
Nonvested at December 31, 2016 (in shares) | 197,717 | 149,368 | ||
Weighted average grant date fair value | ||||
Nonvested at December 31, 2015 (in dollars per shares) | $ 28.83 | |||
Granted during the year (in dollars per shares) | 28.47 | |||
Vested during the year (in dollars per shares) | 27.95 | |||
Forfeited during the year (in dollars per shares) | 30.17 | |||
Nonvested at December 31, 2016 (in dollars per shares) | 28.61 | $ 28.83 | ||
Weighted average grant date fair value for restricted stock awards | $ 28.83 | $ 28.83 | $ 28.61 |
PREFERRED STOCK (Details).
PREFERRED STOCK (Details). - USD ($) $ / shares in Units, $ in Thousands | Jun. 09, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value of preferred stock issued | $ 2,781 | $ 2,970 | |
Series G Preferred Stock | |||
Dividend rate, per-dollar-amount | $ 60 | ||
Series H Preferred Stock | |||
Fair value of preferred stock issued | $ 3,100 | ||
Dividend rate | 12.50% | ||
Redemption price per share | $ 1,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock option | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 31,259 | 662 | 114,648 |
EARNINGS PER SHARE (Details 2)
EARNINGS PER SHARE (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
EARNINGS PER SHARE | |||||||||||
Net income | $ 39,421 | $ 16,056 | $ 31,542 | ||||||||
Preferred dividends declared | (330) | (184) | |||||||||
Preferred stock, premium amortization | 189 | 101 | |||||||||
Net income available to common shareholders | $ 16,302 | $ 8,462 | $ 12,746 | $ 1,770 | 39,280 | 15,973 | 31,542 | ||||
Common shareholder dividends | (19,838) | (13,922) | (9,797) | ||||||||
Unvested restricted stock award dividends | (139) | (86) | (56) | ||||||||
Undistributed earnings to unvested restricted stock awards | (123) | (11) | (110) | ||||||||
Undistributed earnings to common shareholders | 19,180 | 1,954 | 21,579 | ||||||||
Basic | |||||||||||
Common shareholder dividends | (19,838) | (13,922) | (9,797) | ||||||||
Undistributed earnings to common shareholders | 19,180 | 1,954 | 21,579 | ||||||||
Net income available to common shareholders | 39,018 | 15,876 | 31,376 | ||||||||
Diluted | |||||||||||
Common shareholder dividends | (19,838) | (13,922) | (9,797) | ||||||||
Undistributed earnings to common shareholders | 19,180 | 1,954 | 21,579 | ||||||||
Net income available to common shareholders | 39,018 | 15,876 | 31,376 | ||||||||
Add back: | |||||||||||
Undistributed earnings reallocated from unvested restricted stock awards | 2 | 2 | |||||||||
Total common shareholders earnings, diluted | $ 39,020 | $ 15,876 | $ 31,378 | ||||||||
Weighted average common shares outstanding, basic (In shares) | 23,130,475 | 17,781,631 | 14,130,552 | ||||||||
Options and warrants | 418,550 | 501,583 | 298,287 | ||||||||
Weighted average common shares outstanding, diluted (In shares) | 23,549,025 | 18,283,214 | 14,428,839 | ||||||||
Basic earnings per common share (In dollars per share) | $ 0.68 | $ 0.35 | $ 0.53 | $ 0.08 | $ 0.10 | $ 0.10 | $ 0.21 | $ 0.54 | $ 1.69 | $ 0.89 | $ 2.22 |
Diluted earnings per common share (In dollars per share) | $ 0.67 | $ 0.35 | $ 0.52 | $ 0.08 | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.52 | $ 1.66 | $ 0.87 | $ 2.17 |
CAPITAL REQUIREMENTS (Details)
CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capital requirements and restrictions on dividends | |||
Minimum capital conservation buffer percentage | 1.875% | 1.25% | |
Total Capital (to Risk Weighted Assets): Actual Amount | $ 584,409 | $ 478,914 | |
Total Capital (to Risk Weighted Assets): Actual Ratio | 12.79% | 13.26% | |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 365,547 | $ 288,895 | |
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 | $ 468,212 | $ 367,841 | |
Tier I Capital (to Risk Weighted Assets): Actual Ratio | 10.25% | 10.19% | |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 274,160 | $ 216,671 | |
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 | $ 400,480 | $ 304,974 | |
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio | 8.76% | 8.45% | |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount | $ 205,620 | $ 162,503 | |
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 | $ 468,212 | $ 367,841 | |
Tier I Capital (to Average Assets): Actual Ratio | 8.53% | 8.63% | |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount | $ 219,602 | $ 170,566 | |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Ratio | 4.00% | 4.00% | |
Forecast | |||
Capital requirements and restrictions on dividends | |||
Minimum capital conservation buffer percentage | 2.50% | ||
Midland States Bank | |||
Capital requirements and restrictions on dividends | |||
Total Capital (to Risk Weighted Assets): Actual Amount | $ 583,465 | $ 445,285 | |
Total Capital (to Risk Weighted Assets): Actual Ratio | 12.76% | 12.32% | |
Total Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 365,894 | $ 289,252 | |
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 | $ 457,368 | $ 361,565 | |
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 | $ 561,402 | $ 428,184 | |
Tier I Capital (to Risk Weighted Assets): Actual Ratio | 12.27% | 11.84% | |
Tier I Capital (to Risk Weighted Assets): Minimum Required For Adequate Capital Purposes Amount | $ 274,421 | $ 216,939 | |
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 | $ 365,894 | $ 289,252 | |
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 | $ 561,402 | $ 428,184 | |
Common equity Tier 1 capital (to risk-weighted assets): Actual Ratio | 12.27% | 11.84% | |
Common equity Tier 1 capital (to risk-weighted assets): Minimum Required for adequate capital Amount | $ 205,815 | $ 162,704 | |
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 | $ 297,289 | $ 235,017 | |
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 | $ 561,402 | $ 428,184 | |
Tier I Capital (to Average Assets): Actual Ratio | 10.22% | 10.04% | |
Tier I Capital (to Average Assets): Minimum Required For Adequate Capital Purposes Amount | $ 219,622 | $ 170,608 | |
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 | $ 274,528 | $ 213,260 | |
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 INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring and Nonrecurring basis (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Oct. 04, 2016 | |
Assets and liabilities measured at fair value on a recurring basis: | |||||
Transfer of assets between level 1 to 2 | $ 0 | $ 0 | |||
Transfer of assets between level 2 to 1 | 0 | 0 | |||
Transfer of assets into level 3 | 0 | ||||
Transfer of assets out of level 3 | 0 | ||||
Assets | |||||
Investment securities available for sale | 657,451 | $ 450,525 | 657,451 | ||
Equity securities | 3,334 | 3,334 | |||
Loans held for sale | 30,401 | 50,087 | 30,401 | ||
Assets measured at fair value on a non-recurring basis: | |||||
Mortgage servicing rights held for sale | 3,545 | 10,176 | 3,545 | ||
Losses recognized on assets measured on non-recurring basis | |||||
Mortgage servicing rights | (449) | 2,324 | $ 3,135 | ||
Mortgage servicing rights held for sale | 458 | 4,059 | |||
Impaired loans | 5,800 | 7,096 | 2,459 | ||
Other real estate owned | 301 | 253 | 247 | ||
Assets held for sale | 1,516 | 1,646 | |||
Total loss on assets measured on a nonrecurring basis | 6,559 | 15,248 | $ 7,487 | ||
U.S. Treasury securities | |||||
Assets | |||||
Investment securities available for sale | 24,650 | 27,718 | 24,650 | ||
Government sponsored entity debt securities | |||||
Assets | |||||
Investment securities available for sale | 75,684 | 25,211 | 75,684 | ||
State and municipal securities | |||||
Assets | |||||
Investment securities available for sale | 159,262 | 102,567 | 159,262 | ||
Corporate Securities | |||||
Assets | |||||
Investment securities available for sale | 71,550 | 59,812 | 71,550 | ||
Equity Security | |||||
Assets | |||||
Investment securities available for sale | 3,334 | 2,830 | 3,334 | ||
Covered non-agency mortgage-backed securities | |||||
Assets | |||||
Investment securities available for sale | $ 72,100 | ||||
Level 1 | |||||
Assets | |||||
Investment securities available for sale | 24,650 | 27,718 | 24,650 | ||
Level 2 | |||||
Assets | |||||
Investment securities available for sale | 634,212 | 418,028 | 634,212 | ||
Loans held for sale | 30,401 | 50,089 | 30,401 | ||
Level 2 | Interest rate lock commitments | |||||
Assets | |||||
Derivative Assets | 4,492 | 6,331 | 4,492 | ||
Level 2 | Forward commitments to sell mortgage-backed securities | |||||
Assets | |||||
Derivative Assets | 31 | ||||
Level 2 | Interest rate swap contracts | |||||
Assets | |||||
Derivative Assets | 145 | 17 | 145 | ||
Liabilities | |||||
Derivative liability | 145 | 17 | 145 | ||
Level 3 | |||||
Assets | |||||
Investment securities available for sale | 1,923 | 4,779 | 1,923 | ||
Recurring member | |||||
Assets | |||||
Loans held for sale | 30,401 | 50,089 | 30,401 | ||
Total Assets | 695,823 | 506,993 | 695,823 | ||
Recurring member | U.S. Treasury securities | |||||
Assets | |||||
Investment securities available for sale | 24,650 | 27,718 | 24,650 | ||
Recurring member | Government sponsored entity debt securities | |||||
Assets | |||||
Investment securities available for sale | 75,684 | 25,211 | 75,684 | ||
Recurring member | Agency mortgage-backed securities | |||||
Assets | |||||
Investment securities available for sale | 326,305 | 232,387 | 326,305 | ||
Recurring member | State and municipal securities | |||||
Assets | |||||
Investment securities available for sale | 159,262 | 102,567 | 159,262 | ||
Recurring member | Corporate Securities | |||||
Assets | |||||
Investment securities available for sale | 71,550 | 59,812 | 71,550 | ||
Recurring member | Equity Security | |||||
Assets | |||||
Equity securities | 3,334 | 2,830 | 3,334 | ||
Recurring member | Interest rate lock commitments | |||||
Assets | |||||
Derivative Assets | 4,492 | 6,331 | 4,492 | ||
Recurring member | Forward commitments to sell mortgage-backed securities | |||||
Assets | |||||
Derivative Assets | 31 | ||||
Recurring member | Interest rate swap contracts | |||||
Assets | |||||
Derivative Assets | 145 | 17 | 145 | ||
Liabilities | |||||
Derivative liability | 145 | 17 | 145 | ||
Recurring member | Level 1 | |||||
Assets | |||||
Total Assets | 24,650 | 27,718 | 24,650 | ||
Recurring member | Level 1 | U.S. Treasury securities | |||||
Assets | |||||
Investment securities available for sale | 24,650 | 27,718 | 24,650 | ||
Recurring member | Level 2 | |||||
Assets | |||||
Loans held for sale | 30,401 | 50,089 | 30,401 | ||
Total Assets | 669,250 | 474,496 | 669,250 | ||
Recurring member | Level 2 | Government sponsored entity debt securities | |||||
Assets | |||||
Investment securities available for sale | 75,684 | 25,211 | 75,684 | ||
Recurring member | Level 2 | Agency mortgage-backed securities | |||||
Assets | |||||
Investment securities available for sale | 326,305 | 232,387 | 326,305 | ||
Recurring member | Level 2 | State and municipal securities | |||||
Assets | |||||
Investment securities available for sale | 159,262 | 102,567 | 159,262 | ||
Recurring member | Level 2 | Corporate Securities | |||||
Assets | |||||
Investment securities available for sale | 69,627 | 55,033 | 69,627 | ||
Recurring member | Level 2 | Equity Security | |||||
Assets | |||||
Equity securities | 3,334 | 2,830 | 3,334 | ||
Recurring member | Level 2 | Interest rate lock commitments | |||||
Assets | |||||
Derivative Assets | 4,492 | 6,331 | 4,492 | ||
Recurring member | Level 2 | Forward commitments to sell mortgage-backed securities | |||||
Assets | |||||
Derivative Assets | 31 | ||||
Recurring member | Level 2 | Interest rate swap contracts | |||||
Assets | |||||
Derivative Assets | 145 | 17 | 145 | ||
Liabilities | |||||
Derivative liability | 145 | 17 | 145 | ||
Recurring member | Level 3 | |||||
Assets | |||||
Total Assets | 1,923 | 4,779 | 1,923 | ||
Recurring member | Level 3 | Corporate Securities | |||||
Assets | |||||
Investment securities available for sale | 1,923 | 4,779 | 1,923 | ||
Non recurring member | |||||
Assets measured at fair value on a non-recurring basis: | |||||
Mortgage servicing rights | 53,447 | 56,352 | 53,447 | ||
Mortgage servicing rights held for sale | 3,545 | 10,176 | 3,545 | ||
Impaired loans | 11,238 | 9,385 | 11,238 | ||
Other real estate owned | 1,439 | 801 | 1,439 | ||
Assets held for sale | 1,687 | 3,358 | 1,687 | ||
Non recurring member | Level 1 | |||||
Assets measured at fair value on a non-recurring basis: | |||||
Mortgage servicing rights held for sale | 3,545 | 10,176 | 3,545 | ||
Non recurring member | Level 2 | |||||
Assets measured at fair value on a non-recurring basis: | |||||
Impaired loans | 9,226 | 7,631 | 9,226 | ||
Other real estate owned | 1,439 | 801 | 1,439 | ||
Assets held for sale | 1,687 | 3,358 | 1,687 | ||
Non recurring member | Level 3 | |||||
Assets measured at fair value on a non-recurring basis: | |||||
Mortgage servicing rights | 53,447 | 56,352 | 53,447 | ||
Impaired loans | $ 2,012 | $ 1,754 | $ 2,012 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS- Unobservable inputs (Level 3) (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Transferred to Level 2 | $ 0 | ||
Corporate Securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | $ 4,779 | $ 7,480 | 7,480 |
Total realized in earnings | 242 | 289 | |
Total unrealized in other comprehensive income | (36) | 264 | |
Net settlements (principal and interest) | (3,062) | (3,254) | |
Ending balance | $ 1,923 | 4,779 | 1,923 |
Non-agency mortgage-backed securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | 1 | $ 1 | |
Net settlements (principal and interest) | $ (1) |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS- Quantitative Information (Details) - Non recurring member | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights | $ 53,447,000 | $ 56,352,000 |
Impaired loans | 11,238,000 | 9,385,000 |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights | 53,447,000 | 56,352,000 |
Impaired loans | $ 2,012,000 | $ 1,754,000 |
Level 3 | Mortgage servicing rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Valuation technique for servicing asset | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Level 3 | Discounted cash flow | Mortgage servicing rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights | $ 56,352,000 | |
Level 3 | Discounted cash flow | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights | $ 53,447,000 | |
Level 3 | Fair value of collateral | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 2,012,000 | $ 1,754,000 |
Minimum | Level 3 | Measurement Input, Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | 0.10 | 0.08 |
Minimum | Level 3 | Measurement Input, Prepayment Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | item | 0.08 | 0.0636 |
Minimum | Level 3 | Measurement Input, Discount for type of property, age of appraisal and current status | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for impaired loans | 0.0500 | 0.0484 |
Maximum | Level 3 | Measurement Input, Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | item | 0.27 | 0.1450 |
Maximum | Level 3 | Measurement Input, Prepayment Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | 0.18 | 42.90 |
Maximum | Level 3 | Measurement Input, Discount for type of property, age of appraisal and current status | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for impaired loans | 0.0726 | 0.1824 |
Weighted average | Level 3 | Measurement Input, Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | item | 0.1112 | 0.1118 |
Weighted average | Level 3 | Measurement Input, Prepayment Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for servicing asset | item | 0.0824 | 0.0883 |
Weighted average | Level 3 | Measurement Input, Discount for type of property, age of appraisal and current status | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input for impaired loans | 0.0526 | 0.0864 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS- Fair value option and gains and losses from fair value changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate fair value | $ 30,401 | $ 50,087 |
Difference | 1,079 | 717 |
Contractual principal | 29,322 | 49,370 |
Gains and losses from fair value changes | ||
Gains and losses from fair value changes of loan held for sales | 258 | (724) |
Residential loans held for sale | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate fair value | 8,121 | 12,241 |
Difference | 484 | 374 |
Contractual principal | 7,637 | 11,867 |
Gains and losses from fair value changes | ||
Gains and losses from fair value changes of loan held for sales | 6 | (74) |
Commercial real estate | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate fair value | 22,280 | 37,846 |
Difference | 595 | 343 |
Contractual principal | 21,685 | 37,503 |
Gains and losses from fair value changes | ||
Gains and losses from fair value changes of loan held for sales | $ 252 | $ (650) |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS- Carrying values and fair value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | |||
Investment securities available for sale | $ 657,451 | $ 450,525 | |
Equity securities | 3,334 | ||
Loans held for sale | 30,401 | 50,087 | |
Accrued interest receivable | 16,560 | 11,715 | |
Liabilities | |||
Trust preferred debentures | 47,794 | 47,330 | |
Accrued interest payable | 4,855 | 2,531 | |
Fair value, additional information | |||
Other-than-temporary impairment on investment securities | $ 824 | ||
Level 1 | |||
Assets | |||
Cash and due from banks | 210,780 | 214,519 | |
Federal funds sold | 2,920 | 683 | |
Investment securities available for sale | 24,650 | 27,718 | |
Level 2 | |||
Assets | |||
Investment securities available for sale | 634,212 | 418,028 | |
Nonmarketable equity securities | 42,472 | 34,796 | |
Loans held for sale | 30,401 | 50,089 | |
Accrued interest receivable | 16,560 | 11,715 | |
Liabilities | |||
Deposits | 4,069,098 | 3,127,626 | |
Short-term borrowings | 124,235 | 156,126 | |
FHLB and other borrowings | 641,050 | 494,634 | |
Subordinated debt | 91,926 | 90,860 | |
Trust preferred debentures | 56,805 | 46,069 | |
Accrued interest payable | 4,855 | ||
Level 3 | |||
Assets | |||
Investment securities available for sale | 1,923 | 4,779 | |
Loans, net | 4,091,438 | 3,200,016 | |
Carrying value | |||
Assets | |||
Cash and due from banks | 210,780 | 214,519 | |
Federal funds sold | 2,920 | 683 | |
Investment securities available for sale | 660,785 | 450,525 | |
Nonmarketable equity securities | 42,472 | 34,796 | |
Loans, net | 4,116,648 | 3,210,247 | |
Loans held for sale | 30,401 | 50,089 | |
Accrued interest receivable | 16,560 | 11,715 | |
Liabilities | |||
Deposits | 4,074,170 | 3,131,089 | |
Short-term borrowings | 124,235 | 156,126 | |
FHLB and other borrowings | 640,631 | 496,436 | |
Subordinated debt | 94,134 | 93,972 | |
Trust preferred debentures | 47,794 | 45,379 | |
Accrued interest payable | 4,855 | ||
Fair value | |||
Assets | |||
Cash and due from banks | 210,780 | 214,519 | |
Federal funds sold | 2,920 | 683 | |
Investment securities available for sale | 660,785 | 450,525 | |
Nonmarketable equity securities | 42,472 | 34,796 | |
Loans, net | 4,091,438 | 3,200,016 | |
Loans held for sale | 30,401 | 50,089 | |
Accrued interest receivable | 16,560 | 11,715 | |
Liabilities | |||
Deposits | 4,069,098 | 3,127,626 | |
Short-term borrowings | 124,235 | 156,126 | |
FHLB and other borrowings | 641,050 | 494,634 | |
Subordinated debt | 91,926 | 90,860 | |
Trust preferred debentures | 56,805 | 46,069 | |
Accrued interest payable | 4,855 | ||
Interest rate lock commitments | Level 2 | |||
Assets | |||
Derivative Assets | 4,492 | 6,331 | |
Interest rate lock commitments | Carrying value | |||
Assets | |||
Derivative Assets | 4,492 | 6,331 | |
Interest rate lock commitments | Fair value | |||
Assets | |||
Derivative Assets | 4,492 | 6,331 | |
Forward commitments to sell mortgage-backed securities | Level 2 | |||
Assets | |||
Derivative Assets | 31 | ||
Forward commitments to sell mortgage-backed securities | Carrying value | |||
Assets | |||
Derivative Assets | 31 | ||
Forward commitments to sell mortgage-backed securities | Fair value | |||
Assets | |||
Derivative Assets | 31 | ||
Interest rate swap contracts | Level 2 | |||
Assets | |||
Derivative Assets | 145 | 17 | |
Liabilities | |||
Accrued interest payable | 2,531 | ||
Derivative Liability | 145 | 17 | |
Interest rate swap contracts | Carrying value | |||
Assets | |||
Derivative Assets | 145 | 17 | |
Liabilities | |||
Accrued interest payable | 2,531 | ||
Derivative Liability | 145 | 17 | |
Interest rate swap contracts | Fair value | |||
Assets | |||
Derivative Assets | 145 | 17 | |
Liabilities | |||
Accrued interest payable | 2,531 | ||
Derivative Liability | 145 | 17 | |
Corporate Securities | |||
Assets | |||
Investment securities available for sale | $ 71,550 | $ 59,812 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND CREDIT RISK - Minimum Rental Payments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Anticipated material loss | $ 0 | ||
Net rent expense under operating leases | 3,200,000 | $ 2,700,000 | $ 2,400,000 |
Losses as a result of make whole requests and loan repurchases | 11,000 | 17,000 | $ 83,000 |
Liability for unresolved repurchase demands | 492,000 | 371,000 | |
Minimum rental payments under the terms of leases | |||
2,019 | 2,878,000 | ||
2,020 | 2,361,000 | ||
2,021 | 2,193,000 | ||
2,022 | 1,955,000 | ||
2,023 | 1,397,000 | ||
Thereafter | 2,249,000 | ||
Total estimated lease payments | 13,033,000 | ||
Commitments to extend credit | |||
Loan commitments | 663,555,000 | 568,356,000 | |
Financial guarantees - standby letters of credit | |||
Loan commitments | $ 142,859,000 | $ 142,189,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net interest income (expense) | $ 48,535 | $ 45,081 | $ 48,286 | $ 38,185 | $ 36,036 | $ 36,765 | $ 29,400 | $ 27,461 | $ 180,087 | $ 129,662 | $ 105,254 |
Provision for loan losses | 3,467 | 2,103 | 1,854 | 2,006 | 6,076 | 1,489 | 458 | 1,533 | 9,430 | 9,556 | 5,591 |
Noninterest income | 21,170 | 18,272 | 15,847 | 16,502 | 13,998 | 15,403 | 13,619 | 16,342 | 71,791 | 59,362 | 72,057 |
Noninterest expense | 45,375 | 50,317 | 46,452 | 49,499 | 36,192 | 48,363 | 37,645 | 30,797 | 191,643 | 152,997 | 121,289 |
Income (loss) before income taxes (benefit) | 20,863 | 10,933 | 15,827 | 3,182 | 7,766 | 2,316 | 4,916 | 11,473 | 50,805 | 26,471 | 50,431 |
Income taxes (benefit) | 4,527 | $ 2,436 | $ 3,045 | $ 1,376 | 5,775 | $ 280 | $ 1,377 | $ 2,983 | 11,384 | 10,415 | 18,889 |
Net income (loss) | 39,421 | 16,056 | 31,542 | ||||||||
Total assets | 5,637,673 | 4,412,701 | 5,637,673 | 4,412,701 | 3,233,723 | ||||||
Commercial FHA origination and servicing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net interest income (expense) | (422) | 312 | 1,003 | ||||||||
Noninterest income | 11,457 | 18,570 | 22,979 | ||||||||
Noninterest expense | 15,058 | 13,729 | 15,104 | ||||||||
Income (loss) before income taxes (benefit) | (4,023) | 5,153 | 8,878 | ||||||||
Income taxes (benefit) | (979) | (1,033) | 3,332 | ||||||||
Net income (loss) | (3,044) | 6,186 | 5,546 | ||||||||
Total assets | 91,108 | 99,685 | 91,108 | 99,685 | 129,943 | ||||||
Wealth management | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net interest income (expense) | 298 | 524 | |||||||||
Noninterest income | 20,484 | 13,339 | 8,073 | ||||||||
Noninterest expense | 11,680 | 8,823 | 6,533 | ||||||||
Income (loss) before income taxes (benefit) | 9,102 | 5,040 | 1,540 | ||||||||
Income taxes (benefit) | 514 | 423 | 115 | ||||||||
Net income (loss) | 8,588 | 4,617 | 1,425 | ||||||||
Total assets | 18,218 | 15,979 | 18,218 | 15,979 | 5,550 | ||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net interest income (expense) | (10,672) | (7,148) | (5,699) | ||||||||
Noninterest income | (463) | (502) | (50) | ||||||||
Noninterest expense | (839) | 819 | 649 | ||||||||
Income (loss) before income taxes (benefit) | (10,296) | (8,469) | (6,398) | ||||||||
Income taxes (benefit) | (2,305) | (6,077) | (1,687) | ||||||||
Net income (loss) | (7,991) | (2,392) | (4,711) | ||||||||
Total assets | (43,405) | (39,264) | (43,405) | (39,264) | (72,400) | ||||||
Banking | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net interest income (expense) | 190,883 | 135,974 | 109,950 | ||||||||
Provision for loan losses | 9,430 | 9,556 | 5,591 | ||||||||
Noninterest income | 40,313 | 27,955 | 41,055 | ||||||||
Noninterest expense | 165,744 | 129,626 | 99,003 | ||||||||
Income (loss) before income taxes (benefit) | 56,022 | 24,747 | 46,411 | ||||||||
Income taxes (benefit) | 14,154 | 17,102 | 17,129 | ||||||||
Net income (loss) | 41,868 | 7,645 | 29,282 | ||||||||
Total assets | $ 5,571,752 | $ 4,336,301 | $ 5,571,752 | $ 4,336,301 | $ 3,170,630 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||
Rent paid | $ 712,000 | $ 719,000 | $ 706,000 |
Former member of board of directors | |||
Related Party Transaction [Line Items] | |||
Number of the bank's full-service branch facilities | item | 3 | ||
One Of The Board Of Directors | |||
Related Party Transaction [Line Items] | |||
Payments to related party | $ 116,000 | ||
Chairman | |||
Related Party Transaction [Line Items] | |||
Payments to related party | 418,000 | $ 20,000 | $ 161,000,000,000 |
Related Party Operating Lease Member | |||
Related Party Transaction [Line Items] | |||
Rent paid | $ 42,000 |
REVENUE FROM CONTRACT WITH CU_3
REVENUE FROM CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - out-of-scope of Topic 606 | $ 25,579 | ||||||||||
Total noninterest income | $ 21,170 | $ 18,272 | $ 15,847 | $ 16,502 | $ 13,998 | $ 15,403 | $ 13,619 | $ 16,342 | $ 71,791 | $ 59,362 | $ 72,057 |
Contract Acquisition Costs | |||||||||||
Practical expedient, amortization period | 1 year | 1 year | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - out-of-scope of Topic 606 | 31,722 | 52,800 | |||||||||
Total noninterest income | 59,362 | 72,057 | |||||||||
Trust management/administration fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | $ 16,099 | ||||||||||
Trust management/administration fees | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 9,751 | 5,985 | |||||||||
Investment advisory fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 2,041 | ||||||||||
Investment advisory fees | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,364 | ||||||||||
Investment brokerage fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,065 | ||||||||||
Investment brokerage fees | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,388 | 1,324 | |||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,308 | ||||||||||
Other | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 837 | 782 | |||||||||
Nonsufficient fund fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 7,672 | ||||||||||
Nonsufficient fund fees | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 4,193 | 2,562 | |||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 2,768 | ||||||||||
Other | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,782 | 1,342 | |||||||||
Interchange revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 10,674 | ||||||||||
Interchange revenues | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 5,353 | 3,750 | |||||||||
Merchant services revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,650 | ||||||||||
Merchant services revenue | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | 1,103 | 1,697 | |||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | $ 2,935 | ||||||||||
Other | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Noninterest income - in-scope of Topic 606 | $ 1,869 | $ 1,815 |
PARENT COMPANY ONLY FINANCIAL_3
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Financial Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Accrued income taxes receivable | $ 8,809 | $ 8,358 | ||
Other assets | 50,900 | 42,425 | ||
Total assets | 5,637,673 | 4,412,701 | $ 3,233,723 | |
Liabilities: | ||||
Subordinated debt | 94,134 | 93,972 | ||
Trust preferred debentures | 47,794 | 47,330 | ||
Other liabilities | 43,329 | 35,672 | ||
Total liabilities | 5,029,148 | 3,963,156 | ||
Shareholders' equity | 608,525 | 449,545 | $ 321,770 | $ 232,880 |
Total liabilities and shareholders' equity | 5,637,673 | 4,412,701 | ||
Midland States Bancorp, Inc | ||||
Assets | ||||
Cash | 20,312 | 60,424 | ||
Investment in common stock of subsidiaries | 764,483 | 563,541 | ||
Accrued income taxes receivable | 3,300 | |||
Other assets | 2,330 | 2,303 | ||
Total assets | 787,125 | 629,568 | ||
Liabilities: | ||||
Subordinated debt | 94,134 | 93,972 | ||
Trust preferred debentures | 47,794 | 47,330 | ||
Other borrowings | 33,021 | 37,294 | ||
Accrued income taxes payable | 778 | |||
Deferred tax liabilities, net | 972 | 252 | ||
Other liabilities | 1,901 | 1,175 | ||
Total liabilities | 178,600 | 180,023 | ||
Shareholders' equity | 608,525 | 449,545 | ||
Total liabilities and shareholders' equity | $ 787,125 | $ 629,568 |
PARENT COMPANY ONLY FINANCIAL_4
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Statements of Income | |||||||||||
Interest expense | $ (13,057) | $ (11,906) | $ (9,997) | $ (8,320) | $ (7,464) | $ (6,481) | $ (5,128) | $ (4,378) | $ (43,280) | $ (23,451) | $ (15,995) |
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries | 20,863 | 10,933 | 15,827 | 3,182 | 7,766 | 2,316 | 4,916 | 11,473 | 50,805 | 26,471 | 50,431 |
Income tax benefit | $ (4,527) | $ (2,436) | $ (3,045) | $ (1,376) | $ (5,775) | $ (280) | $ (1,377) | $ (2,983) | (11,384) | (10,415) | (18,889) |
Net income | 39,421 | 16,056 | 31,542 | ||||||||
Midland States Bancorp, Inc | |||||||||||
Condensed Statements of Income | |||||||||||
Dividends received from subsidiaries | 17,000 | 19,500 | |||||||||
Other income | 6 | 4 | 428 | ||||||||
Interest expense | (10,714) | (7,162) | (5,699) | ||||||||
Other expense | (1,180) | (1,295) | (1,130) | ||||||||
Income (loss) before income taxes and equity in undistributed (loss) income of subsidiaries | 5,112 | 11,047 | (6,401) | ||||||||
Income tax benefit | 2,312 | 6,080 | 1,687 | ||||||||
Income (loss) after income taxes and before equity in undistributed (loss) income of subsidiaries | 7,424 | 17,127 | (4,714) | ||||||||
Equity in undistributed (loss) income of subsidiaries | 31,997 | (1,071) | 36,256 | ||||||||
Net income | $ 39,421 | $ 16,056 | $ 31,542 |
PARENT COMPANY ONLY FINANCIAL_5
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 16,336 | $ 8,497 | $ 12,782 | $ 1,806 | $ 1,991 | $ 2,036 | $ 3,539 | $ 8,490 | $ 39,421 | $ 16,056 | $ 31,542 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Amortization of restricted stock awards | 1,199 | 836 | 555 | ||||||||
Compensation expense for stock option grants | 334 | 548 | 492 | ||||||||
Change in other assets | (5,712) | 5,189 | (6,399) | ||||||||
Change in other liabilities | 3,783 | (2,835) | (313) | ||||||||
Net cash provided by operating activities | 97,060 | 70,449 | 24,126 | ||||||||
Cash flows from investing activities: | |||||||||||
Net cash acquired (paid) in acquisitions | 36,153 | (18,519) | (5,191) | ||||||||
Net cash used in investing activities | (6,661) | (234,607) | (359,062) | ||||||||
Cash flows from financing activities: | |||||||||||
Payments made on subordinated debt | (8,000) | ||||||||||
Proceeds from issuance of subordinated debt | 39,354 | ||||||||||
Proceeds from other borrowings, net of issuance costs | 39,964 | ||||||||||
Payments made on other borrowings | (4,286) | (3,198) | |||||||||
Cash dividends paid on preferred stock | (330) | (184) | |||||||||
Cash dividends paid on common stock | (19,977) | (14,008) | (9,853) | ||||||||
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 | 2,278 | 3,225 | 1,318 | ||||||||
Net cash (used in) provided by financing activities | (91,901) | 188,644 | 313,177 | ||||||||
Cash and cash equivalents: | |||||||||||
Beginning of year | 215,202 | 215,202 | |||||||||
End of year | 213,700 | 215,202 | 213,700 | 215,202 | |||||||
Midland States Bancorp, Inc | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 39,421 | 16,056 | 31,542 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in undistributed loss (income) of subsidiaries | (31,997) | 1,071 | (36,256) | ||||||||
Amortization of restricted stock awards | 1,199 | 836 | 555 | ||||||||
Compensation expense for stock option grants | 334 | 548 | 492 | ||||||||
Change in other assets | 3,273 | (3,226) | 4,237 | ||||||||
Change in other liabilities | 2,863 | 1,649 | 225 | ||||||||
Net cash provided by operating activities | 15,093 | 16,934 | 795 | ||||||||
Cash flows from investing activities: | |||||||||||
Net cash acquired (paid) in acquisitions | (32,890) | (60,457) | |||||||||
Capital injection to subsidiaries | (350) | (25,250) | |||||||||
Net cash used in investing activities | (32,890) | (60,807) | (25,250) | ||||||||
Cash flows from financing activities: | |||||||||||
Payments made on subordinated debt | (8,000) | ||||||||||
Proceeds from issuance of subordinated debt | 39,354 | ||||||||||
Proceeds from other borrowings, net of issuance costs | 39,964 | ||||||||||
Payments made on other borrowings | (4,286) | (2,857) | |||||||||
Cash dividends paid on preferred stock | (330) | (184) | (9,853) | ||||||||
Cash dividends paid on common stock | (19,977) | (14,008) | |||||||||
Proceeds from issuance of common stock in initial public offering, net of issuance costs | 71,475 | ||||||||||
Proceeds from issuance of common stock under employee benefit plans | 2,278 | 3,225 | 1,318 | ||||||||
Net cash (used in) provided by financing activities | (22,315) | 65,494 | 54,940 | ||||||||
Net increase (decrease) in cash | (40,112) | 21,621 | 30,485 | ||||||||
Cash and cash equivalents: | |||||||||||
Beginning of year | $ 60,424 | $ 38,803 | 60,424 | 38,803 | 8,318 | ||||||
End of year | $ 20,312 | $ 60,424 | $ 20,312 | $ 60,424 | $ 38,803 |
QUARTERLY CONDENSED FINANCIAL_3
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
QUARTERLY CONDENSED FINANCIAL INFORMATION (UNAUDITED) | |||||||||||
Interest income | $ 61,592 | $ 56,987 | $ 58,283 | $ 46,505 | $ 43,500 | $ 43,246 | $ 34,528 | $ 31,839 | $ 223,367 | $ 153,113 | $ 121,249 |
Interest expense | 13,057 | 11,906 | 9,997 | 8,320 | 7,464 | 6,481 | 5,128 | 4,378 | 43,280 | 23,451 | 15,995 |
Net interest income | 48,535 | 45,081 | 48,286 | 38,185 | 36,036 | 36,765 | 29,400 | 27,461 | 180,087 | 129,662 | 105,254 |
Provision for loan losses | 3,467 | 2,103 | 1,854 | 2,006 | 6,076 | 1,489 | 458 | 1,533 | 9,430 | 9,556 | 5,591 |
Net interest income after provision for loan losses | 45,068 | 42,978 | 46,432 | 36,179 | 29,960 | 35,276 | 28,942 | 25,928 | 170,657 | 120,106 | 99,663 |
Noninterest income | 21,170 | 18,272 | 15,847 | 16,502 | 13,998 | 15,403 | 13,619 | 16,342 | 71,791 | 59,362 | 72,057 |
Noninterest expense | 45,375 | 50,317 | 46,452 | 49,499 | 36,192 | 48,363 | 37,645 | 30,797 | 191,643 | 152,997 | 121,289 |
Income (loss) before income taxes (benefit) | 20,863 | 10,933 | 15,827 | 3,182 | 7,766 | 2,316 | 4,916 | 11,473 | 50,805 | 26,471 | 50,431 |
Income taxes | 4,527 | 2,436 | 3,045 | 1,376 | 5,775 | 280 | 1,377 | 2,983 | 11,384 | 10,415 | 18,889 |
Net income | 16,336 | 8,497 | 12,782 | 1,806 | $ 1,991 | $ 2,036 | $ 3,539 | $ 8,490 | 39,421 | 16,056 | 31,542 |
Preferred stock dividends | 34 | 35 | 36 | 36 | |||||||
Net income available to common shareholders | $ 16,302 | $ 8,462 | $ 12,746 | $ 1,770 | $ 39,280 | $ 15,973 | $ 31,542 | ||||
Per common share data: | |||||||||||
Basic earnings per common share (In dollars per share) | $ 0.68 | $ 0.35 | $ 0.53 | $ 0.08 | $ 0.10 | $ 0.10 | $ 0.21 | $ 0.54 | $ 1.69 | $ 0.89 | $ 2.22 |
Diluted earnings per common share (In dollars per share) | $ 0.67 | $ 0.35 | $ 0.52 | $ 0.08 | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.52 | $ 1.66 | $ 0.87 | $ 2.17 |