Stellar Bancorp (STEL) 10-K 23 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 15, 2018	Jun. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	CBTX, Inc.
Entity Central Index Key	1,473,844
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		25,944,084
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 59,255	$ 53,000
Interest-bearing deposits at other financial institutions	266,944	329,103
Total cash and cash equivalents	326,199	382,103
Time deposits in other banks	600	600
Securities	223,208	205,978
Other investments	12,226	12,063
Loans held for sale	1,460	613
Loans, net of allowance for loan loss of $24,778 and $25,006 at December 31, 2017 and 2016, respectively	2,286,766	2,129,879
Premises and equipment, net	53,607	57,514
Goodwill	80,950	80,950
Other intangible assets, net of accumulated amortization of $13,930 and $12,851 at December 31, 2017 and 2016, respectively	6,770	7,791
Bank-owned life insurance	68,010	51,430
Deferred tax asset, net	5,780	9,031
Repossessed real estate and other assets	705	1,861
Other assets	14,802	11,709
Total assets	3,081,083	2,951,522
Liabilities
Noninterest-bearing deposits	1,109,789	1,025,425
Interest-bearing deposits	1,493,183	1,515,335
Total Deposits	2,602,972	2,540,760
Repurchase agreements	1,525	2,343
Junior subordinated debt	6,726	6,726
Note payable		27,679
Other liabilities	23,646	16,377
Total liabilities	2,634,869	2,593,885
Commitments and contingencies (Note 14)
Shareholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued
Common stock, $0.01 par value; 90,000,000 shares authorized, 25,731,504 shares issued at December 31, 2017 and 22,971,504 issued at December 31, 2016, 24,833,232 shares outstanding at December 31, 2017 and 22,062,072 shares outstanding at December 31, 2016	257	230
Additional paid-in capital	343,249	278,501
Retained earnings	118,353	95,274
Treasury stock, at cost (898,272 shares held at December 31, 2017 and 909,432 held at December 31, 2016)	(15,256)	(15,446)
Accumulated other comprehensive loss, net of tax of $104 and $495 at December 31, 2017 and 2016, respectively.	(389)	(922)
Total shareholders’ equity	446,214	357,637
Total liabilities and shareholders’ equity	$ 3,081,083	$ 2,951,522

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Allowance of loan loss	$ 24,778	$ 25,006
Amortization of other Intangible assets	$ 13,930	$ 12,851
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	90,000,000	90,000,000
Common stock, shares issued	25,731,504	22,971,504
Common stock, shares outstanding	24,833,232	22,062,072
Treasury stock, shares	898,272	909,432
Other comprehensive income (loss), tax	$ 104	$ 495

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest income
Interest and fees on loans	$ 107,368	$ 103,723	$ 100,786
Securities	5,347	3,801	2,814
Federal Funds and interest-bearing deposits	3,944	2,427	1,925
Total interest income	116,659	109,951	105,525
Interest expense
Deposits	7,652	7,073	6,501
Repurchase agreements	5	5	4
Note payable	906	1,061	932
Junior subordinated debt	322	266	217
Total interest expense	8,885	8,405	7,654
Net interest income (expense)	107,774	101,546	97,871
Provision (recapture) for loan losses	(338)	4,575	6,950
Net interest income after provision (recapture) for loan losses	108,112	96,971	90,921
Noninterest income
Deposit account service charges	5,800	6,538	6,912
Net gain on sale of assets	1,524	1,922	783
Gain on redemption of junior subordinated debt			1,025
Card interchange fees	3,453	3,352	3,331
Earnings on bank-owned life insurance	1,580	1,356	1,357
Other	1,847	2,581	1,559
Total noninterest income	14,204	15,749	14,967
Noninterest expense
Salaries and employee benefits	48,573	44,239	41,601
Net occupancy expense	9,151	10,100	9,844
Regulatory fees	2,176	2,300	2,206
Data processing	2,629	2,484	2,416
Printing, stationery and office	1,480	1,537	1,573
Amortization of intangibles	1,079	1,167	1,305
Professional and director fees	3,105	2,481	2,462
Correspondent bank and customer related transaction expenses	286	320	325
Loan processing costs	461	509	619
Advertising, marketing and business development	1,461	789	925
Repossessed real estate and other asset expense	609	318	228
Security and protection expense	1,355	1,718	1,619
Merger expense			1,374
Telephone and communications	1,316	1,444	1,386
Other expenses	4,611	4,096	3,078
Total noninterest Expense	78,292	73,502	70,961
Net income before income tax expense	44,024	39,218	34,927
Income tax expense	16,453	12,010	10,791
Net income	$ 27,571	$ 27,208	$ 24,136
Earnings per common share
Basic	$ 1.23	$ 1.23	$ 1.07
Diluted	$ 1.22	$ 1.22	$ 1.06

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 27,571	$ 27,208	$ 24,136
Unrealized gains (losses) on securities available for sale arising during the period, net	897	(3,622)	(527)
Reclassification adjustment for net realized gains included in net income	27	28
Change in related deferred income tax	(391)	1,258	184
Other comprehensive income (loss), net of tax	533	(2,336)	(343)
Total comprehensive income	$ 28,104	$ 24,872	$ 23,793

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Total
Beginning balance at Dec. 31, 2014	$ 230	$ 281,248	$ 52,812	$ (6,794)	$ 1,757	$ 329,253
Beginning balance, shares at Dec. 31, 2014	22,971,504			(437,574)
Purchase of shares of treasury stock				$ (4,418)		$ (4,418)
Purchase of shares of treasury stock, shares				(246,708)		(246,708)
Issuance of shares of treasury stock by exercise of stock options		(97)		$ 257		$ 160
Issuance of shares of treasury stock by exercise of stock options, shares				16,252
Stock-based compensation expense		12				12
Dividends on common stock			(4,487)			(4,487)
Net income			24,136			24,136
Other comprehensive loss, net of tax					(343)	(343)
Ending balance at Dec. 31, 2015	$ 230	281,163	72,461	$ (10,955)	1,414	344,313
Ending balance, shares at Dec. 31, 2015	22,971,504			(668,030)
Purchase of shares of treasury stock				$ (11,079)		$ (11,079)
Purchase of shares of treasury stock, shares				(635,100)		(635,100)
Issuance of shares of treasury stock by exercise of stock options		(2,705)		$ 6,588		$ 3,883
Issuance of shares of treasury stock by exercise of stock options, shares				393,698
Stock-based compensation expense		43				43
Dividends on common stock			(4,395)			(4,395)
Net income			27,208			27,208
Other comprehensive loss, net of tax					(2,336)	(2,336)
Ending balance at Dec. 31, 2016	$ 230	278,501	95,274	$ (15,446)	(922)	357,637
Ending balance, shares at Dec. 31, 2016	22,971,504			(909,432)
Sale of common stock in initial public offering	$ 27	64,492				$ 64,519
Sale of common stock in initial public offering, shares	2,760,000
Purchase of shares of treasury stock, shares						0
Issuance of shares of treasury stock by exercise of stock options		(73)		$ 190		$ 117
Issuance of shares of treasury stock by exercise of stock options, shares				11,160
Stock-based compensation expense		329				329
Dividends on common stock			(4,561)			(4,561)
Net income			27,571			27,571
Other comprehensive loss, net of tax						533
Other comprehensive income, net of tax			69		533	602
Ending balance at Dec. 31, 2017	$ 257	$ 343,249	$ 118,353	$ (15,256)	$ (389)	$ 446,214
Ending balance, shares at Dec. 31, 2017	25,731,504			(898,272)

CONSOLIDATED STATEMENTS OF CHA7

CONSOLIDATED STATEMENTS OF CHANGES IN SE (Parenthicals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Dividends on Common Stock	$ 0.20	$ 0.20	$ 0.20
Sale of common stock, offering costs	$ 7,241

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 27,571	$ 27,208	$ 24,136
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Provision (recapture) for loan loss	(338)	4,575	6,950
Depreciation	3,353	3,259	3,643
Deferred income tax provision (benefit)	2,932	601	(1,664)
Amortization of intangibles	1,079	1,167	1,305
Valuation adjustments on repossessed real estate and other assets	341	65	115
Net realized gain on securities and other investments	(50)	(52)	(22)
Gain on sale of assets	(1,524)	(1,922)	(783)
Gain on redemption of junior subordinated debt			(1,025)
Net income on bank-owned life insurance	(1,580)	(1,356)	(1,357)
Amortization of premiums on securities	1,294	1,267	907
Stock-based compensation expense	329	43	12
Change in operating assets and liabilities:
Loans held for sale	(420)	1,408	(573)
Other assets	(3,156)	(1,188)	2,459
Other liabilities	5,759	967	(1,269)
Total adjustments	8,019	8,834	8,698
Net cash provided by operating activities	35,590	36,042	32,834
Cash flows from investing activities:
Acquisition of MCBI, net of cash acquired			(5,936)
Purchases of securities	(355,525)	(406,173)	(383,162)
Proceeds from sales, calls, and maturities of securities	317,284	322,861	321,135
Principal repayments of securities	20,692	18,595	10,879
Net purchase of other investments	(162)	(52)	(1,887)
Net increase in time deposits in other banks		(200)
Net increase in loans	(187,030)	(78,553)	(36,342)
Sales of loan participations	46,067	4,948	26,755
Purchases of loan participations	(18,491)		(6,771)
Sales of U.S. Small Business Administration loans	2,173	3,490	3,593
Redemption (purchases) of bank-owned life insurance	(15,000)	367	(15,000)
Proceeds from sale of repossessed real estate and other assets	2,574	1,657	862
Purchases of premises and equipment	(992)	(1,882)
Proceeds from sales of premises and equipment	2,977	3,368	(2,790)
Net cash used in investing activities	(185,433)	(131,574)	(88,664)
Cash flows from financing activities:
Net increase (decrease) in noninterest-bearing deposits	84,364	(28,533)	1,186
Net increase (decrease) in interest-bearing deposits	(22,152)	85,926	(14,254)
Net increase (decrease) in securities sold under agreements to repurchase	(818)	253	(2,096)
Proceeds from sale of common stock in initial public offering	71,760
Offering cost for initial public offering	(7,241)
Purchase of treasury stock		(11,079)	(4,418)
Proceeds from issuance of treasury stock for exercise of stock options	117	3,883	160
Purchase of trust preferred securities			(3,075)
Proceeds from note payable			31,000
Repayment of note payable	(27,679)	(3,321)
Repayment of FHLB advances			(4,033)
Dividends paid on common stock	(4,412)	(4,395)	(4,487)
Net cash provided (used) in financing activities	93,939	42,734	(17)
Net decrease in cash and cash equivalents	(55,904)	(52,798)	(55,847)
Cash and cash equivalents, beginning	382,103	434,901	490,748
Cash and cash equivalents, ending	$ 326,199	$ 382,103	$ 434,901

BASIS OF PRESENTATION, NATURE O

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES	12 Months Ended
	Dec. 31, 2017
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES	NOTE 1: BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations — CBTX, Inc., or the Company or CBTX, was formed on January 26, 2007 and through its subsidiary, CommunityBank of Texas, N.A., or the Bank, operates 33 locations in the Houston and Beaumont/East Texas market areas. The Company’s primary source of revenue is from investing funds received from depositors and from providing loan and other financial services to its customers. The Bank operates under a national charter and therefore is subject to regulation by the Office of the Comptroller of the Currency, or OCC, and the Federal Deposit Insurance Corporation, or FDIC. The Company is subject to regulation by the Federal Reserve Board. Basis of Presentation —The accompanying consolidated financial statements include the accounts of the Company and the Bank, a wholly-owned subsidiary of the Company. All material intercompany balances and transactions have been eliminated in consolidation. Reclassification — Within noninterest expense, telephone and communication costs for 2016 and 2015 have been reclassified from printing, stationery and office to a separate line to conform to the 2017 financial statement presentation in the consolidated statements of income. Segment Reporting —The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit. The Company’s chief operating decision‑maker, the CEO, uses the consolidated results to make operating and strategic decisions. Use of Estimates —In preparing financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate primarily to the determination of the allowance for loan losses, the fair value of the Company’s investment securities, repossessed assets, deferred tax assets, financial instruments and intangible assets. Cash and Due from Banks —The Bank is required to maintain regulatory reserves with the Federal Reserve Bank. The reserve requirements for the Bank were approximately $15.8 million and $16.1 million at December 31, 2017 and 2016, respectively. Accordingly, cash and due from banks balances were restricted to that extent. The majority of cash, cash equivalents and time deposits of the Company are maintained with major financial institutions in the U.S. and have original maturities less than 90 days. Interest-bearing deposit accounts with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and therefore, bear minimal risk. In monitoring this credit risk, the Company periodically evaluates the stability of the financial institutions with which it has deposits. The Company has cash deposits in correspondent financial institutions in excess of the amount insured by the FDIC in the amount of $91.8 million and $79.2 million at December 31, 2017 and 2016, respectively. Loans —Through its Bank subsidiary, the Company makes mortgage, commercial and consumer loans to customers throughout counties located in Southeast Texas. The ability of the Company’s debtors to honor their contracts is dependent in part upon the general economic conditions in these areas. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay‑off, are measured at historical cost and generally reported at their outstanding unpaid principal balances, net of any unearned income, charge‑offs and unamortized deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. The Company records lines of credit at their funded portion. All unfunded amounts for loans in process and credit lines are reported as unfunded commitments. Interest income is accrued on the unpaid principal balance. A loan portfolio segment is the level at which an entity develops and documents a systematic methodology to determine the allowance for credit losses and a class of financing receivables as the level of disaggregation of portfolio segments based on the initial measurement attribute, risk characteristics and methods for assessing risk. The Company’s loan portfolio segments are commercial and industrial, real estate, consumer, agriculture and other. The classes of financing receivables within the real estate segment are commercial real estate, construction and development, 1-4 family residential and multi-family residential. The Company selectively extends credit to establish long‑term relationships with its customers. The Company mitigates the risks inherent in lending by focusing on businesses and individuals with demonstrated payment history, historically favorable profitability trends and stable cash flows. In addition to these primary sources of repayment, the Company looks to tangible collateral and personal guarantees as secondary sources of repayment. Lending officers are provided with detailed underwriting policies covering all lending activities in which the Company is engaged and that require all lenders to obtain appropriate approvals for the extension of credit. The Company also maintains documentation requirements and extensive credit quality assurance practices to identify credit portfolio weaknesses as early as possible so any exposures that are discovered may be reduced. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management and the Board of Directors review and approve these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Board of Directors with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. Government Guaranteed Loans —The Company originates loans that are partially guaranteed by the Small Business Administration, or SBA, and the Company may sell the guaranteed portion of these loans as market conditions and pricing allow for a gain to be recorded on the sale. Loan sales are recorded when control over the transferred asset has been relinquished. Control over the transferred portion is deemed to be surrendered when the assets have been removed from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In calculating the gain on sale of SBA loans, the Company’s investment in the loan is allocated among the unguaranteed portion of the loan, the servicing amount retained and the guaranteed portion of the loan sold, based on the relative fair market value of each portion. The gain on the sold portion of the loan is recognized based on the difference between the sale proceeds and the allocated investment. Loan Servicing —Servicing assets are recognized as separate assets when rights are acquired through the sale of financial assets. Servicing assets are initially recorded at fair market value and amortized in proportion to and over the service period and assessed for impairment or increased obligation based on fair value at each reporting date. Fair market value is based on the gross coupon less an assumed contractual servicing cost. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of the loan servicing rights is netted against loan servicing fee income. Nonrefundable Fees and Costs Associated with Lending Activities —Loan origination and commitment fees are deferred and accreted into income over the term of the loan. The unamortized balance of deferred loan fees reduces the investment in loans on the balance sheet. In addition, direct origination costs are deferred and amortized against interest income over the term of the loan. The unamortized balance of deferred origination costs is added to the investment in loans on the balance sheet. Nonperforming Loans and Past Due Loans —Included in the nonperforming loan category are loans which have been categorized by management as nonaccrual because of delinquency status or because collection of interest is doubtful and loans which have been restructured to provide a reduction in the interest rate or a deferral of interest or principal payments. When the payment of principal or interest on a loan is delinquent for 90 days, or earlier in some cases, the loan is placed on nonaccrual status, unless the loan is in the process of collection or renewal and the underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan and the probability that the Company will collect all principal and interest amounts outstanding. When a loan is placed on nonaccrual status, interest accrued and uncollected during the current year prior to the judgment of uncollectability is charged to operations, unless the loan is well secured with collateral values sufficient to ensure collection of both principal and interest. Generally, any payments received on nonaccrual loans are applied first to outstanding loan amounts, reducing the Company’s recorded investment in the loan and next to the recovery of charged‑off principal or interest amounts. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is defined as impaired if, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. The allowance for loan losses related to impaired loans is determined based on the difference between the carrying value of loans and the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Interest income received on impaired loans is either applied against principal or realized as interest income, according to management’s judgment as to the collectability of principal. Troubled Debt Restructurings —The Company will classify a loan as a troubled debt restructuring if both (i) the borrower is experiencing financial difficulties and (ii) the borrower has been granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Interest is generally accrued on such loans in accordance with the new terms. Allowance for Loan Losses —The allowance for loan losses represents management’s estimate of probable losses inherent in the Company’s lending portfolio. Credit exposures deemed to be uncollectible are charged against these accounts. Cash recovered on previously charged‑off amounts is recorded as a recovery to these accounts. The allowance for loan losses does not include amounts related to accrued interest receivable as accrued interest receivable is reversed when a loan is placed on nonaccrual or is charged‑off. The Company employs a systematic methodology for determining the allowance for loan losses that consists of two components: (i) specific valuation allowances based on probable losses on specific loans and (ii) historical valuation allowances based on historical average loss experience for similar loans with similar characteristics and trends adjusted, as necessary, to reflect the impact of current conditions and further adjusted for general economic conditions and other risk factors both internal and external to the Company. Except for groups of smaller‑balance homogenous loans, a loan is considered impaired when, based on current information, it is probable that the borrower will be unable to pay contractual interest or principal payments as scheduled in the loan agreement. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The specific allowance related to an impaired loan is established when the carrying value of the loan is more than the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The Company uses fair market value, less reasonable and customary costs to sell, for collateral dependent loans. In certain instances, a specific allowance will be established to protect against market deterioration. The allowance on the remaining portfolio segments is calculated using historical loss rates adjusted for qualitative factors. Criticized and classified loans, not deemed impaired, are subject to an allowance based on the historical loss migration analysis by grade adjusted for qualitative factors. Pass loans are subject to an allowance based on historical losses by product type adjusted for qualitative factors. The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio. The general valuation factor is based upon a more qualitative analysis of risk. Various risks are considered in the determination of the environmental adjustment factor such as asset quality, lending management and staff, loan policies and procedures, loan review, credit concentrations, loan volumes, collateral values, compliance and economic trends. A majority of the loan portfolio is comprised of loans to businesses and individuals in the Houston metropolitan and Beaumont area. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses Concentrations of Risk —The Company’s investments are potentially subject to various levels of risk associated with economic and political events beyond management’s control. Consequently, management’s judgment as to the level of losses that currently exist or may develop in the future involves the consideration of current and anticipated conditions and their potential effects on the Company’s investments. Due to the level of uncertainty related to changes in the value of investment securities, it is possible that changes in risks could materially impact the amounts reflected herein. Generally, all of the Company’s loans, loan commitments, and letters of credit have been granted to customers in the counties in Texas in which it operates branch facilities. The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions. Concentrations of credit by type of loan are set forth in Note 4. It is the Company’s policy to not extend credit to any single borrower or group of related borrowers in excess of its subsidiary Bank’s legal lending limits as defined by state and federal banking regulations. The regional economy of certain counties where the Company operates depends heavily on the forestry and oil and gas industries. The ultimate collectability and performance of a substantial portion of the Company’s loan portfolio is dependent on the local market conditions in all counties in which the Company operates. Loans Held for Sale —Loans held for sale include mortgage loans originated with the intent to sell on the secondary market. These loans are held for an interim period, usually less than 30 days. Accordingly, these loans are classified as held for sale and are carried at cost, which is determined on an aggregate basis and deemed to be the equivalent of fair value based on the short-term nature of the loans. Securities — Securities that the Company intends to hold for an indefinite period of time are classified as available for sale and are carried at fair value. Unrealized gains and losses are excluded from earnings and reported as a separate component of shareholders’ equity until realized. Securities within the available for sale portfolio may be used as part of the Company’s asset/liability strategy and may be sold in response to changes in interest risk, prepayment risk or other similar economic factors. Securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity and are carried at cost, adjusted for the amortization of premiums and the accretion of discounts. Management has the positive intent and the ability to hold these long‑term securities until their scheduled maturities. Securities are accounted for on a trade date basis. Premiums and discounts are amortized and accreted to income using the level‑yield method of accounting, adjusted for prepayments as applicable. Interest earned on these assets is included in interest income. The specific identification method of accounting is used to compute gains or losses on the sales of these assets. Securities are evaluated for other‑than‑temporary impairment, or OTTI, on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining OTTI, management considers many factors, including: (i) the duration and the extent to which the fair value has been less than cost, (ii) the financial condition and near‑term prospects of the issuer and (iii) the intent and the ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The assessment of whether an other‑than‑temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or will be required to sell the security before recovery of its amortized cost basis, less any current‑period credit loss. If the Company intends to sell the security or it is more likely that the Company will be required to sell the security before recovery of its amortized cost basis less any current‑period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not likely that the Company will be required to sell the security before recovery of its amortized cost basis, less any current‑period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. Other Investments —Banks that are members of the Federal Home Loan Bank, or FHLB, are required to maintain a stock investment in the FHLB calculated as a percentage of aggregate outstanding mortgages, outstanding FHLB advances and other financial instruments. Both stock and cash dividends may be received on FHLB stock and are recorded when received as interest income. At December 31, 2017 and 2016, the Company held $1.2 million in FHLB stock. Banks that are members of the Federal Reserve System are required to annually subscribe to Federal Reserve Bank stock in specific ratios to the Bank’s equity. Although the par value of the stock is $100 per share, member banks pay only $50 per share at the time of purchase with an understanding that the other half of the subscription amount is subject to call at any time. The stock does not provide the owner with control or financial interest in the Federal Reserve Bank, is non‑transferable and cannot be used as collateral. Dividends are received in the form of cash and are recorded as interest income when received. At December 31, 2017 and 2016, the Company held $9.3 million in Federal Reserve Bank stock, which is included in other investments on the consolidated balance sheets. The Company also held an investment totaling $141,000 in the stock of The Independent Bankers Financial Corporation, or TIB, at December 31, 2017 and 2016, which is included in other investments on the consolidated balance sheets. Investments in stock of the FHLB, the Federal Reserve Bank and TIB are restricted investments due to limited marketability and are stated at cost as management believes their cost value is ultimately recoverable. The Company has investments in two private investment funds and a limited partnership, which totaled $1.6 million and $1.5 million at December 31, 2017 and 2016, respectively, included in other investments on the consolidated balance sheets. These investments are qualified Community Reinvestment Act, or CRA, investments under the Small Business Investment Company, or SBIC, program of the SBA. The investments are stated at cost, which management believes to be recoverable and have required periodic capital calls. Unfunded commitments related to these investments totaled $3.8 million at December 31, 2017. Premises and Equipment —Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation expense is computed on the straight‑line method over the estimated useful lives of the assets. Land is carried at cost. Leasehold improvements are amortized over the life of the lease, plus renewal options or the estimated useful lives, whichever is shorter. Buildings are depreciated over a period not to exceed thirty-two years. Depending upon the type of furniture and equipment, the depreciation period will range from three to ten years. Bank vehicles are amortized over a period of three years. Gains and losses on dispositions are included in other noninterest income. During periods of real estate development, interest on construction costs is capitalized if considered material by management. Goodwill, Servicing Assets and Intangible Assets —Goodwill is evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred. Impairment would exist if the fair value of the reporting unit at the date of the test is less than the goodwill recorded on the financial statements. If an impairment of goodwill exists, a loss would then be recognized in the consolidated financial statements to the extent of the impairment. The Company’s identified intangibles are core deposits, customer relationship intangibles and loan servicing assets and these intangibles are being amortized over their estimated useful lives. Our intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. Core deposit intangibles are amortized over a seven to ten-year period using an accelerated method in keeping with the anticipated benefits derived from those core deposits. Customer relationship intangibles are being amortized over a fifteen-year period on a straight-line basis. Capitalized servicing assets are amortized into noninterest expense in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. The servicing asset is assessed for impairment or increased obligation based on fair value at each reporting date. Fair value is based on the gross coupon less an assumed contractual servicing cost, or based upon discounted cash flows using market‑based assumptions. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Bank-owned life insurance —The Company has purchased life insurance policies on certain employees, which are carried on the consolidated balance sheet at their cash surrender value. Increases to the cash surrender value of the policies are recorded in noninterest income. Expenses related to life insurance policies are recorded in other noninterest expense. Repossessed Real Estate and Other Assets —Real estate and other assets acquired through repossession or foreclosure are held for sale and are initially recorded at the fair value of the asset less any selling costs, establishing a new cost basis. Outstanding loan balances are reduced to reflect this value through charges to the allowance for possible credit losses. Subsequent to repossession or foreclosure, the asset is carried at the lower of its new cost basis or fair value, less estimated costs to sell. Subsequent adjustments to reflect changes in value below the recorded amounts are recognized in income in the period such determinations are assessed. Required developmental costs associated with foreclosed property under construction are capitalized and considered in determining the fair value of the property. Operating expenses of these assets, net of related income and gains and losses on their disposition are included in other noninterest income or expense. Other Assets —Included in other assets on the Company’s consolidated balance sheets are accrued interest receivables on loans and investments, prepaid expenses and other miscellaneous assets. Repurchase Agreements —The Company utilizes securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate short‑term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Pledged securities are maintained with our safekeeping agent. Derivative Financial Instruments —All derivatives are recorded at fair value on the balance sheet. Derivatives executed with the same counterparty are generally subject to master netting arrangements. Fair value amounts recognized for derivatives and fair value amounts recognized for the right/obligation to reclaim/return cash collateral are not offset for financial reporting purposes. The Company did not have derivative instruments that qualified for hedge accounting during the years ended December 31, 2017, 2016 or 2015, but it may in the future as circumstances arise. The Company’s hedging policies permit the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities. The Company has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. See further discussion of the Company’s outstanding derivative instruments in Note 14. Fair Value Measurements —Fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is estimated based upon models that primarily use, as inputs, observable market‑based parameters. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the entity’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company has not elected to account for any financial assets or liabilities as trading instruments, which would require changes in market value on these instruments be recorded in the Company’s consolidated statements of income. Treasury Stock —The Company has repurchased shares of its authorized and issued common stock which is now held in treasury pending use for general corporate purposes or retirement. In 2016 and 2015, 635,100 and 246,708 shares of stock were purchased at an average price of $17.56 and $17.60 per share, respectively. There were no shares of stock purchased during 2017. Income Taxes —The Company prepares and reports income taxes on a consolidated basis. Income tax expense is recognized for the tax effects of the transactions reported in the consolidated financial statements and consist of taxes currently due, plus deferred taxes related primarily to differences between the book and tax basis of the allowance for possible credit losses, the amortization of identifiable intangibles and accumulated depreciation. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized. In addition, management does not believe there are any unrecorded deferred tax liabilities that are material to the financial statements. During 2017, a comprehensive U.S. tax reform package, the Tax Cuts and Jobs Act, or Tax Act, was enacted which, among other things, lowered the corporate income tax rate from 35% to 21%. As a result, the Company remeasured its deferred tax assets and liabilities at December 31, 2017 for the change in rate. See Note 15. The Company believes that all significant tax positions utilized by the Company will more likely than not be sustained upon examination by the taxing authorities based on the t

MERGER ACTIVITY

MERGER ACTIVITY	12 Months Ended
	Dec. 31, 2017
MERGER ACTIVITY
MERGER ACTIVITY	NOTE 2: MERGER ACTIVITY MC Bancshares, Inc. In February 2015, the Company completed its acquisition of MC Bancshares, Inc., or MCBI, including its subsidiary Memorial City Bank, a privately‑held bank holding company and bank located in Houston, Texas. The Company purchased all the outstanding shares of MCBI for $56.9 million in cash funded through a note payable in the amount of $31.0 million and a special distribution from the Bank in the amount of $25.0 million. Expenditures related to the acquisition of MCBI totaled $1.4 million and are reported as a component of other noninterest expense the year ended December 31, 2015 in the accompanying consolidated statements of income.

SECURITIES

SECURITIES	12 Months Ended
	Dec. 31, 2017
SECURITIES
SECURITIES	NOTE 3: SECURITIES The amortized cost and fair values of investments in securities at December 31, 2017 and 2016, are summarized in the following tables: Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2017 Securities available for sale: State and municipal securities $ 60,861 $ 1,173 $ (118) $ 61,916 U.S. Agency Securities: Debt securities 17,315 — (370) 16,945 Collateralized mortgage obligations 61,878 50 (675) 61,253 Mortgage-backed securities 82,510 330 (866) 81,974 Other securities 1,104 — (17) 1,087 Total $ 223,668 $ 1,553 $ (2,046) $ 223,175 Securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 December 31, 2016 Securities available for sale: State and municipal securities $ 58,991 $ 638 $ (650) $ 58,979 U.S. Agency Securities: Debt securities 20,795 — (454) 20,341 Collateralized mortgage obligations 34,005 90 (325) 33,770 Mortgage-backed securities 92,489 516 (1,215) 91,790 Other securities 1,081 — (17) 1,064 Total $ 207,361 $ 1,244 $ (2,661) $ 205,944 Securities held to maturity: Mortgage-backed securities $ 34 $ 3 $ — $ 37 The amortized cost and estimated fair value of securities at December 31, 2017 and 2016, by contractual maturities, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations. Securities Available for Sale Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value December 31, 2017 Amounts maturing in: 1 year or less $ 6,203 $ 6,194 $ — $ — 1 year through 5 years 26,811 26,635 — — 5 years through 10 years 9,215 9,348 — — After 10 years 181,439 180,998 33 35 $ 223,668 $ 223,175 $ 33 $ 35 December 31, 2016 Amounts maturing in: 1 year or less $ 5,579 $ 5,570 $ — $ — 1 year through 5 years 28,946 28,937 — — 5 years through 10 years 20,834 20,880 — — After 10 years 152,002 150,557 34 37 $ 207,361 $ 205,944 $ 34 $ 37 Securities with a carrying amount of approximately $6.1 million and $302,000 were sold during the years ended December 31, 2017 and 2016, respectively. Net gains of $27,000 and $28,000 were recognized, which is reflected in other noninterest income in the Company’s consolidated statements of income for the years ended December 31, 2017 and 2016, respectively. There were no security sales during the year ended December 31, 2015. At December 31, 2017 and December 31, 2016, securities with a carrying amount of approximately $58.7 million and $54.0 million respectively, were pledged to secure public deposits and for other purposes required or permitted by law. The Company held 106 and 121 securities at December 31, 2017 and December 31, 2016, respectively, that were in a gross unrealized loss position as illustrated in the table below. Management does not have the intent to sell any of the securities classified as available for sale in an unrealized loss position and believes that it is more likely than not that the Company will not have to sell any of these securities before a recovery of cost. The unrealized losses are attributable primarily to changes in market interest rates relative to those available when the securities were acquired. The fair value of these securities is expected to recover as the securities reach their maturity or re‑pricing date, or if changes in market rates for such investments decline. Management does not believe that any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2017 and 2016, management believes the impairments detailed in the table below are temporary and no impairment loss has been recorded in the Company’s consolidated statements of income for the years ended December 31, 2017, 2016 and 2015. Information pertaining to individual securities with unrealized losses at December 31, 2017 and 2016, aggregated by investment category and the length of time were as follows: Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized Value Losses Value Losses December 31, 2017 Securities available for sale: State and municipal securities $ 2,494 $ (3) $ 6,516 $ (115) U.S. Agency Securities: Debt securities 4,464 (55) 12,481 (315) Collateralized mortgage obligations 44,116 (380) 9,938 (295) Mortgage-backed securities 22,079 (123) 32,538 (743) Other securities — — 1,087 (17) $ 73,153 $ (561) $ 62,560 $ (1,485) December 31, 2016 Securities available for sale: State and municipal securities $ 22,856 $ (647) $ 313 $ (3) U.S. Agency Securities: Debt securities 18,341 (454) — — Collateralized mortgage obligations 24,800 (325) — — Mortgage-backed securities 67,500 (1,215) — — Other securities 1,064 (17) — — $ 134,561 $ (2,658) $ 313 $ (3)

LOANS

LOANS	12 Months Ended
	Dec. 31, 2017
LOANS
LOANS	NOTE 4: LOANS Loans by portfolio segment, at December 31, 2017 and 2016 are summarized as follows: (Dollars in thousands) December 31, 2017 December 31, 2016 Commercial and industrial $ 559,363 24.1 % $ 511,554 23.7 % Real estate: Commercial real estate 738,293 31.9 % 697,794 32.3 % Construction and development 449,211 19.4 % 491,626 22.8 % 1-4 family residential 258,584 11.2 % 236,882 11.0 % Multi-family residential 220,305 9.5 % 133,210 6.2 % Consumer 40,433 1.7 % 39,694 1.8 % Agriculture 11,256 0.5 % 11,106 0.5 % Other 40,344 1.7 % 38,180 1.7 % Total gross loans 2,317,789 100.0 % 2,160,046 100.0 % Less deferred loan fees (4,555) (4,321) Less unearned discount on retained portion of loans sold (230) (227) Less allowance for loan loss (24,778) (25,006) Total loans, net 2,288,226 2,130,492 Less loans held for sale 1,460 613 Loans, net $ 2,286,766 $ 2,129,879 Accrued interest receivable for loans is $6.1 million and $5.5 million at December 31, 2017 and 2016, respectively and is included in other assets in the consolidated balance sheets. Loan Participations Purchased and Sold From time to time, the Company will acquire and dispose of interests in loans under participation agreements with other financial institutions. Loan participations purchased and sold during the years ending December 31, 2017, 2016 and 2015, by loan class, are summarized as follows: Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period December 31, 2017 Commercial and industrial $ — $ 23,000 Commercial real estate 12,885 20,505 Construction and development 5,606 2,562 $ 18,491 $ 46,067 December 31, 2016 Commercial real estate $ — $ 654 Construction and development — 4,294 $ — $ 4,948 December 31, 2015 Commercial and industrial $ 1,674 $ — Construction and development 5,097 21,755 Loans to nondepository financial institutions — 5,000 $ 6,771 $ 26,755 Loans Guaranteed by the SBA The Company participates in the SBA loan program. When advantageous, the Company will sell the guaranteed portions of these loans with servicing retained. SBA loans that were sold with servicing retained during the years ended December 31, 2017, 2016 and 2015 were $2.2 million, $3.5 million and $3.6 million. Net gains recognized on sales of SBA loans were $149,000, $326,000 and $382,000 for the years ended December 31, 2017, 2016 and 2015 and are included in net gain on sales of assets in the consolidated income statements.

LOAN PERFORMANCE

LOAN PERFORMANCE	12 Months Ended
	Dec. 31, 2017
LOAN PERFORMANCE
LOAN PERFORMANCE	NOTE 5: LOAN PERFORMANCE Nonaccrual loans, segregated by loan class, at December 31, 2017 and 2016 were as follows: December 31, (Dollars in thousands) 2017 2016 Commercial and industrial $ 3,280 $ 2,318 Real estate: Commercial real estate 3,216 2,118 Construction and development 252 458 1-4 family residential 898 1,302 Multi-family residential — 7 Agriculture — 36 Total $ 7,646 $ 6,239 Interest income that would have been earned under the original terms of the nonaccrual loans was $402,000 $779,000 and $776,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The following is an aging analysis of the Company’s loans, segregated by loan class, as of December 31, 2017 and 2016: 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2017 Commercial and industrial $ 943 $ 1,071 $ 2,535 $ 4,549 $ 554,814 $ 559,363 $ — Real estate: Commercial real estate 337 841 1,866 3,044 735,249 738,293 — Construction and development 400 — — 400 448,811 449,211 — 1-4 family residential 807 — 143 950 257,634 258,584 — Multi-family residential — — — — 220,305 220,305 — Consumer 3 25 — 28 40,405 40,433 — Agriculture — — — — 11,256 11,256 — Other — — — — 40,344 40,344 — Total loans $ 2,490 $ 1,937 $ 4,544 $ 8,971 $ 2,308,818 $ 2,317,789 $ — 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2016 Commercial and industrial $ 378 $ 68 $ 2,273 $ 2,719 $ 508,835 $ 511,554 $ — Real estate: Commercial real estate 352 75 1,865 2,292 695,502 697,794 — Construction and development 19 — — 19 491,607 491,626 — 1-4 family residential 377 688 757 1,822 235,060 236,882 — Multi-family residential — — — — 133,210 133,210 — Consumer — — — — 39,694 39,694 — Agriculture — — — — 11,106 11,106 — Other 3 2 — 5 38,175 38,180 — Total loans $ 1,129 $ 833 $ 4,895 $ 6,857 $ 2,153,189 $ 2,160,046 $ — Loans, segregated by loan class, which were restructured due to the borrower’s financial difficulties during the years ending December 31, 2017 and 2016 and remain outstanding as of the end of those periods are as follows: During the Year Ended December 31, 2017 Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate Commercial and industrial 2 $ 1,178 $ — $ — $ 1,178 $ — Commercial real estate 4 970 146 667 157 — Total 6 $ 2,148 $ 146 $ 667 $ 1,335 $ — During the Year Ended December 31, 2016 Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate Commercial and industrial 6 $ 5,616 $ — $ 4,936 $ 680 $ — Commercial real estate 2 3,520 — 3,520 — — Other 2 8,213 — 8,213 — — Total 10 $ 17,349 $ — $ 16,669 $ 680 $ — The modifications primarily related to extending the amortization periods of the loans, converting the loans to interest only, or adjusting payment amounts for principal and interest. A significant portion of the loans modified as troubled debt restructurings by the Company were previously on nonaccrual status and reported as impaired loans prior to restructuring and as a result, the modifications did not impact the Company’s determination of the allowance for loan losses. At December 31, 2017 and 2016, the Company had no commitments to loan additional funds to borrowers whose loans are modified as troubled debt restructuring. Subsequent to December 31, 2017, the Company extended a line of credit of $7.5 million to a loan restructured in 2016, which is performing according to the terms of that restructuring. The recorded investment in loans that were restructured and outstanding as of December 31, 2017 and 2016, was $18.2 million and $25.5 million, respectively. There were no loans modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. For purposes of this disclosure, a default is a loan modified as a troubled debt restructuring where the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral.

ALLOWANCE FOR LOAN LOSSES

ALLOWANCE FOR LOAN LOSSES	12 Months Ended
	Dec. 31, 2017
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES	NOTE 6: ALLOWANCE FOR LOAN LOSSES For purposes of determining the allowance for loan losses, the Company considers the loans in its portfolio by segment, class and risk grade. Management uses judgment to determine the estimation method that fits the credit risk characteristics of each portfolio segment or class. To facilitate the assessment of risk, management reviews reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. The Company utilizes an independent third-party loan review service to review the credit risk assigned to loans on a periodic basis and the results are presented to management for review. The following tables present a detail of the activity in the allowance for loan losses segregated by loan class for the years ended December 31, 2017, 2016 and 2015. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2016 Beginning balance $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315 Provision (recapture) for loan loss 5,537 4,193 94 (1,012) 154 222 227 (4,840) 4,575 Charge-offs (4,884) (589) — (3) — (277) (267) (59) (6,079) Recoveries 1,010 108 — 6 — 45 26 — 1,195 Net (charge-offs) recoveries (3,874) (481) — 3 — (232) (241) (59) (4,884) Ending balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Period-end amount allocated to: Specific reserve $ 462 $ 206 $ — $ — $ — $ — $ — $ — $ 668 General reserve 5,947 10,564 4,598 1,286 916 353 79 595 24,338 Total $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2015 Beginning balance $ 7,160 $ 6,985 $ 2,991 $ 1,843 $ 500 $ 423 $ 118 $ 4,932 $ 24,952 Provision (recapture) for loan loss 4,272 (189) 1,513 573 262 (18) (25) 562 6,950 Charge-offs (7,210) (27) — (263) — (102) — — (7,602) Recoveries 524 289 — 142 — 60 — — 1,015 Net (charge-offs) recoveries (6,686) 262 — (121) — (42) — — (6,587) Ending balance $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315 Period-end amount allocated to: Specific reserve $ 357 $ — $ 26 $ — $ — $ 6 $ — $ — $ 389 General reserve 4,389 7,058 4,478 2,295 762 357 93 5,494 24,926 Total $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315 In addition to the amounts indicated in the table above, the Company has an accumulated reserve for loan losses on unfunded commitments of $378,000 and $366,000 recorded in other liabilities as of December 31, 2017 and 2016, respectively. Risk Grading As part of the on‑going monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for loan losses, management assigns and tracks loan grades to be used as credit quality indicators. The following is a general description of the loan grades used as of December 31, 2017 and 2016. Pass —Credits in this category are considered “pass ” which indicates prudent underwriting and a normal amount of risk. The range of risk within these credits can vary from little to no risk with cash securing a credit, to a level of risk that requires a strong secondary source of repayment on the debt. Pass credits with a higher level of risk may be to borrowers that are higher leveraged, less well capitalized or in an industry or economic area that is known to carry a higher level of risk, volatility, or susceptibility to weaknesses in the economy. This higher risk grade may be assigned due to out of date credit information, as well as collateral information, which may need to be updated for current market value in order to allow a credit quality analysis of the credit. Special Mention —Credits in this category contain more than the normal amount of risk and are referred to as “special mention” in accordance with regulatory guidelines. These credits possess clearly identifiable temporary weaknesses or trends that, if not corrected or revised, may result in a condition that exposes the Company to higher level of risk of loss. Substandard —Credits in this category are “substandard” in accordance with regulatory guidelines and of unsatisfactory credit quality with well‑defined weaknesses or weaknesses that jeopardize the liquidation of the debt. Credits in this category are inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. These credits are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Often, the assets in this category will have a valuation allowance representative of management’s estimated loss that is probable to be incurred. Substandard loans may also be placed on nonaccrual status as deemed appropriate by management. Loans substandard and on nonaccrual status are considered impaired and are evaluated for impairment. Doubtful —Credits in this category are considered “doubtful” in accordance with regulatory guidelines, are placed on nonaccrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near‑term event which lacks certainty. Generally, these credits will have a valuation allowance based upon management’s best estimate of the losses probable to occur in the liquidation of the debt. Loss —Credits in this category are considered “loss” in accordance with regulatory guidelines and are considered uncollectible and of such little value as to question their continued existence as assets on the Company’s financial statements. Such credits are to be charged off or charged down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. This category does not intend to imply that the debt or some portion of it will never be paid, nor does it in any way imply that the debt will be forgiven. The following tables present loans by risk grades and loan class at December 31, 2017 and 2016. The Company had no loans graded Loss or Doubtful at December 31, 2017 and 2016. Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2017 Commercial and industrial $ 535,589 $ 8,403 $ 15,371 $ 559,363 Real estate: Commercial real estate 722,503 2,951 12,839 738,293 Construction and development 448,124 565 522 449,211 1-4 family residential 252,317 — 6,267 258,584 Multi-family residential 212,899 7,406 — 220,305 Consumer 40,144 246 43 40,433 Agriculture 11,223 — 33 11,256 Other 33,109 — 7,235 40,344 Total loans $ 2,255,908 $ 19,571 $ 42,310 $ 2,317,789 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2016 Commercial and industrial $ 483,399 $ 2,207 $ 25,948 $ 511,554 Real estate: Commercial real estate 674,445 7,731 15,618 697,794 Construction and development 485,823 933 4,870 491,626 1-4 family residential 234,473 797 1,612 236,882 Multi-family residential 125,553 7,650 7 133,210 Consumer 39,684 10 — 39,694 Agriculture 11,033 — 73 11,106 Other 29,335 — 8,845 38,180 Total loans $ 2,083,745 $ 19,328 $ 56,973 $ 2,160,046 Loan Impairment Assessment The Company’s recorded investment in impaired loans, as of December 31, 2017 and 2016, by loan class and disaggregated on the basis of the Company’s impairment methodology is as follows: Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2017 Commercial and industrial $ 11,921 $ 6,100 $ 1,192 $ 7,292 $ 852 $ 12,090 Real estate: Commercial real estate 9,646 8,626 667 9,293 64 9,438 Construction and development 296 251 — 251 — 323 1-4 family residential 5,003 3,050 1,874 4,924 119 3,369 Multi-family residential — — — — — 2 Consumer — — — — — 21 Agriculture — — — — — 1 Other 7,152 7,152 — 7,152 — 7,616 Total loans $ 34,018 $ 25,179 $ 3,733 $ 28,912 $ 1,035 $ 32,860 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2016 Commercial and industrial $ 16,483 $ 8,088 $ 4,227 $ 12,315 $ 462 $ 15,550 Real estate: Commercial real estate 6,454 4,398 1,866 6,264 206 5,903 Construction and development 506 476 — 476 — 754 1-4 family residential 1,781 1,712 — 1,712 — 1,403 Multi-family residential 13 7 — 7 — 10 Consumer — — — — — 8 Agriculture 307 36 — 36 — 34 Other 8,849 8,845 — 8,845 — 5,540 Total loans $ 34,393 $ 23,562 $ 6,093 $ 29,655 $ 668 $ 29,202 Interest income earned on impaired loans was $1.1 million, $648,000 and $201,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The Company’s recorded investment in loans as of December 31, 2017 and 2016 by loan class and the basis of the Company’s impairment methodology is as follows: Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Loans individually evaluated for impairment $ 7,292 $ 9,293 $ 251 $ 4,924 $ — $ — $ — $ 7,152 $ 28,912 Loans collectively evaluated for impairment 552,071 729,000 448,960 253,660 220,305 40,433 11,256 33,192 2,288,877 Total $ 559,363 $ 738,293 $ 449,211 $ 258,584 $ 220,305 $ 40,433 $ 11,256 $ 40,344 $ 2,317,789 December 31, 2016 Loans individually evaluated for impairment $ 12,315 $ 6,264 $ 476 $ 1,712 $ 7 $ — $ 36 $ 8,845 $ 29,655 Loans collectively evaluated for impairment 499,239 691,530 491,150 235,170 133,203 39,694 11,070 29,335 2,130,391 Total $ 511,554 $ 697,794 $ 491,626 $ 236,882 $ 133,210 $ 39,694 $ 11,106 $ 38,180 $ 2,160,046 An impairment analysis is performed for all loans graded substandard and placed on nonaccrual status. If management determines a loan is impaired, the loan is written down to its estimated realizable value through a charge to the allowance for loan losses. At December 31, 2017 and 2016, the allowance allocated to specific reserves for loans individually evaluated for impairment was $1.0 million and $668,000, respectively.

PREMISES AND EQUIPMENT

PREMISES AND EQUIPMENT	12 Months Ended
	Dec. 31, 2017
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT	NOTE 7: PREMISES AND EQUIPMENT Premises and equipment at December 31, 2017 and 2016, are summarized as follows: December 31, (Dollars in thousands) 2017 2016 Land $ 13,466 $ 14,686 Buildings and leasehold improvements 51,664 52,230 Furniture and equipment 14,887 14,814 Vehicles 202 202 Construction in progress — 144 80,219 82,076 Less accumulated depreciation and amortization (26,612) (24,562) Premises and equipment, net $ 53,607 $ 57,514 Depreciation expense was $3.4 million, $3.3 million and $3.6 million for the years ended December 31, 2017, 2016 and 2015, respectively, which is included in net occupancy expense on the Company’s consolidated statements of income. Net gains and losses on dispositions of premises and equipment of $742,000, $1.3 million and $20,000 for the years ended December 31, 2017, 2016 and 2015, respectively were recognized and are included in net gain on sale of assets in the consolidated statements of income. See Net Gains on Sales of Premises and Equipment below. Net Gains on Sales of Premises and Equipment In September 2017, the Bank completed the sale of its branch located in Huffman, Texas, referred to as the Huffman Branch. Pursuant to a purchase and assumption agreement, the Bank sold premises and equipment and other assets associated with the Huffman Branch valued at approximately $1.4 million and the purchaser assumed approximately $15.0 million in deposits at the Huffman Branch. We recorded a gain of $28,000 as a result of this sale, which is included in net gain on sale of assets in the consolidated statements of income. In September 2017, we sold the real estate associated with our Deweyville, Texas branch, referred to as the Deweyville Branch. We completed the closing of the Deweyville Branch in December 2017 and the $4.7 million of deposits and $50,000 of loans at the Deweyville Branch were transferred to one of our other nearby branch locations. We recorded a gain of $97,000 as a result of this sale, which is included in net gain on sale of assets in the consolidated statements of income. In September 2017, we recorded a gain of $554,000 due to settlement of a legal matter related to one of our branches, which is included in net gain on sale of assets in the consolidated statements of income. During 2016, the Company sold its Washington branch land and building in Houston, Texas and leased space from the owner for the retail branch operations for a ten-year period. The Company determined it has no continuing involvement with the property other than a normal leaseback and therefore the transaction qualified as a sale. The land had a cost of $1.0 million and the building had a net book value of $963,000 at time of sale. A gain of $1.5 million was recorded on the sale and included in net gain on sale of assets on the consolidated statement of income.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2017
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 8: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is not amortized and there have been no changes in goodwill during the years ended December 31, 2017 and 2016. The Company’s other intangibles are being amortized over their estimated useful lives of seven to twenty years. Based on the results of the Company’s assessment, management does not believe any impairment of goodwill or other intangible assets existed at December 31, 2017 or 2016. Other intangibles assets at December 31, 2017 and 2016 are as follows: Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets December 31, 2017 Other intangible assets, net Core deposits 6.2 years $ 13,750 $ (12,051) $ 1,699 Customer relationships 11.0 years 6,629 (1,767) 4,862 Servicing assets 17.3 years 321 (112) 209 Total other intangible assets, net $ 20,700 $ (13,930) $ 6,770 December 31, 2016 Other intangible assets, net Core deposits 7.1 years $ 13,750 $ (11,448) $ 2,302 Customer relationships 12.0 years 6,629 (1,326) 5,303 Servicing assets 16.8 years 263 (77) 186 Total other intangible assets, net $ 20,642 $ (12,851) $ 7,791 Servicing Assets A summary of the changes in the servicing assets is as follows: Year Ended December 31, (Dollars in thousands) 2017 2016 Balance at beginning of year $ 186 $ 136 Increase from loan sales 58 80 Amortization charges (35) (30) Balance at end of period $ 209 $ 186 Estimated future amortization for core deposits and customer relationship intangible assets were as follows at December 31, 2017: (Dollars in thousands) December 31, 2017 2018 $ 952 2019 860 2020 768 2021 675 2022 584 Thereafter 2,722 Total $ 6,561

BANK OWNED LIFE INSURANCE

BANK OWNED LIFE INSURANCE	12 Months Ended
	Dec. 31, 2017
BANK OWNED LIFE INSURANCE
BANK OWNED LIFE INSURANCE	NOTE 9: BANK OWNED LIFE INSURANCE Bank-owned life insurance policies and the net change in cash surrender value during December 31, 2017, 2016 and 2015 are summarized as follows: For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Balance at beginning of year $ 51,430 $ 50,441 $ 34,084 Purchases 15,000 — 15,000 Redemptions — (367) — Earnings, net 1,580 1,356 1,357 Balance at end of year $ 68,010 $ 51,430 $ 50,441

DEPOSITS

DEPOSITS	12 Months Ended
	Dec. 31, 2017
DEPOSITS
DEPOSITS	NOTE 10: DEPOSITS Deposits at December 31, 2017 and 2016 are summarized as follows: December 31, (Dollars in thousands) 2017 2016 Interest-bearing demand accounts $ 363,015 $ 359,560 Money market accounts 702,299 731,942 Saving accounts 95,842 85,927 Certificates and other time deposits, $100,000 or greater 172,469 179,621 Certificates and other time deposits, less than $100,000 159,558 158,285 Total interest-bearing deposits 1,493,183 1,515,335 Noninterest-bearing deposits 1,109,789 1,025,425 Total deposits $ 2,602,972 $ 2,540,760 At December 31, 2017, the scheduled maturities of time deposits were as follows: (Dollars in thousands) December 31, 2017 Three months or less $ 63,482 Over three months through six months 57,471 Over six months through 12 months 84,476 Over 12 months through three years 102,864 Over three years 23,734 Total $ 332,027 At December 31, 2017 and 2016, the Company had $45.3 million and $49.2 million in deposits from public entities and brokered deposits of $88.3 million and $81.4 million, respectively. The Company had no major concentrations of deposits at December 31, 2017 or 2016 from any single or related groups of depositors.

NOTE PAYABLE AND LINES OF CREDI

NOTE PAYABLE AND LINES OF CREDIT	12 Months Ended
	Dec. 31, 2017
NOTE PAYABLE AND LINES OF CREDIT
NOTE PAYABLE AND LINES OF CREDIT	NOTE 11: NOTE PAYABLE AND LINES OF CREDIT Note Payable In conjunction with the acquisition of MCBI, the Company entered into a loan agreement on February 1, 2015 for $31.0 million. On November 13, 2017, we paid the then remaining outstanding balance in full. Interest paid was $1.1 million and $1.1 million for the years ended December 31, 2017 and 2016, respectively. Frost Line of Credit On December 13, 2017, the Company entered into a loan agreement, or the Loan Agreement, with Frost Bank, or the Lender, which provides for a $30.0 million revolving line of credit, or the Line of Credit. The Company can make draws on the Line of Credit for a period of 12 months beginning on the date of the Loan Agreement, after which the Company will not be permitted to make further draws and the outstanding balance will amortize over a period of 60 months. Interest accrues on outstanding borrowings at a rate equal to the maximum “Latest” “U.S.” prime rate of interest per annum and payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months. The entire outstanding balance and unpaid interest shall be payable in full on December 13, 2023. The Company may prepay the principal amount of any loan under the Loan Agreement without premium or penalty. The Company can use the proceeds from the Loan Agreement for the purpose of financing acquisitions and other general corporate purposes, including capital augmentation. The obligations of the Company under the Loan Agreement are secured by a valid and perfected first priority lien on all of the issued and outstanding shares of capital stock of the Bank. Covenants made under the Loan Agreement include, among other things, the Company maintaining tangible net worth of not less than $240 million, the Company maintaining free cash flow coverage ratio of not less than 1.25 to 1.00, the Bank’s Texas Ratio (as defined under the Loan Agreement) not to exceed 15%, the Bank’s Total Capital Ratio (as defined under the Loan Agreement) of not less than 12% and restrictions on the ability of the Company and its subsidiaries to incur certain additional debt. The Company was in compliance with these covenants at December 31, 2017. As of December 31, 2017, there were no outstanding borrowings on this line and the Company did not draw on this line during the period from December 13, 2017, when the Company entered the agreement, to December 31, 2017. Additional Lines of Credit The FHLB allows us to borrow on a blanket floating lien status collateralized by certain loans. As of December 31, 2017 and 2016, total borrowing capacity of $793.3 million and $767.8 million, respectively, was available under this arrangement. As of December 31, 2017 and 2016, there were no outstanding borrowings on this line and the Company did not draw on this line during these periods. As of December 31, 2017 and 2016, we maintained four federal funds lines of credit with commercial banks that provide for the availability to borrow up to an aggregate of $75.0 million, in federal funds. There were no funds under these lines of credit outstanding as of December 31, 2017 and 2016.

JUNIOR SUBORDINATED DEBT

JUNIOR SUBORDINATED DEBT	12 Months Ended
	Dec. 31, 2017
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT	NOTE 12: JUNIOR SUBORDINATED DEBT Crosby Statutory Trust I Prior to being acquired in 2008 by the Company, Crosby Bancshares, Inc. received proceeds of junior subordinated debt held by a trust that is funded by common securities purchased by Crosby Bancshares, Inc. and trust preferred securities in the amount of $5.0 million that are held by other investors. Funds raised by the trust totaling $5.2 million were loaned to Crosby Bancshares, Inc. in the form of junior subordinated debt. This debt was assumed by the Company at the date of acquisition. This debt is generally subordinated to other debt and deposits reflected on the consolidated balance sheets. The subordinated debt securities have a due date of December 15, 2035 and interest is payable quarterly. The interest rate of the debt is equal to the London Interbank Offered Rate of U.S. Dollar deposits in Europe, or LIBOR, plus 1.44%, reset quarterly, which was 3.03% at December 31, 2017 and 2.40% at December 31, 2016. The Company has the right to redeem these debt securities in whole, or from time to time in part, provided that all accrued and unpaid interest has been paid. County Bancshares Trust I Prior to being acquired in 2007 by the Company, County Bancshares, Inc. received proceeds of junior subordinated debt held by a trust that is funded by common securities, all of which were purchased by County Bancshares, Inc. and trust preferred securities in the amount of $5.5 million that are held by other investors. Funds raised by the trust totaling $5.7 million were loaned to County Bancshares, Inc. in the form of junior subordinated debt. This debt was transferred to the Company at the date of acquisition. In 2015, the Company purchased approximately $4.1 million of the outstanding preferred securities, reducing the outstanding preferred securities to $1.6 million. This debt is generally subordinated to other debt and deposits reflected on the consolidated balance sheets presented. The subordinated debt securities have a due date of April 7, 2035 and interest is payable quarterly. The interest rate of the debt is equal to LIBOR, plus 2% and is reset quarterly. The rate of interest was 3.36% at December 31, 2017 and 2.88% at December 31, 2016. The Company has the right to redeem these debt securities in whole or from time to time in part, provided that all accrued and unpaid interest has been paid.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2017
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 13: RELATED PARTY TRANSACTIONS In the ordinary course of business, the Company, through its Bank subsidiary, has and expects to continue to conduct routine banking business with related parties, including its executive officers and directors. Related parties also include shareholders and their affiliates in which they directly or indirectly have 5% or more beneficial ownership in the Company. Loans —In the opinion of management, loans to related parties were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable transactions with other persons and did not involve more than a normal risk of collectability or present any other unfavorable features to the Company. The Company had approximately $205.8 million and $142.5 million in loans to related parties at December 31, 2017 and 2016, respectively. As of December 31, 2017 and 2016, there were no loans made to related parties deemed nonaccrual, past due, restructured or classified as potential problem loans. For the years ended December 31, 2017, 2016 and 2015, loans to related parties are summarized as follows: For the Years Ended December 31, (Dollars in thousands) 2017 2016 Balance at beginning of year $ 142,516 $ 136,514 New loans 108,698 81,302 Repayments (45,446) (75,300) Balance at end of year $ 205,768 $ 142,516 Unfunded Commitments —At December 31, 2017 and 2016, the Company had approximately $69.7 million and $48.6 million in unfunded loan commitments to related parties, respectively. Deposits —The Company held related party deposits of approximately $224.4 million and $254.7 million at December 31, 2017 and 2016, respectively. Advertising —The Company incurred advertising expenses of approximately $192,000 and $94,000 for the years ended December 31, 2017 and 2016, respectively, to a vendor that is solely owned by a director of the Company.

COMMITMENTS AND CONTINGENCIES A

COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK	12 Months Ended
	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK	NOTE 14: COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF‑BALANCE‑SHEET RISK Unfunded Loan Commitments The Company is party to various financial instruments with off‑balance‑sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit for loans in process, commercial lines of credit, overdraft protection lines and standby letters of credit at both fixed and variable rates of interest. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement the Company has in particular classes of financial instruments. The Company’s 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 notional amount of those instruments. The Company uses the same credit policies in making these commitments and conditional obligations as it does for on‑balance‑sheet instruments. The Company evaluates each customer’s credit worthiness on a case‑by‑case basis. The amount of collateral obtained, if considered necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. The following is a summary of the various financial instruments whose contract amounts represent credit risk at December 31, 2017 and 2016: December 31, (Dollars in thousands) 2017 2016 Commitments to extend credit, variable $ 626,441 $ 493,740 Commitments to extend credit, fixed 61,608 113,719 $ 688,049 $ 607,459 Standby letters of credit $ 28,977 $ 26,682 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers. Derivative Financial Instruments The Company has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments for mitigating interest rate risk of the Bank. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap transaction, the Bank agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Bank agrees to pay a third‑party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. Because the Bank acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact the Company’s operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties. At December 31, 2017 and 2016, no such deterioration was determined by management. At December 31, 2017 and 2016, the Company had 14 and 11 interest rate swap agreements outstanding with borrowers, respectively, with a corresponding number outstanding with correspondent financial institutions. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Fair value amounts are included in other assets and other liabilities. The tables below set forth a summary of the derivative instruments outstanding as of December 31, 2017 and 2016. Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2017 Interest rate swaps with customers Other Assets $ 25,882 $ 340 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.83 years Interest rate swaps with financial institution Other Assets 16,579 426 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 8.12 years Interest rate swaps with customers Other Liabilities 16,579 (426) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 7.83 years Interest rate swaps with financial institution Other Liabilities 25,882 (340) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 8.12 years Total derivatives not designated as hedging instruments $ 84,922 $ — Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2016 Interest rate swaps with customers Other Assets $ 13,637 $ 430 5.10% - 7.25% LIBOR 1M + 2.50% - 3.25% 6.60 years Interest rate swaps with financial institution Other Assets 14,399 350 4.00% - 4.75% LIBOR 1M + 2.50% - 3.00% 9.45 years Interest rate swaps with customers Other Liabilities 14,399 (350) 4.00% - 4.75% LIBOR 1M + 2.50% - 3.00% 6.60 years Interest rate swaps with financial institution Other Liabilities 13,637 (430) 5.10% - 7.25% LIBOR 1M + 2.50% - 3.25% 9.45 years Total derivatives not designated as hedging instruments $ 56,072 $ — Repurchase Agreements At December 31, 2017 and 2016, the Company had outstanding funds amounting to $1.5 million and $2.3 million respectively, received from the sale of securities that were sold under agreements to repurchase. Securities subject to the transfer of ownership under the repurchase agreements are included in pledged securities and the carrying value of these securities is disclosed in Note 3. The Company transacts these repurchase agreements with its customers and pays interest rates on these funds according to the terms of each repurchase agreement. Contingent Liabilities The Company is committed to contribute capital into two private investment funds and a limited partnership under the SBIC program of the SBA. At December 31, 2017 and 2016, the Company had $3.8 million and $4.0 million, respectively, in outstanding unfunded commitments to these funds which are subject to call. Cumulative capital contributions to these funds of $1.6 million and $1.5 million are included in other investments in the Company’s consolidated balance sheets at December 31, 2017 and 2016, respectively. The Company is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Company, it is the opinion of management that the disposition or ultimate determination of such claims and lawsuits will not have a material adverse effect on the financial position or results of operations of the Company. Lease Commitments Pursuant to the terms of non‑cancelable lease agreements in effect at December 31, 2017, future minimum rent commitments under various leases are as follows: (Dollars in thousands) December 31, 2017 2018 $ 1,573 2019 1,409 2020 1,394 2021 1,462 2022 1,513 Thereafter 10,833 Total $ 18,184 The Company leases several of its banking facilities under operating leases. Total rent expense for operating leases of premises and equipment was $1.8 million, $2.9 million and $2.2 million for the years ended December 31, 2017, 2016 and 2015, respectively and is reflected in net occupancy expense on the consolidated statements of income. It is expected that in the normal course of business, leases that expire will be renewed or replaced by leases on other property or equipment.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2017
INCOME TAXES
INCOME TAXES	NOTE 15: INCOME TAXES The components of the provision for income tax expense for the years ended December 31, 2017, 2016 and 2015 are as follows: For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Current federal income tax $ 13,364 $ 11,269 $ 12,353 Current state income tax 157 140 102 Deferred income tax 2,932 601 (1,664) Total income tax expense $ 16,453 $ 12,010 $ 10,791 Income tax expense for the years ended December 31, 2017, 2016 and 2015 differs from the applicable statutory rate of 35% as follows: For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Tax expense calculated at statutory rate $ 15,408 $ 13,726 $ 12,225 Increase (decrease) resulting from: State income tax 102 140 102 Tax exempt interest income (1,504) (1,585) (1,349) Life insurance (553) (485) (464) Impact of tax law rate change 3,857 — — Other (857) 214 277 Total income tax expense $ 16,453 $ 12,010 $ 10,791 Effective tax rate 37.4 % 30.7 % 30.9 % The Tax Cuts and Jobs Act of 2017 was enacted December 22, 2017 and lowered the corporate federal income tax rate in the U.S. from 35% to 21%. Based upon this tax law enactment, the Company analyzed and remeasured its deferred tax positions to the new tax rate and recorded a $3.9 million adjustment to income tax expense in the consolidated income statement for the year ended December 31, 2017. While the Company believes its analysis to be complete, it will continue to evaluate the tax reform impacts noting that the ultimate impact of tax reform may differ from the amounts recorded due to changes in our interpretations and assumptions, as well as additional regulatory guidance that may be issued. Deferred income taxes are provided for differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. The components of the net deferred tax asset at December 31, 2017 and 2016 are as follows: December 31, (Dollars in thousands) 2017 2016 Deferred tax assets: Allowance for possible credit losses $ 5,203 $ 8,752 Compensation related 2,228 1,334 Deferred loan origination fees and loan costs 988 1,512 Loan related 423 1,037 Unrealized loss on securities available for sale 103 496 Other 215 788 Total deferred tax assets 9,160 13,919 Deferred tax liabilities: Accumulated depreciation (1,228) (2,205) Compensation 481(a) adjustment (713) — Core deposit intangibles (1,378) (2,662) Other (61) (21) Total deferred tax liabilities (3,380) (4,888) Net Deferred Tax Asset $ 5,780 $ 9,031 With its acquisition of MCBI in 2015, the Company had approximately $1.5 million tax‑effected federal net operating loss carryforwards. The utilization of these carryforwards as an available offset to future taxable income is subject to limitations under U.S. federal income tax laws. The net operating loss carryforwards were fully utilized during the year ended December 31, 2017. As of December 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2013 forward for the State of Texas and from the year 2014 forward for federal. When necessary, the Company would include interest expense assessed by taxing authorities in interest expense and penalties related to income taxes in other expense on its consolidated statements of income. The Company did not record any interest or penalties related to income tax for the years ended December 31, 2017, 2016 and 2015.

EMPLOYEE BENEFIT PLANS AND DEFE

EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS	12 Months Ended
	Dec. 31, 2017
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS	NOTE 16: EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS Employee Benefit Plans The Company maintains a 401(k) employee benefit plan in which substantially all employees that complete three months of service may participate. The Company, at its discretion, may match a portion of each employee’s contribution. The Company, also at its discretion, may make additional contributions during the Plan year. During the years ended December 31, 2017 and 2016, the Company contributed $1.7 million and $1.7 million to the plan, respectively. Executive Deferred Compensation Arrangements The Company established an executive incentive compensation arrangement with several officers of the Bank, in which the executive is eligible for performance based incentive bonus compensation. As part of this compensation arrangement, the Company will contribute one‑fourth of the incentive bonus amount into a deferred compensation account. The deferred amounts accrue at a market rate of interest and are payable to the employees upon separation from the Bank provided the Plan’s vesting arrangements have been met. At December 31, 2017 and 2016, the amount payable, including interest, for this deferred plan was approximately $2.4 million and $2.0 million, respectively and is included in other liabilities in the consolidated balance sheets. Salary Continuation Agreement The Company entered into a salary continuation arrangement in 2008 with the Company’s then President and CEO that calls for payments of $100,000 per year for a period of 10 years commencing at age 65. Payments under the plan began during 2014. The Company’s liability was approximately $503,000 and $583,000 at December 31, 2017 and 2016, respectively, determined using discounted cash flows and is included in other liabilities in the consolidated balance sheets. On October 28, 2017, the Company entered into a salary continuation arrangement with the Company’s President and CEO that calls for payments of $200,000 per year payable for a period of 10 years commencing at age 70. Payments under the plan will begin in 2024. The Company’s liability was approximately $32,000 at December 31, 2017, determined using discounted cash flows and is included in other liabilities in the consolidated balance sheets. Change of Control Agreements In 2017, the Company entered into employment agreements with certain executive officers. These agreements provide for severance benefits if we terminate the executive without “cause” or the executive resigns with “good reason” (as those terms and benefits are defined in the agreements). In addition, upon a “change of control” (as that term is defined in the agreements), these employees, in accordance with the terms of their respective agreements, will be entitled to an aggregate amount of approximately $2.2 million. No compensation has been recorded to date as a change of control condition is not deemed probable. VB Texas, Inc. and Vista Bank Texas entered into change of control and non‑competition agreements with certain employees of VB Texas, Inc., who are now employees of the Bank. Under their respective agreements, upon a “change of control” of the Company (as that term is defined in the agreements) or an “involuntary termination” (as that term is defined in the agreements), each of these employees will be entitled to receive an amount equal to two times the sum of (i) base salary plus (ii) the average bonus paid to the officer during the three years preceding the “change of control” or “involuntary termination”, as applicable. The Company’s initial public offering completed November 10, 2017 triggered the change of control provisions of these agreement and we will pay these employees in the first quarter of 2018. At December 31, 2017, the amount payable, including interest, for this deferred plan was an aggregate amount of $2.5 million and is included in other liabilities in the consolidated balance sheets.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2017
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	NOTE 17: STOCK-BASED COMPENSATION The Company acquired a stock option plan which originated under VB Texas, Inc. in 2006. The options granted to employees must be exercised within 10 years from the date of grant and vesting schedules are determined on an individual basis. At the merger date, all outstanding options became fully vested and were converted to options of the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. No options were granted under this plan after October 24, 2016. The Company also acquired a stock option plan that originated in May 2011 under VB Texas, Inc., or the 2011 Plan. At the merger date, all outstanding options became fully vested and were converted to options of the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. On August 7, 2017, the Board of Directors of the Company terminated the 2011 Plan. At the date of termination, there were no options outstanding under this plan. In May 2014, the Company adopted the 2014 Stock Option Plan, or the 2014 Plan. The 2014 Plan was approved by the Company’s shareholders and limits the number of shares that may be optioned to 1,127,200. The 2014 Plan provides that no options may be granted after May 20, 2024. Options granted under the 2014 Plan expire 10 years from the date of grant and become exercisable in installments over a period of one to five years, beginning on the first anniversary of the grant. At December 31, 2017, 959,200 shares were available for future grant under the 2014 Plan. On September 13, 2017, the Company’s shareholders approved the Company’s 2017 Omnibus Incentive Plan, or the 2017 Plan. The 2017 Plan authorizes the Company to grant options, restricted stock awards as well as various other stock-based awards to eligible employees, consultants and non‑employee directors up to an aggregate of 600,000 shares of common stock. At December 31, 2017, 387,420 shares were available for future grant under the 2017 Plan. The following table summarizes activity under the stock option plans for the years ended December 31, 2017 and 2016 and the balances as of those dates: December 31, 2017 2016 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise (Dollars in thousands, except per share data) Options Price Options Price Options outstanding at beginning of period 248,314 $ 12.80 647,074 $ 10.99 Granted 80,000 $ 21.00 — $ — Forfeited (56,832) $ 10.14 (5,062) $ 9.85 Exercised (11,160) $ 10.47 (393,698) $ 9.87 Options outstanding at end of period 260,322 $ 16.00 248,314 $ 12.80 The fair value of each option grant is estimated on the date of grant using the Black‑Scholes option pricing model. The following assumptions were used for the 2017 and 2015 grants. Year Ended Year Ended December 31, December 31, 2017 2015 Dividend yield 0.95 % 1.19 % Expected volatility 35.97 % 8.96 % Risk free interest rate 2.42 % 2.05 % Expected life in years 6.0 6.0 The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. Expected volatility is based on the volatility of certain comparable public company peers. The risk‑free interest rate is based upon the U.S. Treasury yield curve in effect at the time of grant. Expected life is based on the ten-year option expiration term or historical exercise experience. December 31, 2017 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 127,122 133,200 260,322 Weighted-average exercise price per share $ 12.49 $ 19.36 $ 16.00 Aggregate intrinsic value (in thousands) $ 2,183 $ 1,372 $ 3,555 Weighted-average contractual term (years) 4.5 8.6 6.6 The intrinsic value at exercise date for of options exercised during the years ended December 31, 2017, 2016 and 2015 was $118,000, $2.8 million and $160,000, respectively. In November 2017, we granted 212,580 shares of restricted stock under the 2017 Plan to our directors, executive officers and certain key employees. The restricted stock grants to our directors will vest over the service period in equal increments over a two-year vesting period and the grants to our executive officers and employees vest in equal increments on an annual basis over a five‑year period. The market value of the Company’s common stock at the date of grant is used as the estimate of fair value of restricted stock. December 31, 2017 Restricted stock Exercisable Unvested Outstanding Number of shares underlying restricted stock — 212,580 212,580 Weighted-average grant date fair value per share $ — $ 27.27 $ 27.27 Aggregate grant date fair value (in thousands) $ — $ 5,797 $ 5,797 Weighted-average contractual term (years) — 4.4 4.4 The shares of the restricted stock are fully issued at the time of the grant and the grantee becomes the record owner of the restricted stock and has voting, dividend and other shareholder rights. The shares of restricted stock are non-transferable and subject to forfeiture until the restricted stock vests and any dividends with respect to the restricted stock are subject to the same restrictions, including the risk of forfeiture. At December 31, 2017, $11,000 was accrued for dividends payable to restricted stock holders. These dividends will be paid upon vesting of the restricted stock. Stock-based compensation is recognized as compensation cost in the consolidated income statements based on the fair value on the date of grant over the required service period, generally defined as the vesting period. For the years ended December 31, 2017, 2016 and 2015, stock compensation expense was $329,000, $43,000 and $12,000, respectively. As of December 31, 2017, there was approximately $6.2 million of total unrecognized compensation expense related to the stock‑based compensation arrangements, which is expected to be recognized over a weighted-average period of 3.1 years.

REGULATORY MATTERS

REGULATORY MATTERS	12 Months Ended
	Dec. 31, 2017
REGULATORY MATTERS
REGULATORY MATTERS	NOTE 18: REGULATORY MATTERS Regulatory Capital Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities and certain off‑balance‑sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. The Company and Bank’s Common Equity Tier 1 capital includes common stock and related capital surplus, net of treasury stock and retained earnings. In connection with the adoption of the Basel III Capital Rules, the Company and Bank elected to opt‑out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1. Common Equity Tier 1 for both the Company and Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions. When fully phased in on January 1, 2019, the Basel III Capital Rules will require the Company and Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk‑weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk‑weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will be phased in over a four‑year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company and Bank. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk‑weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk‑weighted assets below the effective minimum (4.5% plus the capital conservation buffer and, if applicable, the countercyclical capital buffer) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following table presents actual and required capital ratios as of December 31, 2017 and 2016 for the Company and Bank under the Basel III Capital Rules: Minimum Minimum Capital Capital Required-Basel Required-Basel Required to be III Phase-in III Fully Considered Well Actual Schedule Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2017 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 361,322 14.2 % $ 114,628 4.5 % $ 178,310 7.0 % $ 165,573 6.5 % Bank Only $ 322,414 12.7 % $ 114,252 4.5 % $ 178,150 7.0 % $ 165,425 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 367,722 14.4 % $ 152,837 6.0 % $ 216,519 8.5 % $ 203,782 8.0 % Bank Only $ 322,414 12.7 % $ 152,700 6.0 % $ 216,325 8.5 % $ 203,600 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 392,878 15.4 % $ 203,782 8.0 % $ 267,464 10.5 % $ 254,728 10.0 % Bank Only $ 347,569 13.7 % $ 203,600 8.0 % $ 267,726 10.5 % $ 254,501 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 367,722 12.3 % $ 119,769 4.0 % $ 119,769 4.0 % $ 149,712 5.0 % Bank Only $ 322,414 10.8 % $ 119,403 4.0 % $ 119,403 4.0 % $ 149,253 5.0 % December 31, 2016 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 274,516 11.5 % $ 107,272 4.5 % $ 166,867 7.0 % $ 154,948 6.5 % Bank Only $ 304,058 12.8 % $ 107,209 4.5 % $ 166,770 7.0 % $ 154,844 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 280,916 11.8 % $ 143,029 6.0 % $ 202,624 8.5 % $ 190,705 8.0 % Bank Only $ 304,058 12.8 % $ 142,946 6.0 % $ 202,507 8.5 % $ 190,594 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 306,287 12.9 % $ 190,705 8.0 % $ 250,300 10.5 % $ 238,381 10.0 % Bank Only $ 329,428 13.8 % $ 190,594 8.0 % $ 250,155 10.5 % $ 238,243 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 280,916 9.8 % $ 114,872 4.0 % $ 114,872 4.0 % $ 143,590 5.0 % Bank Only $ 304,058 10.6 % $ 114,872 4.0 % $ 114,872 4.0 % $ 143,590 5.0 % Management believes that, as of December 31, 2017 and 2016, the Company and its bank subsidiary, CommunityBank of Texas, National Association, were “well capitalized” based on the ratios presented above. The Company and Bank are subject to the regulatory capital requirements administered by the Federal Reserve Board and, for the Bank, the OCC. Regulatory authorities can initiate certain mandatory actions if the Company or Bank fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. Management believes, as of December 31, 2017 and 2016, that the Company and Bank meet all capital adequacy requirements to which they are subject. Dividend Restrictions In the ordinary course of business, the Company may be dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years.

FAIR VALUE DISCLOSURES

FAIR VALUE DISCLOSURES	12 Months Ended
	Dec. 31, 2017
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES	NOTE 19: FAIR VALUE DISCLOSURES The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction occurring in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In estimating fair value, we use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Such valuation techniques are consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Valuation inputs are categorized in a three-level hierarchy, from highest to lowest level of observable inputs. The highest level of inputs are prices in active markets for identical assets or liabilities and the lowest level of inputs are unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs —Inputs are based upon unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. The fair values of the Company’s equity securities were measured using Level 1 inputs. Level 2 Inputs —Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 2 investments consist primarily of obligations of U.S. government sponsored enterprises and agencies, obligations of state and municipal subdivisions, corporate bonds and mortgage‑backed securities. Level 3 Inputs —Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. During the years ended December 31, 2017 and 2016, there were no transfers of assets or liabilities within the levels of the fair value hierarchy. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon models that primarily use observable market‑based parameters as inputs. Valuation adjustments may be made to ensure that assets and liabilities are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Financial Instruments Recorded at Fair Value Assets and liabilities measured at fair value on a recurring basis include the following: Securities Available for Sale: Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For those securities classified as Level 2, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things. The other securities in the table below are mutual funds and the fair value is determined by using unadjusted quoted market prices which are considered Level 1 inputs. Interest Rate Swaps with Customers: For interest rate swaps with customers classified as Level 2, the Company obtains fair value measurements from an independent pricing service which uses the income approach. The income approach calls for the utilization of valuation techniques to convert future cash flows as due to be exchanged per the terms of the financial instrument, into a single present value amount. Measurement is based on the value indicated by the market expectations about those future amounts as of the measurement date. The proprietary curves of the independent pricing service utilize pricing models derived from industry standard analytic tools, considering both Level 1 and Level 2 inputs. Interest Rate Swaps with Financial Institutions: For interest rate swaps with financial institutions classified as Level 2, the Company obtains fair value measurements from an independent pricing service, which uses the income approach. The income approach calls for the utilization of valuation techniques to convert future cash flows as due to be exchanged per the terms of the financial instrument, into a single present value amount. Measurement is based on the value indicated by the market expectations about those future amounts as of the measurement date. The proprietary curves of the independent pricing service utilize pricing models derived from industry standard analytic tools, considering both Level 1 and Level 2 inputs. The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Financial assets: Securities available for sale State and municipal securities $ — $ 61,916 $ — $ 61,916 U.S. Agency Securities: Debt securities — 16,945 — 16,945 Collateralized mortgage obligations — 61,253 — 61,253 Mortgage-backed securities — 81,974 — 81,974 Other securities 1,087 — — 1,087 Interest rate swaps with customers — 340 — 340 Interest rate swaps with financial institutions — 426 — 426 Total financial assets $ 1,087 $ 222,854 $ — $ 223,941 Financial liabilities: Interest rate swaps with customers $ — $ 426 $ — $ 426 Interest rate swaps with financial institutions — 340 — 340 Total financial liabilities $ — $ 766 $ — $ 766 December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Financial assets: Securities available for sale State and municipal securities $ — $ 58,979 $ — $ 58,979 U.S. Agency Securities: Debt securities — 20,341 — 20,341 Collateralized mortgage obligations — 33,770 — 33,770 Mortgage-backed securities — 91,790 — 91,790 Other securities 1,064 — — 1,064 Interest rate swaps with customers — 430 — 430 Interest rate swaps with financial institutions — 350 — 350 Total financial assets $ 1,064 $ 205,660 $ — $ 206,724 Financial liabilities: Interest rate swaps with customers $ — $ 350 $ — $ 350 Interest rate swaps with financial institutions — 430 — 430 Total financial liabilities $ — $ 780 $ — $ 780 Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis as they are subject to fair value adjustments in certain circumstances, such as evidence of impairment. Financial assets measured at fair value on a non‑recurring basis during the reported periods include certain impaired loans reported at the fair value of the underlying collateral, if repayment is expected solely from the collateral. Repossessed real estate and other assets as well as collateral values are estimated using Level 2 inputs based on observable market data, typically in the case of real estate collateral, or Level 3 inputs based on customized discounting criteria, typically in the case of non‑real estate collateral such as inventory, accounts receivable, equipment or other business assets. The tables below outline certain assets measured at fair value on a non‑recurring basis at December 31, 2017 and 2016. December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Impaired loans: Commercial and industrial $ — $ — $ 340 $ 340 Commercial real estate — — 603 603 1-4 family residential — — 1,755 1,755 Total impaired loans $ — $ — $ 2,698 $ 2,698 December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Impaired loans: Commercial and industrial $ — $ — $ 3,765 $ 3,765 Commercial real estate — — 1,660 1,660 Total impaired loans $ — $ — $ 5,425 $ 5,425 Non‑Financial Assets and Non‑Financial Liabilities The Company does not have any non‑financial assets or non‑financial liabilities measured at fair value on a recurring basis. Certain non‑financial assets measured at fair value on a non‑recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non‑financial assets and non‑financial liabilities measured at fair value in the second step of a goodwill impairment test and intangible assets and other non‑financial long‑lived assets measured at fair value for impairment assessment. Non‑financial assets measured at fair value on a non‑recurring basis during the reported periods include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge‑off to the allowance for loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write‑down included in other noninterest expense. The fair value of a foreclosed asset is estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. During the year ended December 31, 2017 and 2016, we used Level 2 inputs for our fair value measurements for foreclosed assets. The following table presents foreclosed assets that were remeasured subsequent to initial recognition and reported at fair value: December 31, December 31, (Dollars in thousands) 2017 2016 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ 881 $ 2,018 Charge-offs recognized in the allowance for loan losses — (47) Fair value $ 881 $ 1,971 Foreclosed assets remeasured subsequent to initial recognition: Carrying value of foreclosed assets prior to measurement $ 227 $ 630 Write-downs included in other noninterest expense (51) (65) Fair value $ 176 $ 565 Fair Value Disclosure for all Financial Instruments The Company is required to disclose the fair value of all financial instruments, including those financial assets and financial liabilities not recorded at fair value in its consolidated balance sheets, for which it is practicable to estimate fair value. The tables below summarize the fair market values of all financial instruments of the Company at December 31, 2017 and 2016, followed by methods and assumptions that were used by the Company in estimating their fair value. Level 1 Level 2 Level 3 Total Carrying (Dollars in thousands) Inputs Inputs Inputs Fair Value Amount December 31, 2017 Financial assets: Cash and due from banks $ 59,255 $ — $ — $ 59,255 $ 59,255 Interest bearing deposits in banks 266,944 — — 266,944 266,944 Time deposits in other banks — 600 — 600 600 Securities available for sale — 222,088 — 222,088 222,088 Other securities 1,087 — — 1,087 1,087 Securities held to maturity — 35 — 35 33 Other investments — — 12,226 12,226 12,226 Loans, including held for sale, net — — 2,299,742 2,299,742 2,288,226 Bank-owned life insurance — 68,010 — 68,010 68,010 Servicing asset — 209 — 209 209 Accrued interest receivable — 7,429 — 7,429 7,429 Interest rate swaps with customers — 340 — 340 340 Interest rate swaps with financial institutions — 426 — 426 426 Total financial assets $ 327,286 $ 299,137 $ 2,311,968 $ 2,938,391 $ 2,926,873 Financial liabilities: Noninterest-bearing deposits $ 1,109,789 $ — $ — $ 1,109,789 $ 1,109,789 Interest-bearing deposits — 1,437,013 — 1,437,013 1,493,183 Repurchase agreements — 1,525 — 1,525 1,525 Junior subordinated debt — 6,726 — 6,726 6,726 Accrued interest payable — 374 — 374 374 Interest rate swaps with customers — 426 — 426 426 Interest rate swaps with financial institutions — 340 — 340 340 Total financial liabilities $ 1,109,789 $ 1,446,404 $ — $ 2,556,193 $ 2,612,363 Level 1 Level 2 Level 3 Total Carrying (Dollars in thousands) Inputs Inputs Inputs Fair Value Amount December 31, 2016 Financial assets: Cash and due from banks $ 53,000 $ — $ — $ 53,000 $ 53,000 Interest bearing deposits in banks 329,103 — — 329,103 329,103 Time deposits in other banks — 600 — 600 600 Securities available for sale — 204,880 — 204,880 204,880 Other securities 1,064 — — 1,064 1,064 Securities held to maturity — 37 — 37 34 Other investments — — 12,063 12,063 12,063 Loans, including held for sale, net — — 2,139,645 2,139,645 2,130,492 Bank-owned life insurance — 51,430 — 51,430 51,430 Servicing asset — 186 — 186 186 Accrued interest receivable — 6,674 — 6,674 6,674 Interest rate swaps with customers — 430 — 430 430 Interest rate swaps with financial institutions — 350 — 350 350 Total financial assets $ 383,167 $ 264,587 $ 2,151,708 $ 2,799,462 $ 2,790,306 Financial liabilities: Noninterest-bearing deposits $ 1,025,425 $ — $ — $ 1,025,425 $ 1,025,425 Interest-bearing deposits — 1,451,512 — 1,451,512 1,515,335 Repurchase agreements — 2,342 — 2,342 2,343 Junior subordinated debt — 6,726 — 6,726 6,726 Note payable — 27,679 — 27,679 27,679 Accrued interest payable — 582 — 582 582 Interest rate swaps with customers — 350 — 350 350 Interest rate swaps with financial institutions — 430 — 430 430 Total financial liabilities $ 1,025,425 $ 1,489,621 $ — $ 2,515,046 $ 2,578,870 The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair values of all financial instruments have been determined as follows: Cash and Cash Equivalents and Time Deposits in Other Banks —For these short‑term instruments, the carrying amount is a reasonable estimate of fair value. Other Investments —Other investments consist of other correspondent bank stocks and CRA investments. For these investments, cost, which is generally the carrying amount, is a reasonable estimate of fair value due to redemption restrictions. Loans —Fair values of loans are estimated for segregated groupings of loans with similar financial characteristics. Loans are segregated by segment such as real estate, commercial and agricultural, consumer and other loans. Each of these categories is further subdivided into fixed and adjustable rate loans and performing and nonperforming loans. The fair value of performing loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the various types of loans. Discount rates ranged from 2.30% to 16.50%. These rates reflect the rate environment for repricing the respective category of loans at December 31, 2017 and 2016. The fair value of the residential mortgage loans that are sold in the secondary market is estimated to be the carrying amount due to the short‑term nature of these loans. Bank‑owned Life Insurance —The carrying value for the cash value of life insurance is based on information received from the insurance carriers indicating the financial performance of the policies and the amount the Company would receive should the policies be surrendered and is considered a reasonable estimate of fair value. Deposits —The fair values for demand deposits are reported at a value equal to the amount payable on demand at the reporting date. Fair values for certificates of deposit, savings accounts and money market deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on similar deposits to a schedule of aggregated expected monthly maturities. Repurchase Agreements —For these short‑term borrowings, carrying value is deemed to be a reasonable estimate of their fair value. Junior Subordinated Debentures —The fair value for these debentures is considered to be the carrying value due to the variable rate feature of the instruments. Servicing Assets —Fair value of the servicing assets is estimated using discounted cash flows based on current market interest rates. Accrued Interest —The carrying amounts of accrued interest approximate their fair value due to short-term maturity.

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	Dec. 31, 2017
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 20: EARNINGS PER SHARE Basic earnings per common share is computed as net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted‑average number of shares determined for the basic earnings per common share computation plus the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method. The following table illustrates the computation of basic and diluted earnings per share: Year Ended December 31, (Dollars in thousands, except per share data) 2017 2016 2015 Net income for common shareholders $ 27,571 $ 27,208 $ 24,136 Weighted-average shares (thousands) Basic weighted-average shares outstanding 22,457 22,049 22,462 Dilutive effect of outstanding stock options and unvested restricted stock awards 116 186 213 Diluted weighted-average shares outstanding 22,573 22,235 22,675 Earnings per share: Basic $ 1.23 $ 1.23 $ 1.07 Diluted $ 1.22 $ 1.22 $ 1.06

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2017
SHAREHOLDERS' EQUITY
SHAREHOLDERS’ EQUITY	NOTE 21: SHAREHOLDERS’ EQUITY On September 19, 2017, the Company amended and restated the Company’s certificate of formation to, among other things, change the Company’s name to CBTX, Inc., to increase the number of authorized preferred and common shares which the Company has the authority to issue and to reduce the par value of these shares to $0.01. The par value per share and the authorized number of shares of each class of stock changed resulting from this amendment to the certificate of formation are as follows: Authorized Par Value Par Value Number of Authorized per Share per Share Shares Number of Prior to Post Prior to Shares Post Line Item Amendment Amendment Amendment Amendment Preferred Stock $ 10.00 $ 0.01 1,000,000 10,000,000 Common Stock $ 10.00 $ 0.01 15,000,000 90,000,000 Also, on September 20, 2017, the Board of Directors of the Company approved a 2‑for‑1 stock split, whereby each shareholder of the Company’s common stock received one additional share of common stock for each share owned at the record date of September 30, 2017 in the form of a stock dividend that was distributed on October 13, 2017. The effects of the change in par value of the Company’s shares and the stock split on outstanding shares and per share figures have been retroactively applied to all periods presented as if the transaction had occurred as of the beginning of the earliest period presented. In addition, the number of shares of common stock underlying the Company’s stock options were proportionately increased and the exercise price of each stock option was proportionately decreased retroactively for all periods presented. On November 10, 2017, the Company completed its initial public offering of 2,760,000 shares of its common stock at a price of $26.00 per share. Proceeds from this offering, net of $7.2 million of underwriting discounts and offering expenses paid by the Company, were $64.5 million.

PARENT COMPANY

PARENT COMPANY	12 Months Ended
	Dec. 31, 2017
PARENT COMPANY
PARENT COMPANY	NOTE 22: PARENT COMPANY The following balance sheets, statements of income and statements of cash flow for CBTX, Inc. should be read in conjunction with the consolidated financial statements and the related notes. CBTX, INC. (Parent Company Only) Condensed Balance Sheets At December 31, (Dollars in thousands) 2017 2016 Assets Cash and due from banks $ 45,636 $ 5,057 Investment in subsidiary 407,305 387,179 Deferred tax asset, net 141 464 Other assets 2,460 1,244 Total assets $ 455,542 $ 393,944 Liabilities and shareholders' equity Liabilities Junior subordinated debt $ 6,726 $ 6,726 Note payable — 27,679 Other liabilities 2,602 1,902 Total liabilities 9,328 36,307 Shareholders’ equity Preferred stock $ — $ — Common stock 257 230 Additional paid-in capital 343,249 278,501 Retained earnings 118,353 95,274 Treasury stock (15,256) (15,446) Accumulated other comprehensive loss (389) (922) Total shareholders’ equity $ 446,214 $ 357,637 Total liabilities and shareholders’ equity $ 455,542 $ 393,944 CBTX, INC. (Parent Company Only) Condensed Income Statements For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Interest income Other $ 142 $ 120 $ 10 Interest expense Note payable 906 1,061 932 Junior subordinated debt 322 266 217 Total interest expense 1,228 1,327 1,149 Net interest expense (1,086) (1,207) (1,139) Noninterest income Dividend income from subsidiary 8,806 12,250 30,400 Other — — 1,025 Total noninterest income 8,806 12,250 31,425 Noninterest expense Salaries and employee benefits 344 225 197 Net occupancy expense — 14 — Data processing 37 28 26 Printing, stationery and office 20 10 5 Professional and director fees 842 341 276 Merger expense — — 546 Other expenses 17 31 38 Total noninterest expense 1,260 649 1,088 Income before income tax benefit and equity in undistributed income of subsidiary 6,460 10,394 29,198 Income tax benefit (1,518) (639) (326) Income before equity in undistributed income of subsidiary 7,978 11,033 29,524 Equity in undistributed income (loss) of subsidiary 19,593 16,175 (5,388) Net income $ 27,571 $ 27,208 $ 24,136 CBTX, INC. (Parent Company Only) Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Cash flows from operating activities: Net income $ 27,571 $ 27,208 $ 24,136 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Gain on redemption of junior subordinated debt — — (1,025) Stock-based compensation expense 329 43 12 Equity in undistributed net (income) loss of subsidiary (19,593) (16,175) 5,388 Deferred tax provision 391 295 (502) Change in operating assets and liabilities: Other assets (1,216) 1,808 2,378 Other liabilities 552 (97) 28 Total adjustments (19,537) (14,126) 6,279 Net cash provided by operating activities 8,034 13,082 30,415 Cash flows from investing activities: Acquisition of MCBI, net of cash acquired — — (50,414) Net cash used in investing activities — — (50,414) Cash flows from financing activities: Proceeds from sale of common stock in initial public offering 64,519 — — Purchase of treasury stock — (11,079) (4,418) Proceeds from issuance of treasury stock for exercise of stock options 117 3,883 160 Purchase of trust preferred securities — — (3,075) Proceeds from note payable — — 31,000 Repayment of note payable (27,679) (3,321) — Dividends paid on common stock (4,412) (4,395) (4,487) Net cash provided (used) in financing activities 32,545 (14,912) 19,180 Net decrease in cash and cash equivalents 40,579 (1,830) (819) Cash and cash equivalents, beginning 5,057 6,887 7,706 Cash and cash equivalents, ending $ 45,636 $ 5,057 $ 6,887

QUARTERLY FINANCIAL DATA (UNAUD

QUARTERLY FINANCIAL DATA (UNAUDITED)	12 Months Ended
	Dec. 31, 2017
QUARTERLY FINANCIAL DATA (UNAUDITED)
QUARTERLY FINANCIAL DATA (UNAUDITED)	NOTE 23: QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables present certain unaudited consolidated quarterly financial data for each of the two years indicated below. Earnings per share for each quarter is computed individually from the year to date earnings per share and the sum of the quarters may not equal earnings per share for the year. Year Ended December 31, 2017 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 27,998 $ 28,726 $ 29,569 $ 30,366 Interest expense 2,165 2,201 2,318 2,201 Net interest income 25,833 26,525 27,251 28,165 Provision (recapture) for loan losses 960 (694) (1,654) 1,050 Net interest income after provision (recapture) for loan losses 24,873 27,219 28,905 27,115 Noninterest income 3,448 3,526 4,086 3,144 Noninterest expense 18,427 18,859 19,017 21,989 Income before income taxes 9,894 11,886 13,974 8,270 Income tax expense 3,032 3,181 3,927 6,313 Net income $ 6,862 $ 8,705 $ 10,047 $ 1,957 Earnings per share: Basic $ 0.31 $ 0.39 $ 0.46 $ 0.08 Diluted $ 0.31 $ 0.39 $ 0.45 $ 0.08 Year Ended December 31, 2016 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 26,803 $ 27,442 $ 27,695 $ 28,011 Interest expense 1,928 2,055 2,178 2,244 Net interest income 24,875 25,387 25,517 25,767 Provision for loan losses 1,725 975 1,225 650 Net interest income after provision for loan losses 23,150 24,412 24,292 25,117 Noninterest income 4,226 3,572 3,551 4,400 Noninterest expense 18,066 18,768 18,030 18,638 Income before income taxes 9,310 9,216 9,813 10,879 Income tax expense 2,811 2,845 3,032 3,322 Net income $ 6,499 $ 6,371 $ 6,781 $ 7,557 Earnings per share: Basic $ 0.29 $ 0.29 $ 0.31 $ 0.34 Diluted $ 0.29 $ 0.29 $ 0.31 $ 0.34

BASIS OF PRESENTATION, NATURE32

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2017
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Basis of Presentation	Basis of Presentation —The accompanying consolidated financial statements include the accounts of the Company and the Bank, a wholly-owned subsidiary of the Company. All material intercompany balances and transactions have been eliminated in consolidation.
Reclassification	Reclassification — Within noninterest expense, telephone and communication costs for 2016 and 2015 have been reclassified from printing, stationery and office to a separate line to conform to the 2017 financial statement presentation in the consolidated statements of income.
Segment Reporting	Segment Reporting —The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit. The Company’s chief operating decision‑maker, the CEO, uses the consolidated results to make operating and strategic decisions.
Use of Estimates	Use of Estimates —In preparing financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate primarily to the determination of the allowance for loan losses, the fair value of the Company’s investment securities, repossessed assets, deferred tax assets, financial instruments and intangible assets.
Cash and Due from Banks	Cash and Due from Banks —The Bank is required to maintain regulatory reserves with the Federal Reserve Bank. The reserve requirements for the Bank were approximately $15.8 million and $16.1 million at December 31, 2017 and 2016, respectively. Accordingly, cash and due from banks balances were restricted to that extent. The majority of cash, cash equivalents and time deposits of the Company are maintained with major financial institutions in the U.S. and have original maturities less than 90 days. Interest-bearing deposit accounts with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and therefore, bear minimal risk. In monitoring this credit risk, the Company periodically evaluates the stability of the financial institutions with which it has deposits. The Company has cash deposits in correspondent financial institutions in excess of the amount insured by the FDIC in the amount of $91.8 million and $79.2 million at December 31, 2017 and 2016, respectively.
Loans	Loans —Through its Bank subsidiary, the Company makes mortgage, commercial and consumer loans to customers throughout counties located in Southeast Texas. The ability of the Company’s debtors to honor their contracts is dependent in part upon the general economic conditions in these areas. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay‑off, are measured at historical cost and generally reported at their outstanding unpaid principal balances, net of any unearned income, charge‑offs and unamortized deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. The Company records lines of credit at their funded portion. All unfunded amounts for loans in process and credit lines are reported as unfunded commitments. Interest income is accrued on the unpaid principal balance. A loan portfolio segment is the level at which an entity develops and documents a systematic methodology to determine the allowance for credit losses and a class of financing receivables as the level of disaggregation of portfolio segments based on the initial measurement attribute, risk characteristics and methods for assessing risk. The Company’s loan portfolio segments are commercial and industrial, real estate, consumer, agriculture and other. The classes of financing receivables within the real estate segment are commercial real estate, construction and development, 1-4 family residential and multi-family residential. The Company selectively extends credit to establish long‑term relationships with its customers. The Company mitigates the risks inherent in lending by focusing on businesses and individuals with demonstrated payment history, historically favorable profitability trends and stable cash flows. In addition to these primary sources of repayment, the Company looks to tangible collateral and personal guarantees as secondary sources of repayment. Lending officers are provided with detailed underwriting policies covering all lending activities in which the Company is engaged and that require all lenders to obtain appropriate approvals for the extension of credit. The Company also maintains documentation requirements and extensive credit quality assurance practices to identify credit portfolio weaknesses as early as possible so any exposures that are discovered may be reduced. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management and the Board of Directors review and approve these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Board of Directors with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.
Government Guaranteed Loans	Government Guaranteed Loans —The Company originates loans that are partially guaranteed by the Small Business Administration, or SBA, and the Company may sell the guaranteed portion of these loans as market conditions and pricing allow for a gain to be recorded on the sale. Loan sales are recorded when control over the transferred asset has been relinquished. Control over the transferred portion is deemed to be surrendered when the assets have been removed from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In calculating the gain on sale of SBA loans, the Company’s investment in the loan is allocated among the unguaranteed portion of the loan, the servicing amount retained and the guaranteed portion of the loan sold, based on the relative fair market value of each portion. The gain on the sold portion of the loan is recognized based on the difference between the sale proceeds and the allocated investment.
Loans Servicing	Loan Servicing —Servicing assets are recognized as separate assets when rights are acquired through the sale of financial assets. Servicing assets are initially recorded at fair market value and amortized in proportion to and over the service period and assessed for impairment or increased obligation based on fair value at each reporting date. Fair market value is based on the gross coupon less an assumed contractual servicing cost. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of the loan servicing rights is netted against loan servicing fee income.
Nonrefundable Fees and Costs Associated with Lending Activities	Nonrefundable Fees and Costs Associated with Lending Activities —Loan origination and commitment fees are deferred and accreted into income over the term of the loan. The unamortized balance of deferred loan fees reduces the investment in loans on the balance sheet. In addition, direct origination costs are deferred and amortized against interest income over the term of the loan. The unamortized balance of deferred origination costs is added to the investment in loans on the balance sheet.
Nonperforming Loans and Past Due Loans	Nonperforming Loans and Past Due Loans —Included in the nonperforming loan category are loans which have been categorized by management as nonaccrual because of delinquency status or because collection of interest is doubtful and loans which have been restructured to provide a reduction in the interest rate or a deferral of interest or principal payments. When the payment of principal or interest on a loan is delinquent for 90 days, or earlier in some cases, the loan is placed on nonaccrual status, unless the loan is in the process of collection or renewal and the underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan and the probability that the Company will collect all principal and interest amounts outstanding. When a loan is placed on nonaccrual status, interest accrued and uncollected during the current year prior to the judgment of uncollectability is charged to operations, unless the loan is well secured with collateral values sufficient to ensure collection of both principal and interest. Generally, any payments received on nonaccrual loans are applied first to outstanding loan amounts, reducing the Company’s recorded investment in the loan and next to the recovery of charged‑off principal or interest amounts. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is defined as impaired if, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. The allowance for loan losses related to impaired loans is determined based on the difference between the carrying value of loans and the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Interest income received on impaired loans is either applied against principal or realized as interest income, according to management’s judgment as to the collectability of principal.
Trouble Debt Restructurings	Troubled Debt Restructurings —The Company will classify a loan as a troubled debt restructuring if both (i) the borrower is experiencing financial difficulties and (ii) the borrower has been granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Interest is generally accrued on such loans in accordance with the new terms.
Allowances for Loan Losses	Allowance for Loan Losses —The allowance for loan losses represents management’s estimate of probable losses inherent in the Company’s lending portfolio. Credit exposures deemed to be uncollectible are charged against these accounts. Cash recovered on previously charged‑off amounts is recorded as a recovery to these accounts. The allowance for loan losses does not include amounts related to accrued interest receivable as accrued interest receivable is reversed when a loan is placed on nonaccrual or is charged‑off. The Company employs a systematic methodology for determining the allowance for loan losses that consists of two components: (i) specific valuation allowances based on probable losses on specific loans and (ii) historical valuation allowances based on historical average loss experience for similar loans with similar characteristics and trends adjusted, as necessary, to reflect the impact of current conditions and further adjusted for general economic conditions and other risk factors both internal and external to the Company. Except for groups of smaller‑balance homogenous loans, a loan is considered impaired when, based on current information, it is probable that the borrower will be unable to pay contractual interest or principal payments as scheduled in the loan agreement. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The specific allowance related to an impaired loan is established when the carrying value of the loan is more than the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The Company uses fair market value, less reasonable and customary costs to sell, for collateral dependent loans. In certain instances, a specific allowance will be established to protect against market deterioration. The allowance on the remaining portfolio segments is calculated using historical loss rates adjusted for qualitative factors. Criticized and classified loans, not deemed impaired, are subject to an allowance based on the historical loss migration analysis by grade adjusted for qualitative factors. Pass loans are subject to an allowance based on historical losses by product type adjusted for qualitative factors. The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio. The general valuation factor is based upon a more qualitative analysis of risk. Various risks are considered in the determination of the environmental adjustment factor such as asset quality, lending management and staff, loan policies and procedures, loan review, credit concentrations, loan volumes, collateral values, compliance and economic trends. A majority of the loan portfolio is comprised of loans to businesses and individuals in the Houston metropolitan and Beaumont area. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses
Concentration of Risk	Concentrations of Risk —The Company’s investments are potentially subject to various levels of risk associated with economic and political events beyond management’s control. Consequently, management’s judgment as to the level of losses that currently exist or may develop in the future involves the consideration of current and anticipated conditions and their potential effects on the Company’s investments. Due to the level of uncertainty related to changes in the value of investment securities, it is possible that changes in risks could materially impact the amounts reflected herein. Generally, all of the Company’s loans, loan commitments, and letters of credit have been granted to customers in the counties in Texas in which it operates branch facilities. The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions. Concentrations of credit by type of loan are set forth in Note 4. It is the Company’s policy to not extend credit to any single borrower or group of related borrowers in excess of its subsidiary Bank’s legal lending limits as defined by state and federal banking regulations. The regional economy of certain counties where the Company operates depends heavily on the forestry and oil and gas industries. The ultimate collectability and performance of a substantial portion of the Company’s loan portfolio is dependent on the local market conditions in all counties in which the Company operates.
Loans Held for Sale	Loans Held for Sale —Loans held for sale include mortgage loans originated with the intent to sell on the secondary market. These loans are held for an interim period, usually less than 30 days. Accordingly, these loans are classified as held for sale and are carried at cost, which is determined on an aggregate basis and deemed to be the equivalent of fair value based on the short-term nature of the loans.
Securities	Securities — Securities that the Company intends to hold for an indefinite period of time are classified as available for sale and are carried at fair value. Unrealized gains and losses are excluded from earnings and reported as a separate component of shareholders’ equity until realized. Securities within the available for sale portfolio may be used as part of the Company’s asset/liability strategy and may be sold in response to changes in interest risk, prepayment risk or other similar economic factors. Securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity and are carried at cost, adjusted for the amortization of premiums and the accretion of discounts. Management has the positive intent and the ability to hold these long‑term securities until their scheduled maturities. Securities are accounted for on a trade date basis. Premiums and discounts are amortized and accreted to income using the level‑yield method of accounting, adjusted for prepayments as applicable. Interest earned on these assets is included in interest income. The specific identification method of accounting is used to compute gains or losses on the sales of these assets. Securities are evaluated for other‑than‑temporary impairment, or OTTI, on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining OTTI, management considers many factors, including: (i) the duration and the extent to which the fair value has been less than cost, (ii) the financial condition and near‑term prospects of the issuer and (iii) the intent and the ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The assessment of whether an other‑than‑temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or will be required to sell the security before recovery of its amortized cost basis, less any current‑period credit loss. If the Company intends to sell the security or it is more likely that the Company will be required to sell the security before recovery of its amortized cost basis less any current‑period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not likely that the Company will be required to sell the security before recovery of its amortized cost basis, less any current‑period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.
Other Investments	Other Investments —Banks that are members of the Federal Home Loan Bank, or FHLB, are required to maintain a stock investment in the FHLB calculated as a percentage of aggregate outstanding mortgages, outstanding FHLB advances and other financial instruments. Both stock and cash dividends may be received on FHLB stock and are recorded when received as interest income. At December 31, 2017 and 2016, the Company held $1.2 million in FHLB stock. Banks that are members of the Federal Reserve System are required to annually subscribe to Federal Reserve Bank stock in specific ratios to the Bank’s equity. Although the par value of the stock is $100 per share, member banks pay only $50 per share at the time of purchase with an understanding that the other half of the subscription amount is subject to call at any time. The stock does not provide the owner with control or financial interest in the Federal Reserve Bank, is non‑transferable and cannot be used as collateral. Dividends are received in the form of cash and are recorded as interest income when received. At December 31, 2017 and 2016, the Company held $9.3 million in Federal Reserve Bank stock, which is included in other investments on the consolidated balance sheets. The Company also held an investment totaling $141,000 in the stock of The Independent Bankers Financial Corporation, or TIB, at December 31, 2017 and 2016, which is included in other investments on the consolidated balance sheets. Investments in stock of the FHLB, the Federal Reserve Bank and TIB are restricted investments due to limited marketability and are stated at cost as management believes their cost value is ultimately recoverable. The Company has investments in two private investment funds and a limited partnership, which totaled $1.6 million and $1.5 million at December 31, 2017 and 2016, respectively, included in other investments on the consolidated balance sheets. These investments are qualified Community Reinvestment Act, or CRA, investments under the Small Business Investment Company, or SBIC, program of the SBA. The investments are stated at cost, which management believes to be recoverable and have required periodic capital calls. Unfunded commitments related to these investments totaled $3.8 million at December 31, 2017.
Premises and Equipment	Premises and Equipment —Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation expense is computed on the straight‑line method over the estimated useful lives of the assets. Land is carried at cost. Leasehold improvements are amortized over the life of the lease, plus renewal options or the estimated useful lives, whichever is shorter. Buildings are depreciated over a period not to exceed thirty-two years. Depending upon the type of furniture and equipment, the depreciation period will range from three to ten years. Bank vehicles are amortized over a period of three years. Gains and losses on dispositions are included in other noninterest income. During periods of real estate development, interest on construction costs is capitalized if considered material by management.
Goodwill, Servicing Assets and Intangible Assets	Goodwill, Servicing Assets and Intangible Assets —Goodwill is evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred. Impairment would exist if the fair value of the reporting unit at the date of the test is less than the goodwill recorded on the financial statements. If an impairment of goodwill exists, a loss would then be recognized in the consolidated financial statements to the extent of the impairment. The Company’s identified intangibles are core deposits, customer relationship intangibles and loan servicing assets and these intangibles are being amortized over their estimated useful lives. Our intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. Core deposit intangibles are amortized over a seven to ten-year period using an accelerated method in keeping with the anticipated benefits derived from those core deposits. Customer relationship intangibles are being amortized over a fifteen-year period on a straight-line basis. Capitalized servicing assets are amortized into noninterest expense in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. The servicing asset is assessed for impairment or increased obligation based on fair value at each reporting date. Fair value is based on the gross coupon less an assumed contractual servicing cost, or based upon discounted cash flows using market‑based assumptions. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned.
Bank owned life insurance	Bank-owned life insurance —The Company has purchased life insurance policies on certain employees, which are carried on the consolidated balance sheet at their cash surrender value. Increases to the cash surrender value of the policies are recorded in noninterest income. Expenses related to life insurance policies are recorded in other noninterest expense.
Repossessed Real Estate and Other Assets	Repossessed Real Estate and Other Assets —Real estate and other assets acquired through repossession or foreclosure are held for sale and are initially recorded at the fair value of the asset less any selling costs, establishing a new cost basis. Outstanding loan balances are reduced to reflect this value through charges to the allowance for possible credit losses. Subsequent to repossession or foreclosure, the asset is carried at the lower of its new cost basis or fair value, less estimated costs to sell. Subsequent adjustments to reflect changes in value below the recorded amounts are recognized in income in the period such determinations are assessed. Required developmental costs associated with foreclosed property under construction are capitalized and considered in determining the fair value of the property. Operating expenses of these assets, net of related income and gains and losses on their disposition are included in other noninterest income or expense.
Other Assets	Other Assets —Included in other assets on the Company’s consolidated balance sheets are accrued interest receivables on loans and investments, prepaid expenses and other miscellaneous assets.
Repurchase Agreements	Repurchase Agreements —The Company utilizes securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate short‑term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Pledged securities are maintained with our safekeeping agent.
Derivative Financial Instruments	Derivative Financial Instruments —All derivatives are recorded at fair value on the balance sheet. Derivatives executed with the same counterparty are generally subject to master netting arrangements. Fair value amounts recognized for derivatives and fair value amounts recognized for the right/obligation to reclaim/return cash collateral are not offset for financial reporting purposes. The Company did not have derivative instruments that qualified for hedge accounting during the years ended December 31, 2017, 2016 or 2015, but it may in the future as circumstances arise. The Company’s hedging policies permit the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities. The Company has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. See further discussion of the Company’s outstanding derivative instruments in Note 14.
Fair Value Measurements	Fair Value Measurements —Fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is estimated based upon models that primarily use, as inputs, observable market‑based parameters. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the entity’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company has not elected to account for any financial assets or liabilities as trading instruments, which would require changes in market value on these instruments be recorded in the Company’s consolidated statements of income.
Treasury Stock	Treasury Stock —The Company has repurchased shares of its authorized and issued common stock which is now held in treasury pending use for general corporate purposes or retirement. In 2016 and 2015, 635,100 and 246,708 shares of stock were purchased at an average price of $17.56 and $17.60 per share, respectively. There were no shares of stock purchased during 2017.
Income Taxes	Income Taxes —The Company prepares and reports income taxes on a consolidated basis. Income tax expense is recognized for the tax effects of the transactions reported in the consolidated financial statements and consist of taxes currently due, plus deferred taxes related primarily to differences between the book and tax basis of the allowance for possible credit losses, the amortization of identifiable intangibles and accumulated depreciation. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized. In addition, management does not believe there are any unrecorded deferred tax liabilities that are material to the financial statements. During 2017, a comprehensive U.S. tax reform package, the Tax Cuts and Jobs Act, or Tax Act, was enacted which, among other things, lowered the corporate income tax rate from 35% to 21%. As a result, the Company remeasured its deferred tax assets and liabilities at December 31, 2017 for the change in rate. See Note 15. The Company believes that all significant tax positions utilized by the Company will more likely than not be sustained upon examination by the taxing authorities based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements would be the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. For the years ended December 31, 2017 and 2016, management has determined there are no material uncertain tax positions.
Transfers of Financial Assets	Transfers of Financial Assets —Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (iii) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. If a transfer of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset does not meet the conditions for sale treatment, or if a transfer of a portion of an entire financial interest does not meet the definition of a participating interest, the transferor and the transferee shall account for the transfer as a secured borrowing with pledge of collateral. The transferor shall continue to report the transferred financial assets in its financial statements with no change in their measurement. The Company’s loan participations sold subject to this guidance which met the conditions to be treated as a sale were recorded as such. Any securities sold under agreements to repurchase that did not meet the criteria are included in securities available for sale and repurchase agreements in the Company’s consolidated balance sheets.
Stock-Based Compensation	Stock‑Based Compensation —Stock-based compensation is recognized as compensation cost in the consolidated statements of income based on the fair value on the date of grant. A Black‑Scholes model is utilized to estimate the fair value of stock options and the market value of the Company’s common stock at the date of grant is used as the estimate of fair value of restricted stock. Compensation expense is recognized over the required service period, generally defined as the vesting period, on a straight-line basis.
Interest Rate Risk	Interest Rate Risk —The Company is principally engaged in providing short‑term commercial loans with interest rates that fluctuate with various market indices and intermediate‑term, fixed rate real estate loans. These loans are primarily funded through short‑term demand deposits and longer‑term certificates of deposit with fixed rates. Deposits that are not utilized to fund loans are invested in federal funds or securities that meet the Company’s investment quality guidelines. A portion of the Company’s investments that are available for sale have contractual maturities extending beyond 10 years, bear fixed rates of interest and are collateralized by residential mortgages. Repayment of principal on these bonds is primarily dependent on the cash flows received from payments on the underlying collateral to the bond issuer and therefore, the likelihood of prepayment is impacted by the current economic environment. Reduced prepayments could extend the Company’s original anticipated holding period, or duration and thus increase interest rate risk over time, should market rates increase.
Comprehensive Income	Comprehensive Income —Comprehensive income includes net income along with certain changes in assets and liabilities such as unrealized gains and losses on available for sale securities, which are reported as a separate component in the equity section of the consolidated balance sheets.
Accounting Standards Recently Adopted and Not Yet Adopted	Accounting Standards Recently Adopted The Jumpstart Our Business Startups, or JOBS Act permits an “emerging growth company” to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. However, the Company decided not to take advantage of this provision. As a result, the Company will comply with new or revised accounting standards to the same extent that compliance is required for non‑emerging growth companies. Our decision to opt out of the extended transition period under the JOBS Act is irrevocable. Accounting Standards Update, or ASU, 2016‑05, Derivatives and Hedging (Topic 815:) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships . ASU 2016‑05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require redesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016‑05 was effective on January 1, 2017 and it did not have a significant impact on the consolidated financial statements. ASU 2016‑07, Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting . The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016‑07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016‑07 became effective on January 1, 2017 and did not have a significant impact on the consolidated financial statements. ASU 2016‑09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share‑Based Payment Accounting . ASU 2016‑09 simplifies several aspects of the accounting for employee share‑based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Per ASU 2016‑09: (i) all excess tax benefits and tax deficiencies should be recognized as income tax expense or benefit in the income statement, rather than in additional paid‑in capital under current guidance; (ii) excess tax benefits should be classified along with other income tax cash flows as an operating activity on the statement of cash flows, rather than as a separate cash inflow from financing activities and cash outflow from operating activities under current guidance; (iii) cash paid by an employer when directly withholding shares for tax‑withholding purposes should be classified as a financing activity; and (iv) an entity can make an entity‑wide accounting policy election to either estimate the number of awards that are expected to vest, as under current guidance, or account for forfeitures when they occur. Effective January 1, 2017, the Company adopted ASU 2016‑09. There was no material impact for the year ended December 31, 2017 and the Company does not expect a material impact in future periods. The Company prospectively applied the guidance for the presentation of excess tax benefits as an operating cash flow with no material impact for the year ended December 31, 2017. Finally, the Company elected to account for forfeitures as they occur. ASU 2018-02, Income Statement Reporting – Reporting Comprehensive Income (Topic 220): Reclassifications of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from other comprehensive income to retained earnings for tax effects that would otherwise be “stranded” as a result of adjustments required due to the Tax Act. The Company implemented ASU 2018-02 effective December 31, 2017, in conjunction with the deferred tax asset and liability remeasurement required as a result of the Tax Act with no material impact for the year ended December 31, 2017. Accounting Standards Not Yet Adopted ASU 2014‑09, Revenue from Contracts with Customers (Topic 606): ASU 2014‑09 requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014‑09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015‑14, which deferred the effective date of ASU 2014‑09 by one year to January 1, 2018. The Company’s revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014‑09 and noninterest income. The Company adopted ASU 2014-09 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements. ASU 2016‑01, Financial Instruments‑Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016‑01, 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 investments. The Company implemented ASU 2016-01 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements. ASU 2016‑02 , Leases (Topic 842): ASU 2016‑02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and 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. ASU 2016‑02 does not significantly change lease accounting requirements applicable to lessors. Certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers .” ASU 2016‑02 will be effective for the Company on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016‑02 on the consolidated financial statements. ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016‑13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016‑13 amends the accounting for credit losses on available‑for‑sale debt securities and purchased financial assets with credit deterioration. ASU 2016‑13 will be effective on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016‑13 on the consolidated financial statements. ASU 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016‑15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. The Company implemented ASU 2016‑15 effective January 1, 2018. The Company has elected to use the nature of distribution approach to determine the nature of distribution approach to determine whether income received from equity investments is operating or investing on the cash flow statement. Based on the previous nature of previous income streams from our equity investments, we expect these amounts will continue to be reported in operating on the cash flow statement and the other items in ASU 2016-15 will be considered if such items arise. ASU 2016‑16, Income Taxes (Topic 740): Intra‑Entity Transfers of Assets Other Than Inventory . ASU 2016‑16 provides guidance stating that an entity should recognize the income tax consequences of an intra‑entity transfer of an asset other than inventory when the transfer occurs. The Company implemented ASU 2016‑16 effective January 1, 2018. As we have not historically transferred assets between entities, we expect no impact on the consolidated financial statements. ASU 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016‑18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. The Company implemented ASU 2016‑18 effective January 1, 2018. The only cash the Company has considered to be restricted is the amount of our Federal Bank reserves, which we had already included in cash and equivalents in the consolidated financial statements. ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017‑01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU 2017‑01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company implemented ASU 2017‑01 effective January 1, 2018 and will follow this guidance for any future acquisitions or dispositions. ASU 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, ASU 2017‑04 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the potential impact of this pronouncement. ASU 2017‑09, Compensation—Stock Compensation (Topic 718): ASU 2017-09 provides guidance about which changes in terms or conditions of a share‑based award require application of modification accounting. The Company implemented ASU 2017‑09 effective January 1, 2018 and will follow this guidance for any future modifications of share-based awards.
Cash Flow Reporting	Cash Flow Reporting —Cash and cash equivalents include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. Generally, federal funds are sold for one‑day periods. Cash flows are reported net for loans, deposits and short-term borrowings.

BASIS OF PRESENTATION, NATURE33

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2017
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Supplemental disclosures of cash flow information	Year Ended December 31, 2017 2016 2015 Supplemental Disclosures of Cash Flow Information: Cash paid for taxes $ $ 11,390 $ 11,050 Cash paid for interest on deposits and repurchase agreements 7,701 7,051 6,452 Cash paid for interest on notes payable 1,078 1,063 758 Cash paid for interest on junior subordinated debt 315 258 220 Supplemental Disclosures of Non-cash Flow Information: Dividends accrued for restricted stock 11 — — Real estate acquired through foreclosure 881 2,671 823

SECURITIES (Tables)

SECURITIES (Tables)	12 Months Ended
	Dec. 31, 2017
SECURITIES
The amortized cost and estimated fair values of investments in securities	Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2017 Securities available for sale: State and municipal securities $ 60,861 $ 1,173 $ (118) $ 61,916 U.S. Agency Securities: Debt securities 17,315 — (370) 16,945 Collateralized mortgage obligations 61,878 50 (675) 61,253 Mortgage-backed securities 82,510 330 (866) 81,974 Other securities 1,104 — (17) 1,087 Total $ 223,668 $ 1,553 $ (2,046) $ 223,175 Securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 December 31, 2016 Securities available for sale: State and municipal securities $ 58,991 $ 638 $ (650) $ 58,979 U.S. Agency Securities: Debt securities 20,795 — (454) 20,341 Collateralized mortgage obligations 34,005 90 (325) 33,770 Mortgage-backed securities 92,489 516 (1,215) 91,790 Other securities 1,081 — (17) 1,064 Total $ 207,361 $ 1,244 $ (2,661) $ 205,944 Securities held to maturity: Mortgage-backed securities $ 34 $ 3 $ — $ 37
Schedule of amortized cost and estimated fair value of securities by contractual maturities	Securities Available for Sale Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value December 31, 2017 Amounts maturing in: 1 year or less $ 6,203 $ 6,194 $ — $ — 1 year through 5 years 26,811 26,635 — — 5 years through 10 years 9,215 9,348 — — After 10 years 181,439 180,998 33 35 $ 223,668 $ 223,175 $ 33 $ 35 December 31, 2016 Amounts maturing in: 1 year or less $ 5,579 $ 5,570 $ — $ — 1 year through 5 years 28,946 28,937 — — 5 years through 10 years 20,834 20,880 — — After 10 years 152,002 150,557 34 37 $ 207,361 $ 205,944 $ 34 $ 37
Information pertaining to securities with gross unrealized losses	Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized Value Losses Value Losses December 31, 2017 Securities available for sale: State and municipal securities $ 2,494 $ (3) $ 6,516 $ (115) U.S. Agency Securities: Debt securities 4,464 (55) 12,481 (315) Collateralized mortgage obligations 44,116 (380) 9,938 (295) Mortgage-backed securities 22,079 (123) 32,538 (743) Other securities — — 1,087 (17) $ 73,153 $ (561) $ 62,560 $ (1,485) December 31, 2016 Securities available for sale: State and municipal securities $ 22,856 $ (647) $ 313 $ (3) U.S. Agency Securities: Debt securities 18,341 (454) — — Collateralized mortgage obligations 24,800 (325) — — Mortgage-backed securities 67,500 (1,215) — — Other securities 1,064 (17) — — $ 134,561 $ (2,658) $ 313 $ (3)

LOANS (Tables)

LOANS (Tables)	12 Months Ended
	Dec. 31, 2017
LOANS
Loans, including loans held for sale, by portfolio segment	(Dollars in thousands) December 31, 2017 December 31, 2016 Commercial and industrial $ 559,363 24.1 % $ 511,554 23.7 % Real estate: Commercial real estate 738,293 31.9 % 697,794 32.3 % Construction and development 449,211 19.4 % 491,626 22.8 % 1-4 family residential 258,584 11.2 % 236,882 11.0 % Multi-family residential 220,305 9.5 % 133,210 6.2 % Consumer 40,433 1.7 % 39,694 1.8 % Agriculture 11,256 0.5 % 11,106 0.5 % Other 40,344 1.7 % 38,180 1.7 % Total gross loans 2,317,789 100.0 % 2,160,046 100.0 % Less deferred loan fees (4,555) (4,321) Less unearned discount on retained portion of loans sold (230) (227) Less allowance for loan loss (24,778) (25,006) Total loans, net 2,288,226 2,130,492 Less loans held for sale 1,460 613 Loans, net $ 2,286,766 $ 2,129,879
Loan participations purchased and sold	Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period December 31, 2017 Commercial and industrial $ — $ 23,000 Commercial real estate 12,885 20,505 Construction and development 5,606 2,562 $ 18,491 $ 46,067 December 31, 2016 Commercial real estate $ — $ 654 Construction and development — 4,294 $ — $ 4,948 December 31, 2015 Commercial and industrial $ 1,674 $ — Construction and development 5,097 21,755 Loans to nondepository financial institutions — 5,000 $ 6,771 $ 26,755

LOAN PERFORMANCE (Tables)

LOAN PERFORMANCE (Tables)	12 Months Ended
	Dec. 31, 2017
LOAN PERFORMANCE
Nonaccrual loans, segregated by loan class	December 31, (Dollars in thousands) 2017 2016 Commercial and industrial $ 3,280 $ 2,318 Real estate: Commercial real estate 3,216 2,118 Construction and development 252 458 1-4 family residential 898 1,302 Multi-family residential — 7 Agriculture — 36 Total $ 7,646 $ 6,239
Aging analysis of loans past due segregated by loan class	90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2017 Commercial and industrial $ 943 $ 1,071 $ 2,535 $ 4,549 $ 554,814 $ 559,363 $ — Real estate: Commercial real estate 337 841 1,866 3,044 735,249 738,293 — Construction and development 400 — — 400 448,811 449,211 — 1-4 family residential 807 — 143 950 257,634 258,584 — Multi-family residential — — — — 220,305 220,305 — Consumer 3 25 — 28 40,405 40,433 — Agriculture — — — — 11,256 11,256 — Other — — — — 40,344 40,344 — Total loans $ 2,490 $ 1,937 $ 4,544 $ 8,971 $ 2,308,818 $ 2,317,789 $ — 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2016 Commercial and industrial $ 378 $ 68 $ 2,273 $ 2,719 $ 508,835 $ 511,554 $ — Real estate: Commercial real estate 352 75 1,865 2,292 695,502 697,794 — Construction and development 19 — — 19 491,607 491,626 — 1-4 family residential 377 688 757 1,822 235,060 236,882 — Multi-family residential — — — — 133,210 133,210 — Consumer — — — — 39,694 39,694 — Agriculture — — — — 11,106 11,106 — Other 3 2 — 5 38,175 38,180 — Total loans $ 1,129 $ 833 $ 4,895 $ 6,857 $ 2,153,189 $ 2,160,046 $ —
Loans segregated by loan class, which were restructured due to the borrower’s financial difficulties	During the Year Ended December 31, 2017 Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate Commercial and industrial 2 $ 1,178 $ — $ — $ 1,178 $ — Commercial real estate 4 970 146 667 157 — Total 6 $ 2,148 $ 146 $ 667 $ 1,335 $ — During the Year Ended December 31, 2016 Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate Commercial and industrial 6 $ 5,616 $ — $ 4,936 $ 680 $ — Commercial real estate 2 3,520 — 3,520 — — Other 2 8,213 — 8,213 — — Total 10 $ 17,349 $ — $ 16,669 $ 680 $ —

ALLOWANCE FOR LOAN LOSSES (Tabl

ALLOWANCE FOR LOAN LOSSES (Tables)	12 Months Ended
	Dec. 31, 2017
ALLOWANCE FOR LOAN LOSSES
Allowance for loan losses segregated by loan class	Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2016 Beginning balance $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315 Provision (recapture) for loan loss 5,537 4,193 94 (1,012) 154 222 227 (4,840) 4,575 Charge-offs (4,884) (589) — (3) — (277) (267) (59) (6,079) Recoveries 1,010 108 — 6 — 45 26 — 1,195 Net (charge-offs) recoveries (3,874) (481) — 3 — (232) (241) (59) (4,884) Ending balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Period-end amount allocated to: Specific reserve $ 462 $ 206 $ — $ — $ — $ — $ — $ — $ 668 General reserve 5,947 10,564 4,598 1,286 916 353 79 595 24,338 Total $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2015 Beginning balance $ 7,160 $ 6,985 $ 2,991 $ 1,843 $ 500 $ 423 $ 118 $ 4,932 $ 24,952 Provision (recapture) for loan loss 4,272 (189) 1,513 573 262 (18) (25) 562 6,950 Charge-offs (7,210) (27) — (263) — (102) — — (7,602) Recoveries 524 289 — 142 — 60 — — 1,015 Net (charge-offs) recoveries (6,686) 262 — (121) — (42) — — (6,587) Ending balance $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315 Period-end amount allocated to: Specific reserve $ 357 $ — $ 26 $ — $ — $ 6 $ — $ — $ 389 General reserve 4,389 7,058 4,478 2,295 762 357 93 5,494 24,926 Total $ 4,746 $ 7,058 $ 4,504 $ 2,295 $ 762 $ 363 $ 93 $ 5,494 $ 25,315
Presentation of risk grades and classified loans by loan class	Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2017 Commercial and industrial $ 535,589 $ 8,403 $ 15,371 $ 559,363 Real estate: Commercial real estate 722,503 2,951 12,839 738,293 Construction and development 448,124 565 522 449,211 1-4 family residential 252,317 — 6,267 258,584 Multi-family residential 212,899 7,406 — 220,305 Consumer 40,144 246 43 40,433 Agriculture 11,223 — 33 11,256 Other 33,109 — 7,235 40,344 Total loans $ 2,255,908 $ 19,571 $ 42,310 $ 2,317,789 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2016 Commercial and industrial $ 483,399 $ 2,207 $ 25,948 $ 511,554 Real estate: Commercial real estate 674,445 7,731 15,618 697,794 Construction and development 485,823 933 4,870 491,626 1-4 family residential 234,473 797 1,612 236,882 Multi-family residential 125,553 7,650 7 133,210 Consumer 39,684 10 — 39,694 Agriculture 11,033 — 73 11,106 Other 29,335 — 8,845 38,180 Total loans $ 2,083,745 $ 19,328 $ 56,973 $ 2,160,046
Loan Impairment Assessment	Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2017 Commercial and industrial $ 11,921 $ 6,100 $ 1,192 $ 7,292 $ 852 $ 12,090 Real estate: Commercial real estate 9,646 8,626 667 9,293 64 9,438 Construction and development 296 251 — 251 — 323 1-4 family residential 5,003 3,050 1,874 4,924 119 3,369 Multi-family residential — — — — — 2 Consumer — — — — — 21 Agriculture — — — — — 1 Other 7,152 7,152 — 7,152 — 7,616 Total loans $ 34,018 $ 25,179 $ 3,733 $ 28,912 $ 1,035 $ 32,860 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2016 Commercial and industrial $ 16,483 $ 8,088 $ 4,227 $ 12,315 $ 462 $ 15,550 Real estate: Commercial real estate 6,454 4,398 1,866 6,264 206 5,903 Construction and development 506 476 — 476 — 754 1-4 family residential 1,781 1,712 — 1,712 — 1,403 Multi-family residential 13 7 — 7 — 10 Consumer — — — — — 8 Agriculture 307 36 — 36 — 34 Other 8,849 8,845 — 8,845 — 5,540 Total loans $ 34,393 $ 23,562 $ 6,093 $ 29,655 $ 668 $ 29,202
Allowance for loan losses on the basis of the Company’s impairment methodology	Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Loans individually evaluated for impairment $ 7,292 $ 9,293 $ 251 $ 4,924 $ — $ — $ — $ 7,152 $ 28,912 Loans collectively evaluated for impairment 552,071 729,000 448,960 253,660 220,305 40,433 11,256 33,192 2,288,877 Total $ 559,363 $ 738,293 $ 449,211 $ 258,584 $ 220,305 $ 40,433 $ 11,256 $ 40,344 $ 2,317,789 December 31, 2016 Loans individually evaluated for impairment $ 12,315 $ 6,264 $ 476 $ 1,712 $ 7 $ — $ 36 $ 8,845 $ 29,655 Loans collectively evaluated for impairment 499,239 691,530 491,150 235,170 133,203 39,694 11,070 29,335 2,130,391 Total $ 511,554 $ 697,794 $ 491,626 $ 236,882 $ 133,210 $ 39,694 $ 11,106 $ 38,180 $ 2,160,046

PREMISES AND EQUIPMENT (Tables)

PREMISES AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2017
PREMISES AND EQUIPMENT
Schedule of premises and equipment	Premises and equipment at December 31, 2017 and 2016, are summarized as follows: December 31, (Dollars in thousands) 2017 2016 Land $ 13,466 $ 14,686 Buildings and leasehold improvements 51,664 52,230 Furniture and equipment 14,887 14,814 Vehicles 202 202 Construction in progress — 144 80,219 82,076 Less accumulated depreciation and amortization (26,612) (24,562) Premises and equipment, net $ 53,607 $ 57,514

GOODWILL AND OTHER INTANGIBLE39

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Schedule of intangible assets	Other intangibles assets at December 31, 2017 and 2016 are as follows: Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets December 31, 2017 Other intangible assets, net Core deposits 6.2 years $ 13,750 $ (12,051) $ 1,699 Customer relationships 11.0 years 6,629 (1,767) 4,862 Servicing assets 17.3 years 321 (112) 209 Total other intangible assets, net $ 20,700 $ (13,930) $ 6,770 December 31, 2016 Other intangible assets, net Core deposits 7.1 years $ 13,750 $ (11,448) $ 2,302 Customer relationships 12.0 years 6,629 (1,326) 5,303 Servicing assets 16.8 years 263 (77) 186 Total other intangible assets, net $ 20,642 $ (12,851) $ 7,791
Schedule of changes in related servicing assets	Year Ended December 31, (Dollars in thousands) 2017 2016 Balance at beginning of year $ 186 $ 136 Increase from loan sales 58 80 Amortization charges (35) (30) Balance at end of period $ 209 $ 186
Core deposits and Customer relationship
Finite-Lived Intangible Assets [Line Items]
Schedule of estimated future amortization for core deposits and customer relationship intangible assets	(Dollars in thousands) December 31, 2017 2018 $ 952 2019 860 2020 768 2021 675 2022 584 Thereafter 2,722 Total $ 6,561

BANK OWNED LIFE INSURANCE (Tabl

BANK OWNED LIFE INSURANCE (Tables)	12 Months Ended
	Dec. 31, 2017
BANK OWNED LIFE INSURANCE
Schedule of change in cash surrender value	For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Balance at beginning of year $ 51,430 $ 50,441 $ 34,084 Purchases 15,000 — 15,000 Redemptions — (367) — Earnings, net 1,580 1,356 1,357 Balance at end of year $ 68,010 $ 51,430 $ 50,441

DEPOSITS (Tables)

DEPOSITS (Tables)	12 Months Ended
	Dec. 31, 2017
DEPOSITS
Schedule of deposits	December 31, (Dollars in thousands) 2017 2016 Interest-bearing demand accounts $ 363,015 $ 359,560 Money market accounts 702,299 731,942 Saving accounts 95,842 85,927 Certificates and other time deposits, $100,000 or greater 172,469 179,621 Certificates and other time deposits, less than $100,000 159,558 158,285 Total interest-bearing deposits 1,493,183 1,515,335 Noninterest-bearing deposits 1,109,789 1,025,425 Total deposits $ 2,602,972 $ 2,540,760
Schedule of maturities of time deposits	(Dollars in thousands) December 31, 2017 Three months or less $ 63,482 Over three months through six months 57,471 Over six months through 12 months 84,476 Over 12 months through three years 102,864 Over three years 23,734 Total $ 332,027

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	12 Months Ended
	Dec. 31, 2017
RELATED PARTY TRANSACTIONS
Schedule of loans to related parties	For the Years Ended December 31, (Dollars in thousands) 2017 2016 Balance at beginning of year $ 142,516 $ 136,514 New loans 108,698 81,302 Repayments (45,446) (75,300) Balance at end of year $ 205,768 $ 142,516

COMMITMENTS AND CONTINGENCIES,

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables)	12 Months Ended
	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
Summary of the various financial instruments whose contract amounts represent credit risk	December 31, (Dollars in thousands) 2017 2016 Commitments to extend credit, variable $ 626,441 $ 493,740 Commitments to extend credit, fixed 61,608 113,719 $ 688,049 $ 607,459 Standby letters of credit $ 28,977 $ 26,682
Schedule of the derivative instruments outstanding	Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2017 Interest rate swaps with customers Other Assets $ 25,882 $ 340 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.83 years Interest rate swaps with financial institution Other Assets 16,579 426 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 8.12 years Interest rate swaps with customers Other Liabilities 16,579 (426) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 7.83 years Interest rate swaps with financial institution Other Liabilities 25,882 (340) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 8.12 years Total derivatives not designated as hedging instruments $ 84,922 $ — Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2016 Interest rate swaps with customers Other Assets $ 13,637 $ 430 5.10% - 7.25% LIBOR 1M + 2.50% - 3.25% 6.60 years Interest rate swaps with financial institution Other Assets 14,399 350 4.00% - 4.75% LIBOR 1M + 2.50% - 3.00% 9.45 years Interest rate swaps with customers Other Liabilities 14,399 (350) 4.00% - 4.75% LIBOR 1M + 2.50% - 3.00% 6.60 years Interest rate swaps with financial institution Other Liabilities 13,637 (430) 5.10% - 7.25% LIBOR 1M + 2.50% - 3.25% 9.45 years Total derivatives not designated as hedging instruments $ 56,072 $ —
Schedule of future minimum rent commitments	(Dollars in thousands) December 31, 2017 2018 $ 1,573 2019 1,409 2020 1,394 2021 1,462 2022 1,513 Thereafter 10,833 Total $ 18,184

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
INCOME TAXES
Schedule of the provision for income tax expense	For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Current federal income tax $ 13,364 $ 11,269 $ 12,353 Current state income tax 157 140 102 Deferred income tax 2,932 601 (1,664) Total income tax expense $ 16,453 $ 12,010 $ 10,791
Schedule of effective tax rates	For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Tax expense calculated at statutory rate $ 15,408 $ 13,726 $ 12,225 Increase (decrease) resulting from: State income tax 102 140 102 Tax exempt interest income (1,504) (1,585) (1,349) Life insurance (553) (485) (464) Impact of tax law rate change 3,857 — — Other (857) 214 277 Total income tax expense $ 16,453 $ 12,010 $ 10,791 Effective tax rate 37.4 % 30.7 % 30.9 %
Schedule of net deferred tax asset (liability)	December 31, (Dollars in thousands) 2017 2016 Deferred tax assets: Allowance for possible credit losses $ 5,203 $ 8,752 Compensation related 2,228 1,334 Deferred loan origination fees and loan costs 988 1,512 Loan related 423 1,037 Unrealized loss on securities available for sale 103 496 Other 215 788 Total deferred tax assets 9,160 13,919 Deferred tax liabilities: Accumulated depreciation (1,228) (2,205) Compensation 481(a) adjustment (713) — Core deposit intangibles (1,378) (2,662) Other (61) (21) Total deferred tax liabilities (3,380) (4,888) Net Deferred Tax Asset $ 5,780 $ 9,031

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2017
Stock option plans
STOCK OPTION PLANS
Schedule of summary of activity under the stock option plans	December 31, 2017 2016 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise (Dollars in thousands, except per share data) Options Price Options Price Options outstanding at beginning of period 248,314 $ 12.80 647,074 $ 10.99 Granted 80,000 $ 21.00 — $ — Forfeited (56,832) $ 10.14 (5,062) $ 9.85 Exercised (11,160) $ 10.47 (393,698) $ 9.87 Options outstanding at end of period 260,322 $ 16.00 248,314 $ 12.80
Schedule of fair value of each option grant estimated on the date of grant using the Black-Scholes option pricing model	Year Ended Year Ended December 31, December 31, 2017 2015 Dividend yield 0.95 % 1.19 % Expected volatility 35.97 % 8.96 % Risk free interest rate 2.42 % 2.05 % Expected life in years 6.0 6.0
Schedule of exercisable, unvested and outstanding of stock options and restricted stock	December 31, 2017 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 127,122 133,200 260,322 Weighted-average exercise price per share $ 12.49 $ 19.36 $ 16.00 Aggregate intrinsic value (in thousands) $ 2,183 $ 1,372 $ 3,555 Weighted-average contractual term (years) 4.5 8.6 6.6
Restricted Stock
STOCK OPTION PLANS
Schedule of exercisable, unvested and outstanding of stock options and restricted stock	December 31, 2017 Restricted stock Exercisable Unvested Outstanding Number of shares underlying restricted stock — 212,580 212,580 Weighted-average grant date fair value per share $ — $ 27.27 $ 27.27 Aggregate grant date fair value (in thousands) $ — $ 5,797 $ 5,797 Weighted-average contractual term (years) — 4.4 4.4

REGULATORY MATTERS (Tables)

REGULATORY MATTERS (Tables)	12 Months Ended
	Dec. 31, 2017
REGULATORY MATTERS
Summary of actual and required capital ratios for the Company and Bank under the Basel III Capital Rules	Minimum Minimum Capital Capital Required-Basel Required-Basel Required to be III Phase-in III Fully Considered Well Actual Schedule Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2017 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 361,322 14.2 % $ 114,628 4.5 % $ 178,310 7.0 % $ 165,573 6.5 % Bank Only $ 322,414 12.7 % $ 114,252 4.5 % $ 178,150 7.0 % $ 165,425 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 367,722 14.4 % $ 152,837 6.0 % $ 216,519 8.5 % $ 203,782 8.0 % Bank Only $ 322,414 12.7 % $ 152,700 6.0 % $ 216,325 8.5 % $ 203,600 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 392,878 15.4 % $ 203,782 8.0 % $ 267,464 10.5 % $ 254,728 10.0 % Bank Only $ 347,569 13.7 % $ 203,600 8.0 % $ 267,726 10.5 % $ 254,501 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 367,722 12.3 % $ 119,769 4.0 % $ 119,769 4.0 % $ 149,712 5.0 % Bank Only $ 322,414 10.8 % $ 119,403 4.0 % $ 119,403 4.0 % $ 149,253 5.0 % December 31, 2016 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 274,516 11.5 % $ 107,272 4.5 % $ 166,867 7.0 % $ 154,948 6.5 % Bank Only $ 304,058 12.8 % $ 107,209 4.5 % $ 166,770 7.0 % $ 154,844 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 280,916 11.8 % $ 143,029 6.0 % $ 202,624 8.5 % $ 190,705 8.0 % Bank Only $ 304,058 12.8 % $ 142,946 6.0 % $ 202,507 8.5 % $ 190,594 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 306,287 12.9 % $ 190,705 8.0 % $ 250,300 10.5 % $ 238,381 10.0 % Bank Only $ 329,428 13.8 % $ 190,594 8.0 % $ 250,155 10.5 % $ 238,243 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 280,916 9.8 % $ 114,872 4.0 % $ 114,872 4.0 % $ 143,590 5.0 % Bank Only $ 304,058 10.6 % $ 114,872 4.0 % $ 114,872 4.0 % $ 143,590 5.0 %

FAIR VALUE DISCLOSURES (Tables)

FAIR VALUE DISCLOSURES (Tables)	12 Months Ended
	Dec. 31, 2017
FAIR VALUE DISCLOSURES
Summary financial assets and financial liabilities measured at fair value on a recurring basis	December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Financial assets: Securities available for sale State and municipal securities $ — $ 61,916 $ — $ 61,916 U.S. Agency Securities: Debt securities — 16,945 — 16,945 Collateralized mortgage obligations — 61,253 — 61,253 Mortgage-backed securities — 81,974 — 81,974 Other securities 1,087 — — 1,087 Interest rate swaps with customers — 340 — 340 Interest rate swaps with financial institutions — 426 — 426 Total financial assets $ 1,087 $ 222,854 $ — $ 223,941 Financial liabilities: Interest rate swaps with customers $ — $ 426 $ — $ 426 Interest rate swaps with financial institutions — 340 — 340 Total financial liabilities $ — $ 766 $ — $ 766 December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Financial assets: Securities available for sale State and municipal securities $ — $ 58,979 $ — $ 58,979 U.S. Agency Securities: Debt securities — 20,341 — 20,341 Collateralized mortgage obligations — 33,770 — 33,770 Mortgage-backed securities — 91,790 — 91,790 Other securities 1,064 — — 1,064 Interest rate swaps with customers — 430 — 430 Interest rate swaps with financial institutions — 350 — 350 Total financial assets $ 1,064 $ 205,660 $ — $ 206,724 Financial liabilities: Interest rate swaps with customers $ — $ 350 $ — $ 350 Interest rate swaps with financial institutions — 430 — 430 Total financial liabilities $ — $ 780 $ — $ 780
Summary of certain assets measured on a non‑recurring basis	December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Impaired loans: Commercial and industrial $ — $ — $ 340 $ 340 Commercial real estate — — 603 603 1-4 family residential — — 1,755 1,755 Total impaired loans $ — $ — $ 2,698 $ 2,698 December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Inputs Inputs Inputs Total Impaired loans: Commercial and industrial $ — $ — $ 3,765 $ 3,765 Commercial real estate — — 1,660 1,660 Total impaired loans $ — $ — $ 5,425 $ 5,425
Summary of foreclosed assets that were remeasured subsequent to initial recognition	December 31, December 31, (Dollars in thousands) 2017 2016 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ 881 $ 2,018 Charge-offs recognized in the allowance for loan losses — (47) Fair value $ 881 $ 1,971 Foreclosed assets remeasured subsequent to initial recognition: Carrying value of foreclosed assets prior to measurement $ 227 $ 630 Write-downs included in other noninterest expense (51) (65) Fair value $ 176 $ 565
Summary of fair market values of all financial instruments	Level 1 Level 2 Level 3 Total Carrying (Dollars in thousands) Inputs Inputs Inputs Fair Value Amount December 31, 2017 Financial assets: Cash and due from banks $ 59,255 $ — $ — $ 59,255 $ 59,255 Interest bearing deposits in banks 266,944 — — 266,944 266,944 Time deposits in other banks — 600 — 600 600 Securities available for sale — 222,088 — 222,088 222,088 Other securities 1,087 — — 1,087 1,087 Securities held to maturity — 35 — 35 33 Other investments — — 12,226 12,226 12,226 Loans, including held for sale, net — — 2,299,742 2,299,742 2,288,226 Bank-owned life insurance — 68,010 — 68,010 68,010 Servicing asset — 209 — 209 209 Accrued interest receivable — 7,429 — 7,429 7,429 Interest rate swaps with customers — 340 — 340 340 Interest rate swaps with financial institutions — 426 — 426 426 Total financial assets $ 327,286 $ 299,137 $ 2,311,968 $ 2,938,391 $ 2,926,873 Financial liabilities: Noninterest-bearing deposits $ 1,109,789 $ — $ — $ 1,109,789 $ 1,109,789 Interest-bearing deposits — 1,437,013 — 1,437,013 1,493,183 Repurchase agreements — 1,525 — 1,525 1,525 Junior subordinated debt — 6,726 — 6,726 6,726 Accrued interest payable — 374 — 374 374 Interest rate swaps with customers — 426 — 426 426 Interest rate swaps with financial institutions — 340 — 340 340 Total financial liabilities $ 1,109,789 $ 1,446,404 $ — $ 2,556,193 $ 2,612,363 Level 1 Level 2 Level 3 Total Carrying (Dollars in thousands) Inputs Inputs Inputs Fair Value Amount December 31, 2016 Financial assets: Cash and due from banks $ 53,000 $ — $ — $ 53,000 $ 53,000 Interest bearing deposits in banks 329,103 — — 329,103 329,103 Time deposits in other banks — 600 — 600 600 Securities available for sale — 204,880 — 204,880 204,880 Other securities 1,064 — — 1,064 1,064 Securities held to maturity — 37 — 37 34 Other investments — — 12,063 12,063 12,063 Loans, including held for sale, net — — 2,139,645 2,139,645 2,130,492 Bank-owned life insurance — 51,430 — 51,430 51,430 Servicing asset — 186 — 186 186 Accrued interest receivable — 6,674 — 6,674 6,674 Interest rate swaps with customers — 430 — 430 430 Interest rate swaps with financial institutions — 350 — 350 350 Total financial assets $ 383,167 $ 264,587 $ 2,151,708 $ 2,799,462 $ 2,790,306 Financial liabilities: Noninterest-bearing deposits $ 1,025,425 $ — $ — $ 1,025,425 $ 1,025,425 Interest-bearing deposits — 1,451,512 — 1,451,512 1,515,335 Repurchase agreements — 2,342 — 2,342 2,343 Junior subordinated debt — 6,726 — 6,726 6,726 Note payable — 27,679 — 27,679 27,679 Accrued interest payable — 582 — 582 582 Interest rate swaps with customers — 350 — 350 350 Interest rate swaps with financial institutions — 430 — 430 430 Total financial liabilities $ 1,025,425 $ 1,489,621 $ — $ 2,515,046 $ 2,578,870

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	Dec. 31, 2017
EARNINGS PER SHARE
Schedule of basic and diluted earnings per common share	Year Ended December 31, (Dollars in thousands, except per share data) 2017 2016 2015 Net income for common shareholders $ 27,571 $ 27,208 $ 24,136 Weighted-average shares (thousands) Basic weighted-average shares outstanding 22,457 22,049 22,462 Dilutive effect of outstanding stock options and unvested restricted stock awards 116 186 213 Diluted weighted-average shares outstanding 22,573 22,235 22,675 Earnings per share: Basic $ 1.23 $ 1.23 $ 1.07 Diluted $ 1.22 $ 1.22 $ 1.06

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2017
SHAREHOLDERS' EQUITY
Schedule of the par value per share and the authorized number of shares of each class of stock	Authorized Par Value Par Value Number of Authorized per Share per Share Shares Number of Prior to Post Prior to Shares Post Line Item Amendment Amendment Amendment Amendment Preferred Stock $ 10.00 $ 0.01 1,000,000 10,000,000 Common Stock $ 10.00 $ 0.01 15,000,000 90,000,000

PARENT COMPANY (Tables)

PARENT COMPANY (Tables)	12 Months Ended
	Dec. 31, 2017
PARENT COMPANY
Condensed Balance Sheet	CBTX, INC. (Parent Company Only) Condensed Balance Sheets At December 31, (Dollars in thousands) 2017 2016 Assets Cash and due from banks $ 45,636 $ 5,057 Investment in subsidiary 407,305 387,179 Deferred tax asset, net 141 464 Other assets 2,460 1,244 Total assets $ 455,542 $ 393,944 Liabilities and shareholders' equity Liabilities Junior subordinated debt $ 6,726 $ 6,726 Note payable — 27,679 Other liabilities 2,602 1,902 Total liabilities 9,328 36,307 Shareholders’ equity Preferred stock $ — $ — Common stock 257 230 Additional paid-in capital 343,249 278,501 Retained earnings 118,353 95,274 Treasury stock (15,256) (15,446) Accumulated other comprehensive loss (389) (922) Total shareholders’ equity $ 446,214 $ 357,637 Total liabilities and shareholders’ equity $ 455,542 $ 393,944
Condensed Income Statement	CBTX, INC. (Parent Company Only) Condensed Income Statements For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Interest income Other $ 142 $ 120 $ 10 Interest expense Note payable 906 1,061 932 Junior subordinated debt 322 266 217 Total interest expense 1,228 1,327 1,149 Net interest expense (1,086) (1,207) (1,139) Noninterest income Dividend income from subsidiary 8,806 12,250 30,400 Other — — 1,025 Total noninterest income 8,806 12,250 31,425 Noninterest expense Salaries and employee benefits 344 225 197 Net occupancy expense — 14 — Data processing 37 28 26 Printing, stationery and office 20 10 5 Professional and director fees 842 341 276 Merger expense — — 546 Other expenses 17 31 38 Total noninterest expense 1,260 649 1,088 Income before income tax benefit and equity in undistributed income of subsidiary 6,460 10,394 29,198 Income tax benefit (1,518) (639) (326) Income before equity in undistributed income of subsidiary 7,978 11,033 29,524 Equity in undistributed income (loss) of subsidiary 19,593 16,175 (5,388) Net income $ 27,571 $ 27,208 $ 24,136
Condensed Statements of Cash Flows	CBTX, INC. (Parent Company Only) Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Cash flows from operating activities: Net income $ 27,571 $ 27,208 $ 24,136 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Gain on redemption of junior subordinated debt — — (1,025) Stock-based compensation expense 329 43 12 Equity in undistributed net (income) loss of subsidiary (19,593) (16,175) 5,388 Deferred tax provision 391 295 (502) Change in operating assets and liabilities: Other assets (1,216) 1,808 2,378 Other liabilities 552 (97) 28 Total adjustments (19,537) (14,126) 6,279 Net cash provided by operating activities 8,034 13,082 30,415 Cash flows from investing activities: Acquisition of MCBI, net of cash acquired — — (50,414) Net cash used in investing activities — — (50,414) Cash flows from financing activities: Proceeds from sale of common stock in initial public offering 64,519 — — Purchase of treasury stock — (11,079) (4,418) Proceeds from issuance of treasury stock for exercise of stock options 117 3,883 160 Purchase of trust preferred securities — — (3,075) Proceeds from note payable — — 31,000 Repayment of note payable (27,679) (3,321) — Dividends paid on common stock (4,412) (4,395) (4,487) Net cash provided (used) in financing activities 32,545 (14,912) 19,180 Net decrease in cash and cash equivalents 40,579 (1,830) (819) Cash and cash equivalents, beginning 5,057 6,887 7,706 Cash and cash equivalents, ending $ 45,636 $ 5,057 $ 6,887

QUARTERLY FINANCIAL DATA (UNA51

QUARTERLY FINANCIAL DATA (UNAUDITED (Tables)	12 Months Ended
	Dec. 31, 2017
QUARTERLY FINANCIAL DATA (UNAUDITED)
Schedule of quarterly financial data (unaudited)	Year Ended December 31, 2017 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 27,998 $ 28,726 $ 29,569 $ 30,366 Interest expense 2,165 2,201 2,318 2,201 Net interest income 25,833 26,525 27,251 28,165 Provision (recapture) for loan losses 960 (694) (1,654) 1,050 Net interest income after provision (recapture) for loan losses 24,873 27,219 28,905 27,115 Noninterest income 3,448 3,526 4,086 3,144 Noninterest expense 18,427 18,859 19,017 21,989 Income before income taxes 9,894 11,886 13,974 8,270 Income tax expense 3,032 3,181 3,927 6,313 Net income $ 6,862 $ 8,705 $ 10,047 $ 1,957 Earnings per share: Basic $ 0.31 $ 0.39 $ 0.46 $ 0.08 Diluted $ 0.31 $ 0.39 $ 0.45 $ 0.08 Year Ended December 31, 2016 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 26,803 $ 27,442 $ 27,695 $ 28,011 Interest expense 1,928 2,055 2,178 2,244 Net interest income 24,875 25,387 25,517 25,767 Provision for loan losses 1,725 975 1,225 650 Net interest income after provision for loan losses 23,150 24,412 24,292 25,117 Noninterest income 4,226 3,572 3,551 4,400 Noninterest expense 18,066 18,768 18,030 18,638 Income before income taxes 9,310 9,216 9,813 10,879 Income tax expense 2,811 2,845 3,032 3,322 Net income $ 6,499 $ 6,371 $ 6,781 $ 7,557 Earnings per share: Basic $ 0.29 $ 0.29 $ 0.31 $ 0.34 Diluted $ 0.29 $ 0.29 $ 0.31 $ 0.34

BASIS OF PRESENTATION, NATURE52

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017USD ($)locationsegmentitem$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares	Dec. 31, 2015USD ($)$ / sharesshares
Number of locations | location		33
Number of reportable segment | segment		1
Reserve required at federal reserve bank		$ 15,800,000	$ 16,100,000
Cash deposits in excess of the amount insured by the FDIC		91,800,000	79,200,000
FHLB stock		$ 1,200,000	1,200,000
FRB stock, par value | $ / shares		$ 100
FRB stock, par value - Member's Bank | $ / shares		$ 50
Federal Reserve Bank stock		$ 9,300,000	9,300,000
The Independent Bankers Financial Corporation stock		$ 141,000	141,000
Number of private investment funds under the Small Business Investment Company (SBIC) program | item		2
Private investment funds		$ 1,600,000	1,500,000
Unfunded commitments		$ 3,800,000	$ 4,000,000
Treasury stock repurchased (in shares) | shares		0	635,100	246,708
Treasury stock repurchased (in dollars per share) | $ / shares			$ 17.56	$ 17.60
Statutory rate (as a percent)		35.00%	35.00%	35.00%
Contractual maturities		10 years
Cash flow information:
Cash paid for taxes		$ 13,752,000	$ 11,390,000	$ 11,050,000
Dividends accrued for restricted stock		11,000
Real estate acquired through foreclosure		$ 881,000	2,671,000	823,000
Forecast
Statutory rate (as a percent)	21.00%
Customer relationships
Amortization period		15 years
Minimum
Amortization period		7 years
Minimum | Core deposits
Amortization period		7 years
Maximum
Amortization period		20 years
Maximum | Core deposits
Amortization period		10 years
Buildings
Useful life (in years)		32 years
Furniture and equipment | Minimum
Useful life (in years)		3 years
Furniture and equipment | Maximum
Useful life (in years)		10 years
Vehicles
Useful life (in years)		3 years
Notes payable
Cash flow information:
Cash paid for interest		$ 1,078,000	1,063,000	758,000
Junior subordinated debt
Cash flow information:
Cash paid for interest		315,000	258,000	220,000
Deposits and repurchase agreements
Cash flow information:
Cash paid for interest		$ 7,701,000	$ 7,051,000	$ 6,452,000

MERGER ACTIVITY (Details)

MERGER ACTIVITY (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 28, 2015	Dec. 31, 2015
Merger activity
Proceeds from note payable		$ 31,000
Expenditures related to the acquisition		1,374
MCBI
Merger activity
Cash funded	$ 56,900
Proceeds from note payable	31,000
Proceeds from special distribution	$ 25,000
Expenditures related to the acquisition		$ 1,400

SECURITIES - Amortized cost and

SECURITIES - Amortized cost and estimated fair values of investments in securities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Available-for-sale Securities [Abstract]
Amortized cost	$ 223,668	$ 207,361
Fair Value	223,175	205,944
Held-to-maturity Securities [Abstract]
Amortized cost	33	34
Fair Value	35	37
Securities available for sale:
Available-for-sale Securities [Abstract]
Amortized cost	223,668	207,361
Unrealized Gains	1,553	1,244
Unrealized Losses	(2,046)	(2,661)
Fair Value	223,175	205,944
Securities available for sale: | State and municipal securities
Available-for-sale Securities [Abstract]
Amortized cost	60,861	58,991
Unrealized Gains	1,173	638
Unrealized Losses	(118)	(650)
Fair Value	61,916	58,979
Securities available for sale: | Debt securities
Available-for-sale Securities [Abstract]
Amortized cost	17,315	20,795
Unrealized Losses	(370)	(454)
Fair Value	16,945	20,341
Securities available for sale: | Collateralized mortgage obligations
Available-for-sale Securities [Abstract]
Amortized cost	61,878	34,005
Unrealized Gains	50	90
Unrealized Losses	(675)	(325)
Fair Value	61,253	33,770
Securities available for sale: | Mortgage-backed securities
Available-for-sale Securities [Abstract]
Amortized cost	82,510	92,489
Unrealized Gains	330	516
Unrealized Losses	(866)	(1,215)
Fair Value	81,974	91,790
Securities available for sale: | Other securities
Available-for-sale Securities [Abstract]
Amortized cost	1,104	1,081
Unrealized Losses	(17)	(17)
Fair Value	1,087	1,064
Securities held to maturity: | Mortgage-backed securities
Held-to-maturity Securities [Abstract]
Amortized cost	33	34
Gross Unrealized Gains	2	3
Fair Value	$ 35	$ 37

SECURITIES - Amortized cost a55

SECURITIES - Amortized cost and estimated fair values of securities by contractual maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Available for Sale - Amortized Cost
Amortized cost, 1 year or less	$ 6,203	$ 5,579
Amortized cost, 1 year through 5 years	26,811	28,946
Amortized cost, 5 years through 10 years	9,215	20,834
Amortized cost, After 10 years	181,439	152,002
Available-for-sale Securities, Amortized Cost Basis, Total	223,668	207,361
Available for Sale - Estimated Fair Value
Estimated fair value, 1 year or less	6,194	5,570
Estimated fair value, 1 year through 5 years	26,635	28,937
Estimated fair value, 5 years through 10 years	9,348	20,880
Estimated fair value, After 10 years	180,998	150,557
Available-for-sale Securities, Total	223,175	205,944
Held to Maturity - Amortized Cost
Amortized cost, After 10 years	33	34
Held-to-maturity Securities, Total	33	34
Held to Maturity - Estimated Fair Value
Estimated fair value, After 10 years	35	37
Held-to-maturity Securities, Fair Value, Total	$ 35	$ 37

SECURITIES - Securities carryin

SECURITIES - Securities carrying amount (Details)	12 Months Ended
	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item	Dec. 31, 2015USD ($)
SECURITIES
Securities sold during the year	$ 6,100,000	$ 302,000	$ 0
Net gains	27,000	28,000
Carrying value of securities pledged	$ 58,700,000	$ 54,000,000
Securities held in a gross unrealized loss position | item	106	121
Impairment loss on securities	$ 0	$ 0	$ 0

SECURITIES - Securities with gr

SECURITIES - Securities with gross unrealized losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Investment securities
Fair value - Less than twelve months	$ 73,153	$ 134,561
Gross Unrealized loss - Less than twelve months	(561)	(2,658)
Fair value - Twelve months or more	62,560	313
Gross Unrealized loss - Twelve months or more	(1,485)	(3)
State and municipal securities
Investment securities
Fair value - Less than twelve months	2,494	22,856
Gross Unrealized loss - Less than twelve months	(3)	(647)
Fair value - Twelve months or more	6,516	313
Gross Unrealized loss - Twelve months or more	(115)	(3)
Debt securities
Investment securities
Fair value - Less than twelve months	4,464	18,341
Gross Unrealized loss - Less than twelve months	(55)	(454)
Fair value - Twelve months or more	12,481
Gross Unrealized loss - Twelve months or more	(315)
Collateralized mortgage obligations
Investment securities
Fair value - Less than twelve months	44,116	24,800
Gross Unrealized loss - Less than twelve months	(380)	(325)
Fair value - Twelve months or more	9,938
Gross Unrealized loss - Twelve months or more	(295)
Mortgage-backed securities
Investment securities
Fair value - Less than twelve months	22,079	67,500
Gross Unrealized loss - Less than twelve months	(123)	(1,215)
Fair value - Twelve months or more	32,538
Gross Unrealized loss - Twelve months or more	(743)
Other securities
Investment securities
Fair value - Less than twelve months		1,064
Gross Unrealized loss - Less than twelve months		$ (17)
Fair value - Twelve months or more	1,087
Gross Unrealized loss - Twelve months or more	$ (17)

LOANS - By portfolio segment (D

LOANS - By portfolio segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Loans
Total	$ 2,317,789	$ 2,160,046
Percentage of loan	100.00%	100.00%
Less deferred loan fees	$ (4,555)	$ (4,321)
Less unearned discount on retained portion of loans sold	(230)	(227)
Less allowance for loan loss	(24,778)	(25,006)	$ (25,315)	$ (24,952)
Total loans, net	2,288,226	2,130,492
Loans held for sale	1,460	613
Total impaired loans	2,286,766	2,129,879
Interest Receivable	6,100	5,500
Commercial and industrial
Loans
Total	$ 559,363	$ 511,554
Percentage of loan	24.10%	23.70%
Less allowance for loan loss	$ (7,257)	$ (6,409)	(4,746)	(7,160)
Commercial real estate
Loans
Total	$ 738,293	$ 697,794
Percentage of loan	31.90%	32.30%
Less allowance for loan loss	$ (10,375)	$ (10,770)	(7,058)	(6,985)
Construction and development
Loans
Total	$ 449,211	$ 491,626
Percentage of loan	19.40%	22.80%
Less allowance for loan loss	$ (3,482)	$ (4,598)	(4,504)	(2,991)
One to four family residential
Loans
Total	$ 258,584	$ 236,882
Percentage of loan	11.20%	11.00%
Less allowance for loan loss	$ (1,326)	$ (1,286)	(2,295)	(1,843)
Multi‑family residential
Loans
Total	$ 220,305	$ 133,210
Percentage of loan	9.50%	6.20%
Less allowance for loan loss	$ (1,419)	$ (916)	(762)	(500)
Consumer
Loans
Total	$ 40,433	$ 39,694
Percentage of loan	1.70%	1.80%
Less allowance for loan loss	$ (566)	$ (353)	(363)	(423)
Agriculture
Loans
Total	$ 11,256	$ 11,106
Percentage of loan	0.50%	0.50%
Less allowance for loan loss	$ (68)	$ (79)	(93)	(118)
Other
Loans
Total	$ 40,344	$ 38,180
Percentage of loan	1.70%	1.70%
Less allowance for loan loss	$ (285)	$ (595)	$ (5,494)	$ (4,932)

LOANS - Loan participation and

LOANS - Loan participation and Loan Guarantees (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loans
Participations purchased during the period	$ 18,491,000		$ 6,771,000
Participations Sold During the Period	46,067,000	$ 4,948,000	26,755,000
SBA loans subject to sale of guaranteed portion, net of payments	2,200,000	3,500,000	3,600,000
Gain loss on disposition of asset
Loans
Net gains recognized on sales of loans	149,000	326,000	382,000
Commercial and industrial
Loans
Participations purchased during the period			1,674,000
Participations Sold During the Period	23,000,000
Commercial real estate
Loans
Participations purchased during the period	12,885,000
Participations Sold During the Period	20,505,000	654,000
Construction and development
Loans
Participations purchased during the period	5,606,000		5,097,000
Participations Sold During the Period	$ 2,562,000	$ 4,294,000	21,755,000
Loans to nondepository financial institutions
Loans
Participations Sold During the Period			$ 5,000,000

LOAN PERFORMANCE - Nonaccrual l

LOAN PERFORMANCE - Nonaccrual loans, segregated by loan class (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Nonaccrual loans
Nonaccrual loans	$ 7,646,000	$ 6,239,000
Interest income that would have been earned under the original terms of the nonaccrual loans	402,000	779,000	$ 776,000
Commercial and industrial
Nonaccrual loans
Nonaccrual loans	3,280,000	2,318,000
Commercial real estate
Nonaccrual loans
Nonaccrual loans	3,216,000	2,118,000
Construction and development
Nonaccrual loans
Nonaccrual loans	252,000	458,000
One to four family residential
Nonaccrual loans
Nonaccrual loans	$ 898,000	1,302,000
Multi‑family residential
Nonaccrual loans
Nonaccrual loans		7,000
Agriculture
Nonaccrual loans
Nonaccrual loans		$ 36,000

LOAN PERFORMANCE - Aging analys

LOAN PERFORMANCE - Aging analysis of loan past due (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Aging analysis
Total past due	$ 8,971	$ 6,857
Total current loans	2,308,818	2,153,189
Total loans	2,317,789	2,160,046
30 to 59 days past due
Aging analysis
Total past due	2,490	1,129
60 to 89 days past due
Aging analysis
Total past due	1,937	833
90 days or greater past due
Aging analysis
Total past due	4,544	4,895
Commercial and industrial
Aging analysis
Total past due	4,549	2,719
Total current loans	554,814	508,835
Total loans	559,363	511,554
Commercial and industrial | 30 to 59 days past due
Aging analysis
Total past due	943	378
Commercial and industrial | 60 to 89 days past due
Aging analysis
Total past due	1,071	68
Commercial and industrial | 90 days or greater past due
Aging analysis
Total past due	2,535	2,273
Commercial real estate
Aging analysis
Total past due	3,044	2,292
Total current loans	735,249	695,502
Total loans	738,293	697,794
Commercial real estate | 30 to 59 days past due
Aging analysis
Total past due	337	352
Commercial real estate | 60 to 89 days past due
Aging analysis
Total past due	841	75
Commercial real estate | 90 days or greater past due
Aging analysis
Total past due	1,866	1,865
Construction and development
Aging analysis
Total past due	400	19
Total current loans	448,811	491,607
Total loans	449,211	491,626
Construction and development | 30 to 59 days past due
Aging analysis
Total past due	400	19
One to four family residential
Aging analysis
Total past due	950	1,822
Total current loans	257,634	235,060
Total loans	258,584	236,882
One to four family residential | 30 to 59 days past due
Aging analysis
Total past due	807	377
One to four family residential | 60 to 89 days past due
Aging analysis
Total past due		688
One to four family residential | 90 days or greater past due
Aging analysis
Total past due	143	757
Multi‑family residential
Aging analysis
Total current loans	220,305	133,210
Total loans	220,305	133,210
Consumer
Aging analysis
Total past due	28
Total current loans	40,405	39,694
Total loans	40,433	39,694
Consumer | 30 to 59 days past due
Aging analysis
Total past due	3
Consumer | 60 to 89 days past due
Aging analysis
Total past due	25
Agriculture
Aging analysis
Total current loans	11,256	11,106
Total loans	11,256	11,106
Other
Aging analysis
Total past due		5
Total current loans	40,344	38,175
Total loans	$ 40,344	38,180
Other | 30 to 59 days past due
Aging analysis
Total past due		3
Other | 60 to 89 days past due
Aging analysis
Total past due		$ 2

LOAN PERFORMANCE - Restructured

LOAN PERFORMANCE - Restructured loans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)loan	Dec. 31, 2016USD ($)loan	Jan. 01, 2018USD ($)
Restructured loans
Number of loans | loan	6	10
Pre-modification outstanding Recorded Investment	$ 2,148	$ 17,349
Commitment to loan additional funds	0	0
Recorded investment	$ 18,200	25,500
Restructured loans for which there was a payment default | loan	0
Subsequent Event
Restructured loans
Commitment to loan additional funds			$ 7,500
Restructured Payments
Restructured loans
Post-modification recorded investment	$ 146
Extended Maturity
Restructured loans
Post-modification recorded investment	667	16,669
Extended Maturity and Restructured Payments
Restructured loans
Post-modification recorded investment	$ 1,335	$ 680
Commercial and industrial
Restructured loans
Number of loans | loan	2	6
Pre-modification outstanding Recorded Investment	$ 1,178	$ 5,616
Commercial and industrial | Extended Maturity
Restructured loans
Post-modification recorded investment		4,936
Commercial and industrial | Extended Maturity and Restructured Payments
Restructured loans
Post-modification recorded investment	$ 1,178	$ 680
Commercial real estate
Restructured loans
Number of loans | loan	4	2
Pre-modification outstanding Recorded Investment	$ 970	$ 3,520
Commercial real estate | Restructured Payments
Restructured loans
Post-modification recorded investment	146
Commercial real estate | Extended Maturity
Restructured loans
Post-modification recorded investment	667	$ 3,520
Commercial real estate | Extended Maturity and Restructured Payments
Restructured loans
Post-modification recorded investment	$ 157
Other
Restructured loans
Number of loans | loan		2
Pre-modification outstanding Recorded Investment		$ 8,213
Other | Extended Maturity
Restructured loans
Post-modification recorded investment		$ 8,213

ALLOWANCE FOR LOAN LOSSES - Seg

ALLOWANCE FOR LOAN LOSSES - Segregated by loan class (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loan losses segregated by loan class
Beginning balance	$ 25,006,000	$ 25,315,000	$ 24,952,000
Provision (recapture) for loan loss	(338,000)	4,575,000	6,950,000
Charge-offs	(1,125,000)	(6,079,000)	(7,602,000)
Recoveries	1,235,000	1,195,000	1,015,000
Net (charge-offs) recoveries	110,000	(4,884,000)	(6,587,000)
Ending balance	24,778,000	25,006,000	25,315,000
Specific reserve
Loan losses segregated by loan class
Beginning balance	668,000	389,000
Ending balance	1,035,000	668,000	389,000
General reserve
Loan losses segregated by loan class
Beginning balance	24,338,000	24,926,000
Ending balance	23,743,000	24,338,000	24,926,000
Commercial and industrial
Loan losses segregated by loan class
Beginning balance	6,409,000	4,746,000	7,160,000
Provision (recapture) for loan loss	642,000	5,537,000	4,272,000
Charge-offs	(904,000)	(4,884,000)	(7,210,000)
Recoveries	1,110,000	1,010,000	524,000
Net (charge-offs) recoveries	206,000	(3,874,000)	(6,686,000)
Ending balance	7,257,000	6,409,000	4,746,000
Commercial and industrial | Specific reserve
Loan losses segregated by loan class
Beginning balance	462,000	357,000
Ending balance	852,000	462,000	357,000
Commercial and industrial | General reserve
Loan losses segregated by loan class
Beginning balance	5,947,000	4,389,000
Ending balance	6,405,000	5,947,000	4,389,000
Commercial real estate
Loan losses segregated by loan class
Beginning balance	10,770,000	7,058,000	6,985,000
Provision (recapture) for loan loss	(284,000)	4,193,000	(189,000)
Charge-offs	(120,000)	(589,000)	(27,000)
Recoveries	9,000	108,000	289,000
Net (charge-offs) recoveries	(111,000)	(481,000)	262,000
Ending balance	10,375,000	10,770,000	7,058,000
Commercial real estate | Specific reserve
Loan losses segregated by loan class
Beginning balance	206,000
Ending balance	64,000	206,000
Commercial real estate | General reserve
Loan losses segregated by loan class
Beginning balance	10,564,000	7,058,000
Ending balance	10,311,000	10,564,000	7,058,000
Construction and development
Loan losses segregated by loan class
Beginning balance	4,598,000	4,504,000	2,991,000
Provision (recapture) for loan loss	(1,116,000)	94,000	1,513,000
Ending balance	3,482,000	4,598,000	4,504,000
Construction and development | Specific reserve
Loan losses segregated by loan class
Beginning balance		26,000
Ending balance			26,000
Construction and development | General reserve
Loan losses segregated by loan class
Beginning balance	4,598,000	4,478,000
Ending balance	3,482,000	4,598,000	4,478,000
One to four family residential
Loan losses segregated by loan class
Beginning balance	1,286,000	2,295,000	1,843,000
Provision (recapture) for loan loss	35,000	(1,012,000)	573,000
Charge-offs	(8,000)	(3,000)	(263,000)
Recoveries	13,000	6,000	142,000
Net (charge-offs) recoveries	5,000	3,000	(121,000)
Ending balance	1,326,000	1,286,000	2,295,000
One to four family residential | Specific reserve
Loan losses segregated by loan class
Ending balance	119,000
One to four family residential | General reserve
Loan losses segregated by loan class
Beginning balance	1,286,000	2,295,000
Ending balance	1,207,000	1,286,000	2,295,000
Multi‑family residential
Loan losses segregated by loan class
Beginning balance	916,000	762,000	500,000
Provision (recapture) for loan loss	503,000	154,000	262,000
Ending balance	1,419,000	916,000	762,000
Multi‑family residential | General reserve
Loan losses segregated by loan class
Beginning balance	916,000	762,000
Ending balance	1,419,000	916,000	762,000
Consumer
Loan losses segregated by loan class
Beginning balance	353,000	363,000	423,000
Provision (recapture) for loan loss	263,000	222,000	(18,000)
Charge-offs	(93,000)	(277,000)	(102,000)
Recoveries	43,000	45,000	60,000
Net (charge-offs) recoveries	(50,000)	(232,000)	(42,000)
Ending balance	566,000	353,000	363,000
Consumer | Specific reserve
Loan losses segregated by loan class
Beginning balance		6,000
Ending balance			6,000
Consumer | General reserve
Loan losses segregated by loan class
Beginning balance	353,000	357,000
Ending balance	566,000	353,000	357,000
Agriculture
Loan losses segregated by loan class
Beginning balance	79,000	93,000	118,000
Provision (recapture) for loan loss	(63,000)	227,000	(25,000)
Charge-offs		(267,000)
Recoveries	52,000	26,000
Net (charge-offs) recoveries	52,000	(241,000)
Ending balance	68,000	79,000	93,000
Agriculture | General reserve
Loan losses segregated by loan class
Beginning balance	79,000	93,000
Ending balance	68,000	79,000	93,000
Other
Loan losses segregated by loan class
Beginning balance	595,000	5,494,000	4,932,000
Provision (recapture) for loan loss	(318,000)	(4,840,000)	562,000
Charge-offs		(59,000)
Recoveries	8,000
Net (charge-offs) recoveries	8,000	(59,000)
Ending balance	285,000	595,000	5,494,000
Other | General reserve
Loan losses segregated by loan class
Beginning balance	595,000	5,494,000
Ending balance	285,000	595,000	$ 5,494,000
Unfunded Loan Commitment
Loan losses segregated by loan class
Beginning balance	366,000
Ending balance	$ 378,000	$ 366,000

ALLOWANCE FOR LOAN LOSSES - Ris

ALLOWANCE FOR LOAN LOSSES - Risk Grading (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Risk Grading
Risk rating of loans	$ 2,317,789	$ 2,160,046
Pass
Risk Grading
Risk rating of loans	2,255,908	2,083,745
Special Mention
Risk Grading
Risk rating of loans	19,571	19,328
Substandard
Risk Grading
Risk rating of loans	42,310	56,973
Commercial and industrial
Risk Grading
Risk rating of loans	559,363	511,554
Commercial and industrial | Pass
Risk Grading
Risk rating of loans	535,589	483,399
Commercial and industrial | Special Mention
Risk Grading
Risk rating of loans	8,403	2,207
Commercial and industrial | Substandard
Risk Grading
Risk rating of loans	15,371	25,948
Commercial real estate
Risk Grading
Risk rating of loans	738,293	697,794
Commercial real estate | Pass
Risk Grading
Risk rating of loans	722,503	674,445
Commercial real estate | Special Mention
Risk Grading
Risk rating of loans	2,951	7,731
Commercial real estate | Substandard
Risk Grading
Risk rating of loans	12,839	15,618
Construction and development
Risk Grading
Risk rating of loans	449,211	491,626
Construction and development | Pass
Risk Grading
Risk rating of loans	448,124	485,823
Construction and development | Special Mention
Risk Grading
Risk rating of loans	565	933
Construction and development | Substandard
Risk Grading
Risk rating of loans	522	4,870
One to four family residential
Risk Grading
Risk rating of loans	258,584	236,882
One to four family residential | Pass
Risk Grading
Risk rating of loans	252,317	234,473
One to four family residential | Special Mention
Risk Grading
Risk rating of loans		797
One to four family residential | Substandard
Risk Grading
Risk rating of loans	6,267	1,612
Multi‑family residential
Risk Grading
Risk rating of loans	220,305	133,210
Multi‑family residential | Pass
Risk Grading
Risk rating of loans	212,899	125,553
Multi‑family residential | Special Mention
Risk Grading
Risk rating of loans	7,406	7,650
Multi‑family residential | Substandard
Risk Grading
Risk rating of loans		7
Consumer
Risk Grading
Risk rating of loans	40,433	39,694
Consumer | Pass
Risk Grading
Risk rating of loans	40,144	39,684
Consumer | Special Mention
Risk Grading
Risk rating of loans	246	10
Consumer | Substandard
Risk Grading
Risk rating of loans	43
Agriculture
Risk Grading
Risk rating of loans	11,256	11,106
Agriculture | Pass
Risk Grading
Risk rating of loans	11,223	11,033
Agriculture | Substandard
Risk Grading
Risk rating of loans	33	73
Other
Risk Grading
Risk rating of loans	40,344	38,180
Other | Pass
Risk Grading
Risk rating of loans	33,109	29,335
Other | Substandard
Risk Grading
Risk rating of loans	$ 7,235	$ 8,845

ALLOWANCE FOR LOAN LOSSES - Loa

ALLOWANCE FOR LOAN LOSSES - Loan Impairment Assessment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loan Impairment Assessment
Unpaid contractual principal balance	$ 34,018,000	$ 34,393,000
Recorded investment with no allowance	25,179,000	23,562,000
Recorded investment with allowance	3,733,000	6,093,000
Total recorded investment	28,912,000	29,655,000
Related allowance	1,035,000	668,000
Average recorded investment year-to-date	32,860,000	29,202,000
Interest income earned on impaired loans	1,100,000	648,000	$ 201,000
Commercial and industrial
Loan Impairment Assessment
Unpaid contractual principal balance	11,921,000	16,483,000
Recorded investment with no allowance	6,100,000	8,088,000
Recorded investment with allowance	1,192,000	4,227,000
Total recorded investment	7,292,000	12,315,000
Related allowance	852,000	462,000
Average recorded investment year-to-date	12,090,000	15,550,000
Commercial real estate
Loan Impairment Assessment
Unpaid contractual principal balance	9,646,000	6,454,000
Recorded investment with no allowance	8,626,000	4,398,000
Recorded investment with allowance	667,000	1,866,000
Total recorded investment	9,293,000	6,264,000
Related allowance	64,000	206,000
Average recorded investment year-to-date	9,438,000	5,903,000
Construction and development
Loan Impairment Assessment
Unpaid contractual principal balance	296,000	506,000
Recorded investment with no allowance	251,000	476,000
Total recorded investment	251,000	476,000
Average recorded investment year-to-date	323,000	754,000
One to four family residential
Loan Impairment Assessment
Unpaid contractual principal balance	5,003,000	1,781,000
Recorded investment with no allowance	3,050,000	1,712,000
Recorded investment with allowance	1,874,000
Total recorded investment	4,924,000	1,712,000
Related allowance	119,000
Average recorded investment year-to-date	3,369,000	1,403,000
Multi‑family residential
Loan Impairment Assessment
Unpaid contractual principal balance		13,000
Recorded investment with no allowance		7,000
Total recorded investment		7,000
Average recorded investment year-to-date	2,000	10,000
Consumer
Loan Impairment Assessment
Average recorded investment year-to-date	21,000	8,000
Agriculture
Loan Impairment Assessment
Unpaid contractual principal balance		307,000
Recorded investment with no allowance		36,000
Total recorded investment		36,000
Average recorded investment year-to-date	1,000	34,000
Other
Loan Impairment Assessment
Unpaid contractual principal balance	7,152,000	8,849,000
Recorded investment with no allowance	7,152,000	8,845,000
Total recorded investment	7,152,000	8,845,000
Average recorded investment year-to-date	$ 7,616,000	$ 5,540,000

ALLOWANCE FOR LOAN LOSSES - L66

ALLOWANCE FOR LOAN LOSSES - Loan losses on the basis of Company's impairment methodology (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	$ 28,912,000	$ 29,655,000
Loans collectively evaluated for impairment	2,288,877,000	2,130,391,000
Total	2,317,789,000	2,160,046,000
Allowance allocated to specific reserves for loans individually evaluated for impairment	1,000,000	668,000
Commercial and industrial
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	7,292,000	12,315,000
Loans collectively evaluated for impairment	552,071,000	499,239,000
Total	559,363,000	511,554,000
Commercial real estate
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	9,293,000	6,264,000
Loans collectively evaluated for impairment	729,000,000	691,530,000
Total	738,293,000	697,794,000
Construction and development
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	251,000	476,000
Loans collectively evaluated for impairment	448,960,000	491,150,000
Total	449,211,000	491,626,000
One to four family residential
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	4,924,000	1,712,000
Loans collectively evaluated for impairment	253,660,000	235,170,000
Total	258,584,000	236,882,000
Multi‑family residential
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment		7,000
Loans collectively evaluated for impairment	220,305,000	133,203,000
Total	220,305,000	133,210,000
Consumer
Allowance for loan losses on the basis of Company's impairment methodology
Loans collectively evaluated for impairment	40,433,000	39,694,000
Total	40,433,000	39,694,000
Agriculture
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment		36,000
Loans collectively evaluated for impairment	11,256,000	11,070,000
Total	11,256,000	11,106,000
Other
Allowance for loan losses on the basis of Company's impairment methodology
Loans individually evaluated for impairment	7,152,000	8,845,000
Loans collectively evaluated for impairment	33,192,000	29,335,000
Total	$ 40,344,000	$ 38,180,000

PREMISES AND EQUIPMENT (Details

PREMISES AND EQUIPMENT (Details) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
PREMISES AND EQUIPMENT
Premises and equipment		$ 80,219,000	$ 82,076,000
Less accumulated depreciation and amortization		(26,612,000)	(24,562,000)
Premises and equipment, net		53,607,000	57,514,000
Depreciation		3,353,000	3,259,000	$ 3,643,000
Net gains and losses on sale of assets		742,000	1,300,000	$ 20,000
Legal Matter Related To Branch Office
PREMISES AND EQUIPMENT
Net gains and losses on sale of assets	$ 554,000
Disposed by sale | Huffman Branch
PREMISES AND EQUIPMENT
Value of premises and equipment sold	1,400,000
Deposits held at bank	15,000,000
Gain on sale of business	28,000
Disposed by sale | Deweyville Branch
PREMISES AND EQUIPMENT
Deposits held at bank		4,700,000
Loans held at bank		50,000
Gain on sale of business	$ 97,000
Disposed by sale | Washington Branch
PREMISES AND EQUIPMENT
Net gains and losses on sale of assets			$ 1,500,000
Lease period			10 years
Land
PREMISES AND EQUIPMENT
Premises and equipment		13,466,000	$ 14,686,000
Land | Disposed by sale | Washington Branch
PREMISES AND EQUIPMENT
Value of premises and equipment sold			1,000,000
Buildings and leasehold improvements
PREMISES AND EQUIPMENT
Premises and equipment		51,664,000	52,230,000
Buildings | Disposed by sale | Washington Branch
PREMISES AND EQUIPMENT
Value of premises and equipment sold			963,000
Furniture and equipment
PREMISES AND EQUIPMENT
Premises and equipment		14,887,000	14,814,000
Vehicles
PREMISES AND EQUIPMENT
Premises and equipment		$ 202,000	202,000
Construction in progress
PREMISES AND EQUIPMENT
Premises and equipment			$ 144,000

GOODWILL AND OTHER INTANGIBLE68

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in goodwill	$ 0	$ 0
Other Intangible Assets, net
Gross Intangible Assets	20,700	20,642
Accumulated Amortization	(13,930)	(12,851)
Net Intangible Assets	6,770	7,791
Core deposits
Other Intangible Assets, net
Gross Intangible Assets	13,750	13,750
Accumulated Amortization	(12,051)	(11,448)
Net Intangible Assets	$ 1,699	2,302
Customer relationships
Other Intangible Assets, net
Amortization period	15 years
Gross Intangible Assets	$ 6,629	6,629
Accumulated Amortization	(1,767)	(1,326)
Net Intangible Assets	4,862	5,303
Servicing asset
Other Intangible Assets, net
Gross Intangible Assets	321	263
Accumulated Amortization	(112)	(77)
Net Intangible Assets	$ 209	$ 186
Weighted Average | Core deposits
Other Intangible Assets, net
Amortization period	6 years 2 months 12 days	7 years 1 month 6 days
Weighted Average | Customer relationships
Other Intangible Assets, net
Amortization period	11 years	12 years
Weighted Average | Servicing asset
Other Intangible Assets, net
Amortization period	17 years 3 months 18 days	16 years 9 months 18 days
Minimum
Other Intangible Assets, net
Amortization period	7 years
Minimum | Core deposits
Other Intangible Assets, net
Amortization period	7 years
Maximum
Other Intangible Assets, net
Amortization period	20 years
Maximum | Core deposits
Other Intangible Assets, net
Amortization period	10 years

GOODWILL AND OTHER INTANGIBLE69

GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated future amortization for intangible assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Servicing Assets
Balance at beginning of year	$ 186	$ 136
Increase from loan sales	58	80
Amortization charges	(35)	(30)
Balance at end of period	209	186
Estimated future amortization for intangible assets:
Net Intangible Assets	6,770	$ 7,791
Core deposits and Customer relationship
Estimated future amortization for intangible assets:
2,018	952
2,019	860
2,020	768
2,021	675
2,022	584
Thereafter	2,722
Net Intangible Assets	$ 6,561

BANK OWNED LIFE INSURANCE (Deta

BANK OWNED LIFE INSURANCE (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
BANK OWNED LIFE INSURANCE
Balance at beginning of year	$ 51,430	$ 50,441	$ 34,084
Purchases	15,000		15,000
Redemptions		(367)
Earnings, net	1,580	1,356	1,357
Balance at end of year	$ 68,010	$ 51,430	$ 50,441

DEPOSITS (Details)

DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DEPOSITS
Interest-bearing demand accounts	$ 363,015	$ 359,560
Money market accounts	702,299	731,942
Saving accounts	95,842	85,927
Certificates and other time deposits, $100,000 or greater	172,469	179,621
Certificates of deposits, less than $100,000	159,558	158,285
Total interest-bearing deposits	1,493,183	1,515,335
Noninterest-bearing deposits	1,109,789	1,025,425
Total Deposits	$ 2,602,972	$ 2,540,760

DEPOSITS - Schedule of maturiti

DEPOSITS - Schedule of maturities of time deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Maturities of time deposits:
Three months or less	$ 63,482
Over three months through six months	57,471
Over six months through 12 months	84,476
Over 12 months through three years	102,864
Over three years	23,734
Total	332,027
Deposits from public entities	45,300	$ 49,200
Brokered deposits	$ 88,300	$ 81,400

NOTE PAYABLE AND LINES OF CRE73

NOTE PAYABLE AND LINES OF CREDIT (Details) $ in Thousands	Dec. 13, 2017USD ($)	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item	Dec. 31, 2015USD ($)	Feb. 01, 2015USD ($)
NOTE PAYABLE AND LINES OF CREDIT
Capital to Risk Weighted Assets		15.40%	12.90%
Frost Bank | Line of Credit
NOTE PAYABLE AND LINES OF CREDIT
Revolving line of credit available	$ 30,000
Revolving line of credit draw period	12 months
Debt term	60 months
Line of credit payment terms	payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months
Outstanding borrowings		$ 0
Federal Home Loan Bank | Line of Credit
NOTE PAYABLE AND LINES OF CREDIT
Total borrowing capacity available		793,300	$ 767,800
Outstanding borrowings		0	0
Federal Home Loan Bank | Federal funds line of credit
NOTE PAYABLE AND LINES OF CREDIT
Revolving line of credit available		75,000	$ 75,000
Outstanding borrowings		$ 0
Number of federal funds line of credit | item		4	4
Minimum | Frost Bank | Line of Credit
NOTE PAYABLE AND LINES OF CREDIT
Tangible Capital	$ 240,000
Free cash flow coverage ratio	125.00%
Maximum | Frost Bank | Line of Credit
NOTE PAYABLE AND LINES OF CREDIT
Capital to Risk Weighted Assets	12.00%
Maximum | Frost Bank | Line of Credit | TEXAS
NOTE PAYABLE AND LINES OF CREDIT
Capital to Risk Weighted Assets	15.00%
Notes payable
NOTE PAYABLE AND LINES OF CREDIT
Loan amount					$ 31,000
Interest paid		$ 1,078	$ 1,063	$ 758

JUNIOR SUBORDINATED DEBT (Detai

JUNIOR SUBORDINATED DEBT (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2007	Dec. 31, 2006
Junior subordinated notes
Junior subordinated debt		$ 6,726	$ 6,726
Crosby Statutory Trust I
Junior subordinated notes
Proceeds of trust preferred securities				$ 5,000
Junior subordinated debt				$ 5,200
County Bancshares Trust I
Junior subordinated notes
Proceeds of trust preferred securities					$ 5,500
Junior subordinated debt					$ 5,700
Purchase of trust preferred securities	$ 4,100
Trust preferred securities		$ 1,600
Interest rate (as a percent)		3.36%	2.88%
LIBOR | Crosby Statutory Trust I
Junior subordinated notes
Variable interest rate spread (as a percent)		1.44%
Interest rate (as a percent)		3.03%	2.40%
LIBOR | County Bancshares Trust I
Junior subordinated notes
Variable interest rate spread (as a percent)		2.00%

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
RELATED PARTY TRANSACTIONS
Deemed nonaccrual, past due, restructured or classified as potential problem loans	$ 0	$ 0
Unfunded loan commitments to related parties	69,700	48,600
Related party deposits	224,400	254,700
Advertising expense to related party	$ 192,000	$ 94,000

RELATED PARTY TRANSACTIONS - Lo

RELATED PARTY TRANSACTIONS - Loans to related parties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Summary of loans to related parties
Balance at beginning of year	$ 142,516	$ 136,514
New loans	108,698	81,302
Repayments	(45,446)	(75,300)
Balance at end of year	$ 205,768	$ 142,516

COMMITMENTS AND CONTINGENCIES77

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
Commitments to extend credit, variable	$ 626,441	$ 493,740
Commitments to extend credit, fixed	61,608	113,719
Total	688,049	607,459
Standby letters of credit	$ 28,977	$ 26,682

COMMITMENTS AND CONTINGENCIES78

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Derivative Financial (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item
Derivative Instruments and Hedging Activities Disclosures [Table]
Deterioration in the customer’s credit worthiness	$ 0	$ 0
Number of interest rate swap agreements | item	14	11
Not Designated as Hedging Instruments
Derivative Instruments and Hedging Activities Disclosures [Table]
Notional Amount	$ 84,922	$ 56,072
Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Notional amount asset	25,882	13,637
Fair value asset	$ 340	$ 430
Weighted Average Maturity	7 years 9 months 29 days	6 years 7 months 6 days
Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Notional amount asset	$ 16,579	$ 14,399
Fair value asset	$ 426	$ 350
Weighted Average Maturity	8 years 1 month 13 days	9 years 5 months 12 days
Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Notional amount liability	$ 16,579	$ 14,399
Fair value liability	$ (426)	$ (350)
Weighted Average Maturity	7 years 9 months 29 days	6 years 7 months 6 days
Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Notional amount liability	$ 25,882	$ 13,637
Fair value liability	$ (340)	$ (430)
Weighted Average Maturity	8 years 1 month 13 days	9 years 5 months 12 days
Minimum | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	4.75%	5.10%
Minimum | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	4.00%	4.00%
Minimum | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	4.00%	4.00%
Minimum | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	4.75%	5.10%
Floating rate	2.50%	2.50%
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	2.50%	2.50%
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	2.50%	2.50%
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	2.50%	2.50%
Maximum | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	7.25%	7.25%
Maximum | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	5.15%	4.75%
Maximum | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	5.15%	4.75%
Maximum | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Fixed rate	7.25%	7.25%
Floating rate	3.20%	3.25%
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	3.20%	3.25%
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets | Interest rate swaps with financial institutions
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	3.25%	3.00%
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities | Interest rate swaps with customers
Derivative Instruments and Hedging Activities Disclosures [Table]
Floating rate	3.25%	3.00%

COMMITMENTS AND CONTINGENCIES79

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Repurchase Agreements (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Repurchase Agreements
Outstanding funds	$ 1.5	$ 2.3

COMMITMENTS AND CONTINGENCIES80

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Contingent Liabilities (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)
Contingent Liabilities
Number of private investment funds under the Small Business Investment Company (SBIC) program | item	2
Unfunded commitments	$ 3.8	$ 4
Cumulative capital contributions	$ 1.6	$ 1.5

COMMITMENTS AND CONTINGENCIES81

COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Future minimum rent commitments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Lease Commitments
2,018	$ 1,573
2,019	1,409
2,020	1,394
2,021	1,462
2,022	1,513
Thereafter	10,833
Total	18,184
Lease Commitments
Rent expense	$ 1,800	$ 2,900	$ 2,200

INCOME TAXES - Provision for in

INCOME TAXES - Provision for income tax expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
INCOME TAXES
Current federal income tax									$ 13,364	$ 11,269	$ 12,353
Current state income tax									157	140	102
Deferred income tax									2,932	601	(1,664)
Total income tax expense	$ 6,313	$ 3,927	$ 3,181	$ 3,032	$ 3,322	$ 3,032	$ 2,845	$ 2,811	$ 16,453	$ 12,010	$ 10,791

INCOME TAXES - Effective tax ra

INCOME TAXES - Effective tax rate (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Increase (decrease) resulting from:
Tax expense calculated at statutory rate										$ 15,408	$ 13,726	$ 12,225
State income tax										102	140	102
Tax exempt interest income										(1,504)	(1,585)	(1,349)
Life Insurance										(553)	(485)	(464)
Impact of tax law rate change										3,857
Other										(857)	214	277
Total income tax expense	$ 6,313	$ 3,927	$ 3,181	$ 3,032	$ 3,322	$ 3,032	$ 2,845	$ 2,811		$ 16,453	$ 12,010	$ 10,791
Effective tax rate (as a percent)										37.40%	30.70%	30.90%
Statutory rate (as a percent)										35.00%	35.00%	35.00%
Tax adjustment to income tax expense from enacted tax law change										$ 3,900
Forecast
Increase (decrease) resulting from:
Statutory rate (as a percent)									21.00%

INCOME TAXES - Deferred income

INCOME TAXES - Deferred income taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Allowance for possible credit losses	$ 5,203	$ 8,752
Compensation related	2,228	1,334
Deferred loan origination fees and loan costs	988	1,512
Loan related	423	1,037
Unrealized loss on securities available for sale	103	496
Other	215	788
Total deferred tax assets	9,160	13,919
Deferred tax liabilities:
Accumulated depreciation	(1,228)	(2,205)
Compensation 481(a) adjustment	(713)
Core deposit intangibles	(1,378)	(2,662)
Other	(61)	(21)
Total deferred tax liabilities	(3,380)	(4,888)
Net Deferred Tax Asset	$ 5,780	$ 9,031

INCOME TAXES - Operating loss c

INCOME TAXES - Operating loss carryforwards (Details) $ in Millions	Feb. 28, 2015USD ($)
MCBI
Operating loss carryforwards
Federal net operating loss carryforwards	$ 1.5

EMPLOYEE BENEFIT PLANS AND DE86

EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS (Details)	Oct. 28, 2017USD ($)	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Term of service for 401K participation		3 months
Company's contributions to the 401K plan		$ 1,700,000	$ 1,700,000
Executive Deferred Compensation Arrangements
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Employers contribution of incentive bonus (as a percent)		25.00%
Deferred plan liability		$ 2,400,000	2,000,000
2008 Salary Continuation Agreement
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Deferred plan liability		503,000	$ 583,000
Annual compensation payment amount		$ 100,000
Contractual term		10 years
Commencement age		65 years
2017 Salary Continuation Agreement
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Deferred plan liability		$ 32,000
Annual compensation payment amount	$ 200,000
Contractual term	10 years
Commencement age	70 years
Change of Control and Non-Competition Agreements | VB Texas, Inc.
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Number of times of salary and average bonus | item		2
Number of years preceding the change of control or involuntary termination		3 years
Aggregate amount		$ 2,500,000
Change of Control and Non-Competition Agreements | Executive Officers
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS
Deferred plan liability		2,200,000
Deferred compensation expense		$ 0

STOCK-BASED COMPENSATION - Narr

STOCK-BASED COMPENSATION - Narrative (Details)	12 Months Ended
	Dec. 31, 2017shares
2006 Plan
STOCK OPTION PLANS
Vesting period	10 years
Number of options outstanding	0
2011 Plan
STOCK OPTION PLANS
Number of options outstanding	0
2014 Plan
STOCK OPTION PLANS
Number of options authorized	1,127,200
Option expiration term	10 years
Options available for future grant	959,200
2014 Plan | Minimum
STOCK OPTION PLANS
Vesting period	1 year
2014 Plan | Maximum
STOCK OPTION PLANS
Vesting period	5 years
2014 Plan | Granted after May 20, 2024
STOCK OPTION PLANS
Number of options granted	0
2017 Plan
STOCK OPTION PLANS
Number of options authorized	600,000
Options available for future grant	387,420

STOCK-BASED COMPENSATION - Stoc

STOCK-BASED COMPENSATION - Stock option activity (Details) - Stock option plans - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of shares underlying options
Options outstanding, beginning of period	248,314	647,074
Granted	80,000
Forfeited	(56,832)	(5,062)
Exercised	(11,160)	(393,698)
Options outstanding, end of period	260,322	248,314
Exercisable, end of period	127,122
Unvested, end of period	133,200
Weighted average exercise prices
Outstanding, beginning of period	$ 12.80	$ 10.99
Granted	21
Forfeited	10.14	9.85
Exercised	10.47	9.87
Outstanding, end of period	16	$ 12.80
Exercisable, end of period	$ 12.49
Weighted average contractual term (in years)
Weighted-average contractual term outstanding (years)	6 years 7 months 6 days

STOCK-BASED COMPENSATION - Fair

STOCK-BASED COMPENSATION - Fair value assumptions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value assumptions
Cash received in exercise of share options	$ 117	$ 3,883	$ 160
Stock option plans
Fair value assumptions
Dividend yield ( as a percent)	0.95%		1.19%
Expected volatility (as a percent)	35.97%		8.96%
Risk free interest rate ( as a percent)	2.42%		2.05%
Expected life in years	6 years		6 years
Option expiration term	10 years

STOCK-BASED COMPENSATION - Addi

STOCK-BASED COMPENSATION - Additional Information - Stock Options (Details) - Stock option plans - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
STOCK OPTION PLANS
Number of shares underlying options exercisable	127,122
Number of shares underlying options unvested	133,200
Number of shares underlying options outstanding	260,322
Weighted-average exercise price per share exercisable	$ 12.49
Weighted-average exercise price per share unvested	19.36
Weighted-average exercise price per share outstanding	$ 16	$ 12.80	$ 10.99
Aggregate intrinsic value exercisable	$ 2,183,000
Aggregate intrinsic value unvested	1,372,000
Aggregate intrinsic value outstanding	$ 3,555,000
Weighted-average contractual term exercisable (years)	4 years 6 months
Weighted-average contractual term unvested (years)	8 years 7 months 6 days
Weighted-average contractual term outstanding (years)	6 years 7 months 6 days
Intrinsic value of options exercised	$ 118,000	$ 2,800,000	$ 160,000

STOCK-BASED COMPENSATION - Ad91

STOCK-BASED COMPENSATION - Additional Information - Restricted stock (Details) - USD ($)	1 Months Ended	12 Months Ended
	Nov. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
STOCK OPTION PLANS AND RESTRICTED STOCK
Compensation expense		$ 329,000	$ 43,000	$ 12,000
Unrecognized compensation expense		$ 6,200,000
Weighted average period		3 years 1 month 6 days
Restricted Stock
STOCK OPTION PLANS AND RESTRICTED STOCK
Number of shares underlying restricted stock unvested		212,580
Number of shares underlying restricted stock outstanding		212,580
Weighted-average grant date fair value per share unvested		$ 27.27
Weighted-average grant date fair value per share unvested outstanding		$ 27.27
Aggregate grant date fair value unvested		$ 5,797,000
Aggregate grant date fair value outstanding		$ 5,797,000
Weighted-average contractual term unvested (years)		4 years 4 months 24 days
Weighted-average contractual term outstanding (years)		4 years 4 months 24 days
Directors, executive officers and key employees | 2017 Plan | Restricted Stock
STOCK OPTION PLANS AND RESTRICTED STOCK
Number of shares of restricted stock granted	212,580
Accrued dividends payable		$ 11,000
Directors | 2017 Plan | Restricted Stock
STOCK OPTION PLANS AND RESTRICTED STOCK
Vesting period	2 years
Executive officers and employees | 2017 Plan | Restricted Stock
STOCK OPTION PLANS AND RESTRICTED STOCK
Vesting period	5 years

REGULATORY MATTERS (Details)

REGULATORY MATTERS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Regulatory matters
Capital conversion buffer (as a percent)	2.50%
Term of implementation of the capital conservation buffer	4 years
Common Equity Tier I to Risk-Weighted Assets
Actual amount	$ 361,322	$ 274,516
Common Equity Tier One Capital Ratio	14.20%	11.50%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 114,628	$ 107,272
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	4.50%	4.50%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 178,310	$ 166,867
Minimum Capital Required-Basel III Fully Phase-in (ratio)	7.00%	7.00%
Required to be Considered Well Capitalized, amount	$ 165,573	$ 154,948
Required to be Considered Well Capitalized, ratio	6.50%	6.50%
Tier I Capital to Risk-Weighted Assets
Actual amount	$ 367,722	$ 280,916
Actual ratio	14.40%	11.80%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 152,837	$ 143,029
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	6.00%	6.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 216,519	$ 202,624
Minimum Capital Required-Basel III Fully Phase-in (ratio)	8.50%	8.50%
Required to be Considered Well Capitalized, amount	$ 203,782	$ 190,705
Required to be Considered Well Capitalized, ratio	8.00%	8.00%
Total Capital to Risk-Weighted Assets
Actual amount	$ 392,878	$ 306,287
Actual ratio	15.40%	12.90%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 203,782	$ 190,705
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	8.00%	8.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 267,464	$ 250,300
Minimum Capital Required-Basel III Fully Phase-in (ratio)	10.50%	10.50%
Required to be Considered Well Capitalized, amount	$ 254,728	$ 238,381
Required to be Considered Well Capitalized, ratio	10.00%	10.00%
Leverage Ratio
Actual amount	$ 367,722	$ 280,916
Actual ratio	12.30%	9.80%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 119,769	$ 114,872
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	4.00%	4.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 119,769	$ 114,872
Minimum Capital Required-Basel III Fully Phase-in (ratio)	4.00%	4.00%
Required to be Considered Well Capitalized, amount	$ 149,712	$ 143,590
Required to be Considered Well Capitalized, ratio	5.00%	5.00%
Dividend restrictions term	2 years
Bank Only
Common Equity Tier I to Risk-Weighted Assets
Actual amount	$ 322,414	$ 304,058
Common Equity Tier One Capital Ratio	12.70%	12.80%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 114,252	$ 107,209
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	4.50%	4.50%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 178,150	$ 166,770
Minimum Capital Required-Basel III Fully Phase-in (ratio)	7.00%	7.00%
Required to be Considered Well Capitalized, amount	$ 165,425	$ 154,844
Required to be Considered Well Capitalized, ratio	6.50%	6.50%
Tier I Capital to Risk-Weighted Assets
Actual amount	$ 322,414	$ 304,058
Actual ratio	12.70%	12.80%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 152,700	$ 142,946
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	6.00%	6.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 216,325	$ 202,507
Minimum Capital Required-Basel III Fully Phase-in (ratio)	8.50%	8.50%
Required to be Considered Well Capitalized, amount	$ 203,600	$ 190,594
Required to be Considered Well Capitalized, ratio	8.00%	8.00%
Total Capital to Risk-Weighted Assets
Actual amount	$ 347,569	$ 329,428
Actual ratio	13.70%	13.80%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 203,600	$ 190,594
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	8.00%	8.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 267,726	$ 250,155
Minimum Capital Required-Basel III Fully Phase-in (ratio)	10.50%	10.50%
Required to be Considered Well Capitalized, amount	$ 254,501	$ 238,243
Required to be Considered Well Capitalized, ratio	10.00%	10.00%
Leverage Ratio
Actual amount	$ 322,414	$ 304,058
Actual ratio	10.80%	10.60%
Minimum Capital Required-Basel III Phase-in Schedule (amount)	$ 119,403	$ 114,872
Minimum Capital Required-Basel III Phase-in Schedule (ratio)	4.00%	4.00%
Minimum Capital Required-Basel III Fully Phase-in (amount)	$ 119,403	$ 114,872
Minimum Capital Required-Basel III Fully Phase-in (ratio)	4.00%	4.00%
Required to be Considered Well Capitalized, amount	$ 149,253	$ 143,590
Required to be Considered Well Capitalized, ratio	5.00%	5.00%
Minimum
Regulatory matters
Capital conversion buffer (as a percent)	0.625%

FAIR VALUE DISCLOSURES (Details

FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Assets and Liabilities Measured on Recurring Basis
Transfers from level 1 and level 2	$ 0	$ 0
Transfers from level 2 and level 1	0	0
Transfers from level 1 and level 2	0	0
Transfers from level 2 and level 1	0	0
Transfers into level 3	0	0
Transfers from level 3	0	0
Financial Assets
Securities available for sale	223,175	205,944
Other securities	223,208	205,978
Recurring basis
Financial Assets
Total financial assets	223,941	206,724
Financial Liabilities
Total financial liabilities	766	780
Recurring basis | Interest rate swaps with customers
Financial Assets
Interest rate swaps assets	340	430
Financial Liabilities
Interest rate swaps liabilities	426	350
Recurring basis | Interest rate swaps with financial institutions
Financial Assets
Interest rate swaps assets	426	350
Financial Liabilities
Interest rate swaps liabilities	340	430
Recurring basis | State and municipal securities
Financial Assets
Securities available for sale	61,916	58,979
Recurring basis | Debt securities
Financial Assets
Securities available for sale	16,945	20,341
Recurring basis | Collateralized mortgage obligations
Financial Assets
Securities available for sale	61,253	33,770
Recurring basis | Mortgage-backed securities
Financial Assets
Securities available for sale	81,974	91,790
Recurring basis | Other securities
Financial Assets
Other securities	1,087	1,064
Level 1 Inputs
Financial Assets
Other securities	1,087	1,064
Total financial assets	327,286	383,167
Financial Liabilities
Total financial liabilities	1,109,789	1,025,425
Level 1 Inputs | Recurring basis
Financial Assets
Total financial assets	1,087	1,064
Level 1 Inputs | Recurring basis | Other securities
Financial Assets
Other securities	1,087	1,064
Level 2 Inputs
Financial Assets
Securities available for sale	222,088	204,880
Total financial assets	299,137	264,587
Financial Liabilities
Total financial liabilities	1,446,404	1,489,621
Level 2 Inputs | Interest rate swaps with customers
Financial Assets
Interest rate swaps assets	340	430
Financial Liabilities
Interest rate swaps liabilities	426	350
Level 2 Inputs | Interest rate swaps with financial institutions
Financial Assets
Interest rate swaps assets	426	350
Financial Liabilities
Interest rate swaps liabilities	340	430
Level 2 Inputs | Recurring basis
Financial Assets
Total financial assets	222,854	205,660
Financial Liabilities
Total financial liabilities	766	780
Level 2 Inputs | Recurring basis | Interest rate swaps with customers
Financial Assets
Interest rate swaps assets	340	430
Financial Liabilities
Interest rate swaps liabilities	426	350
Level 2 Inputs | Recurring basis | Interest rate swaps with financial institutions
Financial Assets
Interest rate swaps assets	426	350
Financial Liabilities
Interest rate swaps liabilities	340	430
Level 2 Inputs | Recurring basis | State and municipal securities
Financial Assets
Securities available for sale	61,916	58,979
Level 2 Inputs | Recurring basis | Debt securities
Financial Assets
Securities available for sale	16,945	20,341
Level 2 Inputs | Recurring basis | Collateralized mortgage obligations
Financial Assets
Securities available for sale	61,253	33,770
Level 2 Inputs | Recurring basis | Mortgage-backed securities
Financial Assets
Securities available for sale	81,974	91,790
Level 3 Inputs
Financial Assets
Total financial assets	$ 2,311,968	$ 2,151,708

FAIR VALUE DISCLOSURES - Certai

FAIR VALUE DISCLOSURES - Certain assets measured on a non recurring basis (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Impaired loans
Total impaired loans	$ 2,286,766	$ 2,129,879
Non-recurring basis
Impaired loans
Total impaired loans	2,698	5,425
Non-recurring basis | Commercial and industrial
Impaired loans
Total impaired loans	340	3,765
Non-recurring basis | Commercial real estate
Impaired loans
Total impaired loans	603	1,660
Non-recurring basis | One to four family residential
Impaired loans
Total impaired loans	1,755
Level 3 Inputs | Non-recurring basis
Impaired loans
Total impaired loans	2,698	5,425
Level 3 Inputs | Non-recurring basis | Commercial and industrial
Impaired loans
Total impaired loans	340	3,765
Level 3 Inputs | Non-recurring basis | Commercial real estate
Impaired loans
Total impaired loans	603	$ 1,660
Level 3 Inputs | Non-recurring basis | One to four family residential
Impaired loans
Total impaired loans	$ 1,755

FAIR VALUE DISCLOSURES - Non Fi

FAIR VALUE DISCLOSURES - Non Financial Assets and Non Financial Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Non-Financial Assets and Non-Financial Liabilities
Carrying value of foreclosed assets prior to measurement	$ 227	$ 630
Charge-offs / Write-downs	(51)	(65)
Fair value of foreclosed assets	176	565
Previously reported
Non-Financial Assets and Non-Financial Liabilities
Carrying value of foreclosed assets prior to measurement	881	2,018
Charge-offs / Write-downs		(47)
Fair value of foreclosed assets	$ 881	$ 1,971

FAIR VALUE DISCLOSURES - Fair m

FAIR VALUE DISCLOSURES - Fair market values of all financial instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Financial assets:
Interest bearing deposits in banks	$ 266,944	$ 329,103
Time deposits in other banks	600	600
Securities available for sale	223,175	205,944
Other securities	223,208	205,978
Securities held to maturity	33	34
Other investments	12,226	12,063
Loans, including held for sale, net	1,460	613
Accrued interest receivable	6,100	5,500
Financial liabilities:
Noninterest-bearing deposits	1,109,789	1,025,425
Interest-bearing deposits	1,493,183	1,515,335
Repurchase agreements	1,525	2,343
Junior subordinated debt	$ 6,726	$ 6,726
Minimum
Loans
Discount rates for loans	2.30%	2.30%
Maximum
Loans
Discount rates for loans	16.50%	16.50%
Total Fair Value
Financial assets:
Cash and due from banks	$ 59,255	$ 53,000
Interest bearing deposits in banks	266,944	329,103
Time deposits in other banks	600	600
Securities available for sale	222,088	204,880
Other securities	1,087	1,064
Securities held to maturity	35	37
Other investments	12,226	12,063
Loans, including held for sale, net	2,299,742	2,139,645
Bank-owned life insurance	68,010	51,430
Servicing asset	209	186
Accrued interest receivable	7,429	6,674
Total financial assets	2,938,391	2,799,462
Financial liabilities:
Noninterest-bearing deposits	1,109,789	1,025,425
Interest-bearing deposits	1,437,013	1,451,512
Repurchase agreements	1,525	2,342
Junior subordinated debt	6,726	6,726
Note payable		27,679
Accrued interest payable	374	582
Total financial liabilities	2,556,193	2,515,046
Carrying Amount
Financial assets:
Cash and due from banks	59,255	53,000
Interest bearing deposits in banks	266,944	329,103
Time deposits in other banks	600	600
Securities available for sale	222,088	204,880
Other securities	1,087	1,064
Securities held to maturity	33	34
Other investments	12,226	12,063
Loans, including held for sale, net	2,288,226	2,130,492
Bank-owned life insurance	68,010	51,430
Servicing asset	209	186
Accrued interest receivable	7,429	6,674
Total financial assets	2,926,873	2,790,306
Financial liabilities:
Noninterest-bearing deposits	1,109,789	1,025,425
Interest-bearing deposits	1,493,183	1,515,335
Repurchase agreements	1,525	2,343
Junior subordinated debt	6,726	6,726
Note payable		27,679
Accrued interest payable	374	582
Total financial liabilities	2,612,363	2,578,870
Interest rate swaps with customers | Total Fair Value
Financial assets:
Interest rate swaps assets	340	430
Financial liabilities:
Interest rate swaps liabilities	426	350
Interest rate swaps with customers | Carrying Amount
Financial assets:
Interest rate swaps assets	340	430
Financial liabilities:
Interest rate swaps liabilities	426	350
Interest rate swaps with financial institutions | Total Fair Value
Financial assets:
Interest rate swaps assets	426	350
Financial liabilities:
Interest rate swaps liabilities	340	430
Interest rate swaps with financial institutions | Carrying Amount
Financial assets:
Interest rate swaps assets	426	350
Financial liabilities:
Interest rate swaps liabilities	340	430
Level 1 Inputs
Financial assets:
Cash and due from banks	59,255	53,000
Interest bearing deposits in banks	266,944	329,103
Other securities	1,087	1,064
Total financial assets	327,286	383,167
Financial liabilities:
Noninterest-bearing deposits	1,109,789	1,025,425
Total financial liabilities	1,109,789	1,025,425
Level 2 Inputs
Financial assets:
Time deposits in other banks	600	600
Securities available for sale	222,088	204,880
Securities held to maturity	35	37
Bank-owned life insurance	68,010	51,430
Servicing asset	209	186
Accrued interest receivable	7,429	6,674
Total financial assets	299,137	264,587
Financial liabilities:
Interest-bearing deposits	1,437,013	1,451,512
Repurchase agreements	1,525	2,342
Junior subordinated debt	6,726	6,726
Note payable		27,679
Accrued interest payable	374	582
Total financial liabilities	1,446,404	1,489,621
Level 2 Inputs | Interest rate swaps with customers
Financial assets:
Interest rate swaps assets	340	430
Financial liabilities:
Interest rate swaps liabilities	426	350
Level 2 Inputs | Interest rate swaps with financial institutions
Financial assets:
Interest rate swaps assets	426	350
Financial liabilities:
Interest rate swaps liabilities	340	430
Level 3 Inputs
Financial assets:
Other investments	12,226	12,063
Loans, including held for sale, net	2,299,742	2,139,645
Total financial assets	$ 2,311,968	$ 2,151,708

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income for common shareholders									$ 27,571	$ 27,208	$ 24,136
Weighted-average shares
Basic weighted-average shares outstanding									22,457	22,049	22,462
Dilutive effect of outstanding stock options and unvested restricted stock awards									116	186	213
Diluted weighted-average shares outstanding									22,573	22,235	22,675
Earnings per share:
Basic	$ 0.08	$ 0.46	$ 0.39	$ 0.31	$ 0.34	$ 0.31	$ 0.29	$ 0.29	$ 1.23	$ 1.23	$ 1.07
Diluted	$ 0.08	$ 0.45	$ 0.39	$ 0.31	$ 0.34	$ 0.31	$ 0.29	$ 0.29	$ 1.22	$ 1.22	$ 1.06

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands	Nov. 10, 2017USD ($)$ / sharesshares	Sep. 20, 2017shares	Dec. 31, 2017USD ($)$ / sharesshares	Sep. 19, 2017$ / sharesshares	Sep. 18, 2017$ / sharesshares	Dec. 31, 2016$ / sharesshares
Shareholders' Equity
Preferred stock par value | $ / shares			$ 0.01	$ 0.01		$ 0.01
Common stock par value | $ / shares			$ 0.01	$ 0.01		$ 0.01
Preferred stock shares authorized			10,000,000	10,000,000		10,000,000
Common stock shares authorized			90,000,000	90,000,000		90,000,000
Stock split ratio		2
Additional shares received		1
Sale of common stock, offering costs | $			$ 7,241
Proceeds from stock offering | $	$ 64,500		$ 64,519
Previously reported
Shareholders' Equity
Preferred stock par value | $ / shares					$ 10
Common stock par value | $ / shares					$ 10
Preferred stock shares authorized					1,000,000
Common stock shares authorized					15,000,000
Initial public offering
Shareholders' Equity
Stock issued (in shares)	2,760,000
Share price (in dollars per share) | $ / shares	$ 26

PARENT COMPANY - Condensed Bala

PARENT COMPANY - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 59,255	$ 53,000
Deferred tax asset, net	5,780	9,031
Other assets	14,802	11,709
Total assets	3,081,083	2,951,522
Liabilities
Junior subordinated debt	6,726	6,726
Note payable		27,679
Other liabilities	23,646	16,377
Total liabilities	2,634,869	2,593,885
Shareholders’ equity
Preferred stock
Common stock	257	230
Additional paid-in capital	343,249	278,501
Retained earnings	118,353	95,274
Treasury stock	(15,256)	(15,446)
Accumulated other comprehensive loss	(389)	(922)
Total shareholders’ equity	446,214	357,637	$ 344,313	$ 329,253
Total liabilities and shareholders’ equity	3,081,083	2,951,522
Parent Company
Assets
Cash and due from banks	45,636	5,057
Investment in subsidiary	407,305	387,179
Deferred tax asset, net	141	464
Other assets	2,460	1,244
Total assets	455,542	393,944
Liabilities
Junior subordinated debt	6,726	6,726
Note payable		27,679
Other liabilities	2,602	1,902
Total liabilities	9,328	36,307
Shareholders’ equity
Common stock	257	230
Additional paid-in capital	343,249	278,501
Retained earnings	118,353	95,274
Treasury stock	(15,256)	(15,446)
Accumulated other comprehensive loss	(389)	(922)
Total shareholders’ equity	446,214	357,637
Total liabilities and shareholders’ equity	$ 455,542	$ 393,944

PARENT COMPANY - Condensed Inco

PARENT COMPANY - Condensed Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest expense
Note payable									$ 906	$ 1,061	$ 932
Junior subordinated debt									322	266	217
Total interest expense	$ 2,201	$ 2,318	$ 2,201	$ 2,165	$ 2,244	$ 2,178	$ 2,055	$ 1,928	8,885	8,405	7,654
Net interest income (expense)	28,165	27,251	26,525	25,833	25,767	25,517	25,387	24,875	107,774	101,546	97,871
Noninterest income
Other									1,847	2,581	1,559
Total noninterest income	3,144	4,086	3,526	3,448	4,400	3,551	3,572	4,226	14,204	15,749	14,967
Noninterest expense
Salaries and employee benefits									48,573	44,239	41,601
Net occupancy expense									9,151	10,100	9,844
Data processing									2,629	2,484	2,416
Printing, stationery and office									1,480	1,537	1,573
Professional and director fees									3,105	2,481	2,462
Merger expense											1,374
Other expenses									4,611	4,096	3,078
Total noninterest Expense	21,989	19,017	18,859	18,427	18,638	18,030	18,768	18,066	78,292	73,502	70,961
Net income before income tax expense	8,270	13,974	11,886	9,894	10,879	9,813	9,216	9,310	44,024	39,218	34,927
Income tax benefit	6,313	3,927	3,181	3,032	3,322	3,032	2,845	2,811	16,453	12,010	10,791
Net income	$ 1,957	$ 10,047	$ 8,705	$ 6,862	$ 7,557	$ 6,781	$ 6,371	$ 6,499	27,571	27,208	24,136
Parent Company
Interest income
Other									142	120	10
Interest expense
Note payable									906	1,061	932
Junior subordinated debt									322	266	217
Total interest expense									1,228	1,327	1,149
Net interest income (expense)									(1,086)	(1,207)	(1,139)
Noninterest income
Dividend income from subsidiary									8,806	12,250	30,400
Other											1,025
Total noninterest income									8,806	12,250	31,425
Noninterest expense
Salaries and employee benefits									344	225	197
Net occupancy expense										14
Data processing									37	28	26
Printing, stationery and office									20	10	5
Professional and director fees									842	341	276
Merger expense											546
Other expenses									17	31	38
Total noninterest Expense									1,260	649	1,088
Net income before income tax expense									6,460	10,394	29,198
Income tax benefit									(1,518)	(639)	(326)
Income before equity in undistributed income of subsidiary									7,978	11,033	29,524
Equity in undistributed income (loss) of subsidiary									19,593	16,175	(5,388)
Net income									$ 27,571	$ 27,208	$ 24,136

PARENT COMPANY - Condensed Stat

PARENT COMPANY - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 27,571	$ 27,208	$ 24,136
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Gain on redemption of junior subordinated debt			(1,025)
Stock-based compensation expense	329	43	12
Deferred income tax	2,932	601	(1,664)
Change in operating assets and liabilities:
Other assets	(3,156)	(1,188)	2,459
Other liabilities	5,759	967	(1,269)
Total adjustments	8,019	8,834	8,698
Net cash provided by operating activities	35,590	36,042	32,834
Cash flows from investing activities:
Acquisition of MCBI, net of cash acquired			(5,936)
Net cash used in investing activities	(185,433)	(131,574)	(88,664)
Cash flows from financing activities:
Proceeds from sale of common stock in initial public offering	71,760
Purchase of treasury stock		(11,079)	(4,418)
Proceeds from issuance of treasury stock for exercise of stock options	117	3,883	160
Purchase of trust preferred securities			(3,075)
Proceeds from note payable			31,000
Repayment of note payable	(27,679)	(3,321)
Dividends paid on common stock	(4,412)	(4,395)	(4,487)
Net cash provided (used) in financing activities	93,939	42,734	(17)
Net decrease in cash and cash equivalents	(55,904)	(52,798)	(55,847)
Cash and cash equivalents, beginning	382,103	434,901	490,748
Cash and cash equivalents, ending	326,199	382,103	434,901
Parent Company
Cash flows from operating activities:
Net income	27,571	27,208	24,136
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Gain on redemption of junior subordinated debt			(1,025)
Stock-based compensation expense	329	43	12
Equity in undistributed net (income) loss of subsidiary	(19,593)	(16,175)	5,388
Deferred income tax	391	295	(502)
Change in operating assets and liabilities:
Other assets	(1,216)	1,808	2,378
Other liabilities	552	(97)	28
Total adjustments	(19,537)	(14,126)	6,279
Net cash provided by operating activities	8,034	13,082	30,415
Cash flows from investing activities:
Acquisition of MCBI, net of cash acquired			(50,414)
Net cash used in investing activities			(50,414)
Cash flows from financing activities:
Proceeds from sale of common stock in initial public offering	64,519
Purchase of treasury stock		(11,079)	(4,418)
Proceeds from issuance of treasury stock for exercise of stock options	117	3,883	160
Purchase of trust preferred securities			(3,075)
Proceeds from note payable			31,000
Repayment of note payable	(27,679)	(3,321)
Dividends paid on common stock	(4,412)	(4,395)	(4,487)
Net cash provided (used) in financing activities	32,545	(14,912)	19,180
Net decrease in cash and cash equivalents	40,579	(1,830)	(819)
Cash and cash equivalents, beginning	5,057	6,887	7,706
Cash and cash equivalents, ending	$ 45,636	$ 5,057	$ 6,887

QUARTERLY FINANCIAL DATA (UN102

QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
QUARTERLY FINANCIAL DATA (UNAUDITED)
Interest income	$ 30,366	$ 29,569	$ 28,726	$ 27,998	$ 28,011	$ 27,695	$ 27,442	$ 26,803	$ 116,659	$ 109,951	$ 105,525
Interest expense	2,201	2,318	2,201	2,165	2,244	2,178	2,055	1,928	8,885	8,405	7,654
Net interest income (expense)	28,165	27,251	26,525	25,833	25,767	25,517	25,387	24,875	107,774	101,546	97,871
Provision (recapture) for loan losses	1,050	(1,654)	(694)	960	650	1,225	975	1,725	(338)	4,575	6,950
Net interest income after provision (recapture) for loan losses	27,115	28,905	27,219	24,873	25,117	24,292	24,412	23,150	108,112	96,971	90,921
Noninterest income	3,144	4,086	3,526	3,448	4,400	3,551	3,572	4,226	14,204	15,749	14,967
Noninterest expense	21,989	19,017	18,859	18,427	18,638	18,030	18,768	18,066	78,292	73,502	70,961
Net income before income tax expense	8,270	13,974	11,886	9,894	10,879	9,813	9,216	9,310	44,024	39,218	34,927
Income tax benefit	6,313	3,927	3,181	3,032	3,322	3,032	2,845	2,811	16,453	12,010	10,791
Net income	$ 1,957	$ 10,047	$ 8,705	$ 6,862	$ 7,557	$ 6,781	$ 6,371	$ 6,499	$ 27,571	$ 27,208	$ 24,136
Earnings per share:
Basic	$ 0.08	$ 0.46	$ 0.39	$ 0.31	$ 0.34	$ 0.31	$ 0.29	$ 0.29	$ 1.23	$ 1.23	$ 1.07
Diluted	$ 0.08	$ 0.45	$ 0.39	$ 0.31	$ 0.34	$ 0.31	$ 0.29	$ 0.29	$ 1.22	$ 1.22	$ 1.06