Old Second Bancorp (OSBC) 10-Q 8 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 04, 2017
Document and Entity Information
Entity Registrant Name	OLD SECOND BANCORP INC
Entity Central Index Key	357,173
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,580,430
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 41,332	$ 33,805
Interest bearing deposits with financial institutions	19,347	13,529
Cash and cash equivalents	60,679	47,334
Securities available-for-sale, at fair value	611,054	531,838
Federal Home Loan Bank and Federal Reserve Bank stock	8,593	7,918
Loans held-for-sale	3,933	4,918
Loans	1,488,021	1,478,809
Less: allowance for loan losses	15,741	16,158
Net loans	1,472,280	1,462,651
Premises and equipment, net	38,594	38,977
Other real estate owned	13,481	11,916
Mortgage servicing rights, net	6,608	6,489
Goodwill and core deposit intangible	8,993	9,018
Bank-owned life insurance (BOLI)	60,691	60,332
Deferred tax assets, net	49,699	53,464
Other assets	18,708	16,333
Total assets	2,353,313	2,251,188
Deposits:
Noninterest bearing demand	559,666	513,688
Interest bearing:
Savings, NOW, and money market	991,700	950,849
Time	385,788	402,248
Total deposits	1,937,154	1,866,785
Securities sold under repurchase agreements	34,731	25,715
Other short-term borrowings	85,000	70,000
Junior subordinated debentures	57,603	57,591
Senior notes	43,982	43,998
Other liabilities	12,526	11,889
Total liabilities	2,170,996	2,075,978
Stockholders' Equity
Common stock	34,570	34,534
Additional paid-in capital	116,938	116,653
Retained earnings	133,281	129,005
Accumulated other comprehensive loss	(6,128)	(8,762)
Treasury stock	(96,344)	(96,220)
Total stockholders' equity	182,317	175,210
Total liabilities and stockholders' equity	$ 2,353,313	$ 2,251,188

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Common stock, Par value (in dollars per share)	$ 1	$ 1
Common Stock, Shares authorized	60,000,000	60,000,000
Common stock, Shares issued	34,569,734	34,534,234
Common stock, Shares outstanding	29,580,430	29,556,216
Treasury stock, Shares	4,989,304	4,978,018

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest and Dividend Income
Loans, including fees	$ 16,609	$ 13,058
Loans held-for-sale	24	28
Securities:
Taxable	2,963	4,211
Tax exempt	1,065	179
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock	85	84
Interest bearing deposits with financial institutions	23	19
Total interest and dividend income	20,769	17,579
Interest Expense
Savings, NOW, and money market deposits	223	191
Time deposits	979	822
Other short-term borrowings	108	20
Junior subordinated debentures	1,084	1,084
Senior notes	673
Subordinated debt		239
Notes payable and other borrowings		2
Total interest expense	3,067	2,358
Net interest and dividend income	17,702	15,221
Net interest and dividend income after release for loan losses	17,702	15,221
Noninterest Income
Trust income	1,458	1,369
Service charges on deposits	1,618	1,559
Secondary mortgage fees	176	193
Mortgage servicing rights mark to market loss	(133)	(1,041)
Mortgage servicing gain / (loss), net of changes in fair value	435	421
Net gain on sales of mortgage loans	1,147	1,212
Securities loss, net	(136)	(61)
Increase in cash surrender value of bank-owned life insurance	359	285
Debit card interchange income	975	947
(Loss) gain on disposal and transfer of fixed assets	(2)	(1)
Other income	1,131	1,392
Total noninterest income	7,028	6,275
Noninterest Expense
Salaries and employee benefits	10,573	9,026
Occupancy expense, net	1,566	1,581
Furniture and equipment expense	1,090	925
FDIC insurance	148	203
General bank insurance	270	298
Amortization of core deposit intangible	25
Advertising expense	386	347
Debit card interchange expense	349	203
Legal fees	104	161
Other real estate expense, net	709	738
Other expense	2,834	2,782
Total noninterest expense	18,054	16,264
Income before income taxes	6,676	5,232
Provision for income taxes	2,104	1,910
Net income	4,572	3,322
Net income available to common stockholders	$ 4,572	$ 3,322
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.11
Diluted earnings per share (in dollars per share)	$ 0.15	$ 0.11

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements of Comprehensive Income
Net income	$ 4,572	$ 3,322
Unrealized holding (losses) gains on available-for-sale securities arising during the period	4,078	(2,309)
Related tax benefit (expense)	(1,614)	925
Holding (losses) gains after tax on available-for-sale securities	2,464	(1,384)
Less: Reclassification adjustment for the net (losses) gains realized during the period
Net realized (losses) gains	(136)	(61)
Income tax benefit (expense) on net realized gains	54	25
Net realized (losses) gains after tax	(82)	(36)
Other comprehensive (loss) income on available-for-sale securities	2,546	(1,348)
Accretion of net unrealized holding gains on held-to-maturity transferred from available-for-sale securities		224
Related tax expense		(92)
Other comprehensive income on held-to-maturity securities		132
Changes in fair value of derivatives used for cashflow hedges	149	(2,427)
Related tax benefit	(61)	972
Other comprehensive loss on cashflow hedges	88	(1,455)
Total other comprehensive income (loss) income	2,634	(2,671)
Total comprehensive income	$ 7,206	$ 651

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net income	$ 4,572	$ 3,322
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of leasehold improvement	593	563
Change in fair value of mortgage servicing rights	133	1,041
Provision for deferred tax expense	2,036	1,827
Originations of loans held-for-sale	(30,401)	(34,630)
Proceeds from sales of loans held-for-sale	32,313	32,395
Net gain on sales of mortgage loans	(1,147)	(1,212)
Net discount accretion of purchase accounting adjustment on loans	(355)
Change in current income taxes receivable (payable)	67	(17)
Increase in cash surrender value of bank-owned life insurance	(359)	(285)
Change in accrued interest receivable and other assets	(2,407)	983
Change in accrued interest payable and other liabilities	719	(1,365)
Net discount (accretion)/premium amortization on securities	122	(201)
Securities losses, net	136	61
Amortization of core deposit	25
Amortization of junior subordinated debentures issuance costs	12	12
Amortization of senior notes issuance costs	26
Stock based compensation	321	169
Net gain on sale of other real estate owned	(74)	(42)
Provision for other real estate owned losses	318	451
Net loss on disposal of fixed assets	2	1
Net cash provided by (used in) operating activities	6,652	3,073
Cash flows from investing activities
Proceeds from maturities and calls including pay down of securities available-for-sale	15,005	5,366
Proceeds from sales of securities available-for-sale	64,388	35,574
Purchases of securities available-for-sale	(154,653)	(88,005)
Proceeds from maturities and calls including pay down of securities held-to-maturity		2,129
Proceeds from sales of Federal Home Loan Bank stock	(675)
Net change in loans	(12,690)	(5,482)
Improvements in other real estate owned		(12)
Proceeds from sales of other real estate owned	1,607	1,381
Net purchases of premises and equipment	(212)	(103)
Net cash (used in) provided by investing activities	(87,230)	(49,152)
Cash flows from financing activities
Net change in deposits	70,369	37,608
Net change in securities sold under repurchase agreements	9,016	(218)
Net change in other short-term borrowings	15,000	5,000
Payment of senior note issuance costs	(42)
Dividends paid common stock	(296)
Purchase of treasury stock	(124)
Net cash (used in) provided by financing activities	93,923	42,390
Net change in cash and cash equivalents	13,345	(3,689)
Cash and cash equivalents at beginning of period	47,334	40,338
Cash and cash equivalents at end of period	60,679	36,649
Supplemental cash flow information
Income taxes paid		100
Interest paid for deposits	1,247	1,019
Interest paid for borrowings	1,164	1,333
Non-cash transfer of loans to other real estate owned	$ 3,416	$ 382

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance at Dec. 31, 2015	$ 34,427	$ 115,918	$ 114,209	$ (12,659)	$ (95,966)	$ 155,929
Increase (Decrease) in Stockholders' Equity
Net income			3,322			3,322
Other comprehensive gain, net of tax				(2,671)		(2,671)
Stock based compensation		169				169
Balance at Mar. 31, 2016	34,427	116,087	117,531	(15,330)	(95,966)	156,749
Balance at Dec. 31, 2016	34,534	116,653	129,005	(8,762)	(96,220)	175,210
Increase (Decrease) in Stockholders' Equity
Net income			4,572			4,572
Other comprehensive gain, net of tax				2,634		2,634
Dividends declared and paid			(296)			(296)
Change in restricted stock	36	(36)
Stock based compensation		321				321
Purchase of treasury stock					(124)	(124)
Balance at Mar. 31, 2017	$ 34,570	$ 116,938	$ 133,281	$ (6,128)	$ (96,344)	$ 182,317

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 1 – Summary of Significant Accounting Policies The accounting policies followed in the preparation of the interim consolidated financial statements are consistent with those used in the preparation of the annual financial information. The interim consolidated financial statements reflect all normal and recurring adjustments that are necessary, in the opinion of management, for a fair statement of results for the interim period presented. Results for the period ended March 31, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These interim consolidated financial statements are unaudited and should be read in conjunction with the audited financial statements and notes included in Old Second Bancorp, Inc.’s (the “Company”) annual report on Form 10-K for the year ended December 31, 2016. Unless otherwise indicated, amounts in the tables contained in the notes to the consolidated financial statements are in thousands. Certain items in prior periods have been reclassified to conform to the current presentation. The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the consolidated financial statements. Future changes in information may affect these estimates, assumptions, and judgments, which, in turn, may affect amounts reported in the consolidated financial statements. All significant accounting policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the consolidated financial statements and how those values are determined. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised 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 and services. In August 2015, the FASB issued ASU 2015-14 “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date .” This accounting standards update defers the effective date of ASU 2014-09 for an additional year. ASU 2015-14 will be effective for annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is not permitted. In March 2016, the FASB issued ASU 2016-08 “ Revenue from Contracts with Customers (TOPIC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” and in April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (TOPIC 606): Identifying Performance Obligations and Licensing.” ASU 2016-08 requires the entity to determine if it is acting as a principal with control over the goods or services it is contractually obligated to provide, or an agent with no control over specified goods or services provided by another party to a customer. ASU 2016-10 was issued to further clarify ASU 2014-09 implementation regarding identifying performance obligation materiality, identification of key contract components, and scope. The Company is assessing the impact of ASU 2014-09 and other related ASUs as noted above on its accounting and disclosures within noninterest income, as any interest income impact was not included in the scope of this final ASU pronouncement. In February 2016, the FASB issued ASU No. 2016-02- “ Leases (Topic 842) .” This ASU was issued to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. One key revision from prior guidance was to include operating leases within assets and liabilities recorded; another revision was included which created a new model to follow for sale-leaseback transactions. The impact of this pronouncement will affect lessees primarily, as virtually all of their assets will be recognized on the balance sheet, by recording a right of use asset and lease liability. This pronouncement is effective for fiscal years beginning after December 15, 2018. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures. In March 2016, the FASB issued ASU No. 2016-09 “ Stock Compensation - Improvements to Employee Share-Based Payment Accounting (Topic 718). ” FASB issued this ASU as part of the Simplification Initiative. This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. This standard was adopted by the Company effective January 2017; the adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In June 2016, the FASB issued ASU No. 2016-13 “ Measurement of Credit Losses on Financial Instruments (Topic 326). ” ASU 2016-13 was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date to enhance the decision making process. The new methodology to be used should reflect expected credit losses based on relevant vintage historical information, supported by reasonable forecasts of projected loss given defaults, which will affect the collectability of the reported amounts. This new methodology will also require available-for-sale debt securities to have a credit loss recorded through an allowance rather than write-downs. ASU 2016-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures, and is in the process of accumulating data to support future risk assessments. In March 2017, the FASB issued ASU No. 2017-08 “ Receivables-Nonrefundable Fees and Other Costs – Premium Amortization on Purchased Callable Debt Securities (Subtopic 310-20) .” This ASU was issued to shorten the amortization period for the premium to the earliest call date on debt securities. This premium will now be recorded as a reduction to net interest margin during the shorter yield to call period, as compared to prior practice of amortizing the premium as a reduction to net interest margin over the contractual life of the instrument. This ASU does not change the current method of amortizing any discount over the contractual life of the debt security, and this pronouncement is effective for fiscal years beginning after December 15, 2018, with earlier adoption permitted. The Company is assessing the impact of ASU 2017-08 on its accounting and disclosures, as this pronouncement will reduce net interest income over the period until the security’s call date, as compared to a net interest income reduction for all remaining premium as of the date of call if earlier than the date of maturity. Subsequent Events On April 18, 2017, the Company’s Board of Directors declared a cash dividend of 1 cent per share payable on May 8, 2017, to stockholders of record as of April 28, 2017. On April 25, 2017, the Company announced Bradley S. Adams will start as Executive Vice President, Chief Financial Officer, effective May 2, 2017. Mr. Adams will also serve as the Company’s principal financial officer and principal accounting officer.

Acquisitions

Acquisitions	3 Months Ended
	Mar. 31, 2017
Talmer
Business Acquisition [Line Items]
Acquisitions	Note 2 – Acquisitions On October 28, 2016, the Bank acquired the Chicago branch of Talmer Bank and Trust, the banking subsidiary of Talmer Bancorp, Inc. (“Talmer”). As a result of this transaction, the Bank recorded assets with a fair value of approximately $230.9 million, including approximately $221.0 million of loans, and assumed deposits with a fair value of approximately $48.9 million. Goodwill of $8.4 million was included within the total assets recorded upon acquisition; net cash of $181.5 million was paid for the purchase.

Securities

Securities	3 Months Ended
	Mar. 31, 2017
Securities
Securities	Note 3 – Securities Investment Portfolio Management Our investment portfolio serves the liquidity needs and income objectives of the Company. While the portfolio serves as an important component of the overall liquidity management at the Bank, portions of the portfolio also serve as income producing assets. The size and composition of the portfolio reflects liquidity needs, loan demand and interest income objectives. Portfolio size and composition will be adjusted from time to time. While a significant portion of the portfolio consists of readily marketable securities to address liquidity, other parts of the portfolio may reflect funds invested pending future loan demand or to maximize interest income without undue interest rate risk. Investments are comprised of debt securities and non-marketable equity investments. Securities available-for-sale are carried at fair value. Unrealized gains and losses, net of tax, on securities available-for-sale are reported as a separate component of equity. This balance sheet component changes as interest rates and market conditions change. Unrealized gains and losses are not included in the calculation of regulatory capital. FHLBC and FRBC stock are considered nonmarketable equity investments. FHLBC stock was recorded at $3.8 million at March 31, 2017, and $3.1 million at December 31, 2016, and is necessary to maintain access to FHLBC advances, which are utilized as a component to meet the Bank’s daily funding needs. FRBC stock was recorded at $4.8 million at March 31, 2017, and December 31, 2016. The following table summarizes the amortized cost and fair value of the securities portfolio at March 31, 2017, and December 31, 2016, and the corresponding amounts of gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized Fair March 31, 2017 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed $ 38,933 $ 17 $ (392) $ 38,558 States and political subdivisions 219,223 856 (572) 219,507 Corporate bonds 12,807 47 (314) 12,540 Collateralized mortgage obligations 110,805 119 (2,600) 108,324 Asset-backed securities 146,103 196 (6,413) 139,886 Collateralized loan obligations 92,564 21 (346) 92,239 Total securities available-for-sale $ 620,435 $ 1,256 $ (10,637) $ 611,054 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2016 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed 42,511 - (977) 41,534 States and political subdivisions 68,718 258 (273) 68,703 Corporate bonds 10,957 9 (336) 10,630 Collateralized mortgage obligations 174,352 374 (3,799) 170,927 Asset-backed securities 146,391 341 (8,325) 138,407 Collateralized loan obligations 102,504 29 (896) 101,637 Total securities available-for-sale $ 545,433 $ 1,011 $ (14,606) $ 531,838 The fair value, amortized cost and weighted average yield of debt securities at March 31, 2017, by contractual maturity, were as follows in the table below. Securities not due at a single maturity date are shown separately. Weighted Amortized Average Fair Securities available-for-sale Cost Yield Value Due in one year or less $ 23,410 2.39 % $ 23,483 Due after one year through five years 4,923 3.10 4,912 Due after five years through ten years 18,267 2.98 18,089 Due after ten years 185,430 3.68 185,563 232,030 3.48 232,047 Mortgage-backed and collateralized mortgage obligations 149,738 2.32 146,882 Asset-backed securities 146,103 2.23 139,886 Collateralized loan obligations 92,564 3.90 92,239 Total securities available-for-sale $ 620,435 2.97 % $ 611,054 At March 31, 2017, the Company’s investments include $119.0 million of asset-backed securities that are backed by student loans originated under the Federal Family Education Loan program (“FFEL”). Under the FFEL, private lenders made federally guaranteed student loans to parents and students and packaged and sold them as asset-backed securities. While the program was modified several times before elimination in 2010, not less than 97% of the outstanding principal amount of the loans made under FFEL are guaranteed by the U.S. Department of Education. In addition to the U.S. Department of Education guarantee, total added credit enhancement in the form of overcollateralization and/or subordination amounted to $13.0 million, or 10.01%, of outstanding principal. Securities with unrealized losses at March 31, 2017, and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands except for number of securities): Less than 12 months 12 months or more March 31, 2017 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies mortgage-backed 10 $ 369 $ 23,831 1 $ 23 $ 890 11 $ 392 $ 24,721 States and political subdivisions 24 572 76,287 - - - 24 572 76,287 Corporate bonds 1 169 4,831 2 145 5,203 3 314 10,034 Collateralized mortgage obligations 13 2,388 88,320 4 212 11,660 17 2,600 99,980 Asset-backed securities 1 266 4,287 15 6,147 125,035 16 6,413 129,322 Collateralized loan obligations 2 4 9,977 8 342 57,306 10 346 67,283 Total securities available-for-sale 51 $ 3,768 $ 207,533 30 $ 6,869 $ 200,094 81 $ 10,637 $ 407,627 Less than 12 months 12 months or more December 31, 2016 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies mortgage-backed 11 $ 957 40,636 1 $ 20 $ 898 12 $ 977 $ 41,534 States and political subdivisions 12 273 35,241 - - - 12 273 35,241 Corporate bonds 1 183 4,817 2 153 5,328 3 336 10,145 Collateralized mortgage obligations 16 3,402 117,752 7 397 18,109 23 3,799 135,861 Asset-backed securities 4 328 17,604 12 7,997 107,112 16 8,325 124,716 Collateralized loan obligations - - - 12 896 81,613 12 896 81,613 Total securities available-for-sale 44 $ 5,143 $ 216,050 34 $ 9,463 $ 213,060 78 $ 14,606 $ 429,110 Recognition of other-than-temporary impairment was not necessary in the three months ending March 31, 2017, March 31, 2016, or the year ended December 31, 2016. The changes in fair value related primarily to interest rate fluctuations. Our review of other-than-temporary impairment determined that there was no credit quality deterioration.

Loans

Loans	3 Months Ended
	Mar. 31, 2017
Loans
Loans	Note 4 – Loans Major classifications of loans were as follows: March 31, 2017 December 31, 2016 Commercial $ 233,922 $ 228,113 Real estate - commercial 713,358 736,247 Real estate - construction 87,049 64,720 Real estate - residential 373,477 377,851 Consumer 2,913 3,237 Overdraft 190 436 Lease financing receivables 64,607 55,451 Other 11,645 11,537 1,487,161 1,477,592 Net deferred loan costs 860 1,217 Total loans $ 1,488,021 $ 1,478,809 It is the policy of the Company to review each prospective credit prior to making a loan in order to determine if an adequate level of security or collateral has been obtained. The type of collateral, when required, will vary from liquid assets to real estate. The Company’s access to collateral, in the event of borrower default, is assured through adherence to lending laws, the Company’s lending standards and credit monitoring procedures. With selected exceptions, the Bank makes loans solely within its market area. There are no significant concentrations of loans where the customers’ ability to honor loan terms is dependent upon a single economic sector, although the real estate related categories listed above represent 78.9% and 79.7% of the portfolio at March 31, 2017, and December 31, 2016, respectively. Aged analysis of past due loans by class of loans was as follows: Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and March 31, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ - $ - $ - $ - $ 233,697 $ 225 $ 233,922 $ - Leases 939 - - 939 63,184 484 64,607 Real estate - commercial Owner occupied general purpose 175 - - 175 135,289 659 136,123 - Owner occupied special purpose - - - - 172,647 375 173,022 - Non-owner occupied general purpose - - - - 220,541 1,088 221,629 - Non-owner occupied special purpose - - - - 121,661 - 121,661 - Retail properties - - - - 45,184 1,161 46,345 - Farm 18 - - 18 14,560 - 14,578 - Real estate - construction Homebuilder - - - - 3,226 - 3,226 - Land - - - - 2,900 - 2,900 - Commercial speculative - - - - 27,061 70 27,131 - All other 76 - - 76 53,512 204 53,792 - Real estate - residential Investor 312 - - 312 59,785 749 60,846 - Multifamily - 5,004 - 5,004 87,136 - 92,140 - Owner occupied 1,403 - - 1,403 112,972 5,249 119,624 - Revolving and junior liens 535 162 57 754 98,734 1,379 100,867 57 Consumer 6 - - 6 2,897 10 2,913 - Other 1 - - - - 12,695 - 12,695 - Total $ 3,464 $ 5,166 $ 57 $ 8,687 $ 1,467,681 $ 11,653 $ 1,488,021 $ 57 Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2016 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 57 $ 74 $ - $ 131 $ 227,742 $ 240 $ 228,113 $ - Leases - 286 286 54,799 366 55,451 Real estate - commercial Owner occupied general purpose 758 - - 758 135,599 879 137,236 - Owner occupied special purpose - - - - 177,755 385 178,140 - Non-owner occupied general purpose 667 379 - 1,046 229,315 1,930 232,291 - Non-owner occupied special purpose - - - - 118,052 1,013 119,065 - Retail properties - - - - 53,474 1,179 54,653 - Farm 1,353 - - 1,353 13,509 - 14,862 - Real estate - construction Homebuilder - - - - 3,883 - 3,883 - Land - - - - 3,029 - 3,029 - Commercial speculative - - - - 22,654 74 22,728 - All other 364 - - 364 34,509 207 35,080 - Real estate - residential Investor 237 - - 237 54,924 936 56,097 - Multifamily - - - 96,502 - 96,502 Owner occupied 274 - - 274 116,900 6,452 123,626 - Revolving and junior liens 225 405 - 630 99,374 1,622 101,626 - Consumer 10 36 - 46 3,191 - 3,237 - Other 1 14 - - 14 13,176 - 13,190 - Total $ 3,959 $ 1,180 $ - $ 5,139 $ 1,458,387 $ 15,283 $ 1,478,809 $ - 1 The “Other” class includes overdrafts and net deferred costs. Credit Quality Indicators The Company categorizes loans into credit risk categories based on current financial information, overall debt service coverage, comparison against industry averages, historical payment experience, and current economic trends. This analysis includes loans with outstanding balances or commitments greater than $50,000 and excludes homogeneous loans such as home equity lines of credit and residential mortgages. Loans with a classified risk rating are reviewed quarterly regardless of size or loan type. The Company uses the following definitions for classified risk ratings: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Credits that are not covered by the definitions above are pass credits, which are not considered to be adversely rated. Credit Quality Indicators by class of loans were as follows: March 31, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 213,758 $ 18,165 $ 1,999 $ - $ 233,922 Leases 62,505 939 1,163 - 64,607 Real estate - commercial Owner occupied general purpose 132,769 1,910 1,444 - 136,123 Owner occupied special purpose 169,561 3,086 375 - 173,022 Non-owner occupied general purpose 219,883 658 1,088 - 221,629 Non-owner occupied special purpose 117,945 - 3,716 - 121,661 Retail Properties 43,929 1,255 1,161 - 46,345 Farm 12,050 1,213 1,315 - 14,578 Real estate - construction Homebuilder 3,226 - - - 3,226 Land 2,900 - - - 2,900 Commercial speculative 27,061 - 70 - 27,131 All other 53,411 - 381 - 53,792 Real estate - residential Investor 59,938 - 908 - 60,846 Multifamily 87,136 5,004 - - 92,140 Owner occupied 113,133 568 5,923 - 119,624 Revolving and junior liens 98,674 - 2,193 - 100,867 Consumer 2,902 - 11 - 2,913 Other 12,695 - - - 12,695 Total $ 1,433,476 $ 32,798 $ 21,747 $ - $ 1,488,021 December 31, 2016 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 214,028 $ 11,558 $ 2,527 $ - $ 228,113 Leases 53,366 976 1,109 55,451 Real estate - commercial Owner occupied general purpose 135,503 53 1,680 - 137,236 Owner occupied special purpose 172,353 5,402 385 - 178,140 Non-owner occupied general purpose 229,448 913 1,930 - 232,291 Non-owner occupied special purpose 114,293 - 4,772 - 119,065 Retail Properties 52,207 1,267 1,179 - 54,653 Farm 11,840 1,240 1,782 - 14,862 Real estate - construction Homebuilder 3,883 - - - 3,883 Land 3,029 - - - 3,029 Commercial speculative 22,654 - 74 - 22,728 All other 34,696 - 384 - 35,080 Real estate - residential Investor 55,001 - 1,096 - 56,097 Multifamily 96,502 - - - 96,502 Owner occupied 115,831 570 7,225 - 123,626 Revolving and junior liens 99,286 - 2,340 - 101,626 Consumer 3,236 - 1 - 3,237 Other 13,165 25 - - 13,190 Total $ 1,430,321 $ 22,004 $ 26,484 $ - $ 1,478,809 1 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans. The Company had $1.1 million and $1.8 million residential assets in the process of foreclosure as of March 31, 2017, and December 31, 2016, respectively. The Company also had $1.3 million and $225,000 in residential real estate included in OREO as of March 31, 2017, and December 31, 2016, respectively. Impaired loans, which include nonaccrual loans and troubled debt restructurings, by class of loans for the March 2017 periods listed were as follows: Three Months Ended As of March 31, 2017 March 31, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 225 $ 376 $ - $ 132 $ - Leases 484 502 - 425 - Commercial real estate Owner occupied general purpose 659 719 - 1,270 - Owner occupied special purpose 375 513 - 380 - Non-owner occupied general purpose 1,146 1,430 - 1,445 1 Non-owner occupied special purpose - - - 506 - Retail properties 1,161 1,221 - 1,170 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 70 80 - 72 - All other 204 220 - 206 - Residential Investor 1,646 2,128 - 1,744 12 Multifamily - - - - - Owner occupied 8,581 9,894 - 9,202 39 Revolving and junior liens 2,410 2,755 - 2,447 9 Consumer 10 10 - 106 - Total impaired loans with no recorded allowance 16,971 19,848 - 19,105 61 With an allowance recorded Commercial - - - - - Leases Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily Owner occupied 803 853 803 803 - Revolving and junior liens - - - - - Consumer - - - - - Total impaired loans with a recorded allowance 803 853 803 926 - Total impaired loans $ 17,774 $ 20,701 $ 803 $ 20,031 $ 61 Impaired loans by class of loans as of December 31, 2016, and for the three months ended March 31, 2016, were as follows: Three Months Ended As of December 31, 2016 March 31, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 67 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,506 22 Owner occupied special purpose 385 518 - 823 - Non-owner occupied general purpose 1,744 2,010 - 1,029 1 Non-owner occupied special purpose 1,013 1,649 - - - Retail properties 1,179 1,235 - - - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 82 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,889 12 Multifamily - - - - - Owner occupied 9,824 11,391 - 10,440 41 Revolving and junior liens 2,484 3,018 - 2,747 2 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 20,219 78 With an allowance recorded Commercial - - - 238 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 56 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 317 - Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 20,536 $ 78 Troubled debt restructurings (“TDRs”) are loans for which the contractual terms have been modified and both of these conditions exist: (1) there is a concession to the borrower and (2) the borrower is experiencing financial difficulties. Loans are restructured on a case-by-case basis during the loan collection process with modifications generally initiated at the request of the borrower. These modifications may include reduction in interest rates, extension of term, deferrals of principal, and other modifications. The Bank participates in the U.S. Department of the Treasury’s (the “Treasury”) Home Affordable Modification Program (“HAMP”) which gives qualifying homeowners an opportunity to refinance into more affordable monthly payments. The specific allocation of the allowance for loan losses for all loans, including TDRs, is determined by either discounting the modified cash flows at the original effective rate of the loan before modification or is based on the underlying collateral value less costs to sell, if repayment of the loan is collateral-dependent. If the resulting amount is less than the recorded book value, the Bank either establishes a valuation allowance (i.e. specific reserve) as a component of the allowance for loan losses or charges off the impaired balance if it determines that such amount is a confirmed loss. This method is used consistently for all segments of the portfolio. The allowance for loan losses also includes an allowance based on a loss migration analysis for each loan category on loans that are not individually evaluated for specific impairment. All loans charged-off, including TDRs charged-off, are factored into this calculation by portfolio segment. TDRs that were modified during the period are as follows: TDR Modifications Three Months Ended March 31, 2017 # of Pre-modification Post-modification contracts recorded investment recorded investment Troubled debt restructurings Real estate - residential Revolving and junior liens HAMP 2 1 $ 56 $ 56 Other 1 3 188 187 Total 4 $ 244 $ 243 TDR Modifications Three Months Ended March 31, 2016 # of Pre-modification Post-modification contracts recorded investment recorded investment Troubled debt restructurings Real estate - commercial Other 1 2 $ 312 $ 232 Real estate - residential Owner occupied HAMP 2 1 $ 239 $ 239 Revolving and junior liens HAMP 2 3 430 403 Total 6 $ 981 $ 874 1 Other: Change of terms from bankruptcy court 2 HAMP: Home Affordable Modification Program TDRs are classified as being in default on a case-by-case basis when they fail to be in compliance with the modified terms. There was no TDR default activity for three months ending March 31, 2017, and March 31, 2016, for loans that were restructured within the 12 month period prior to default.

Allowance for Loan Losses

Allowance for Loan Losses	3 Months Ended
	Mar. 31, 2017
Allowance for Loan Losses
Allowance for Loan Losses	Note 5 – Allowance for Loan Losses Changes in the allowance for loan losses by segment of loans based on method of impairment for three months ending March 31, 2017, were as follows: Real Estate Real Estate Real Estate Allowance for loan losses: Commercial Leases Commercial Construction Residential Consumer Other Total Three months ended March 31, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 1 117 274 4 195 100 - 691 Recoveries 2 - 35 18 142 75 2 274 Provision (Release) 42 87 (1,477) 575 417 (44) 400 - Ending balance $ 1,672 $ 603 $ 7,831 $ 978 $ 3,056 $ 764 $ 837 $ 15,741 Ending balance: Individually evaluated for impairment $ - $ - $ - $ - $ 803 $ - $ - $ 803 Ending balance: Collectively evaluated for impairment $ 1,672 $ 603 $ 7,831 $ 978 $ 2,253 $ 764 $ 837 $ 14,938 Loans: Ending balance $ 233,922 $ 64,607 $ 713,358 $ 87,049 $ 373,477 $ 2,913 $ 12,695 $ 1,488,021 Ending balance: Individually evaluated for impairment $ 24 $ 484 $ 3,341 $ 274 $ 13,441 $ 210 $ - $ 17,774 Ending balance: Collectively evaluated for impairment $ 233,898 $ 64,123 $ 710,017 $ 86,775 $ 360,036 $ 2,703 $ 12,695 $ 1,470,247 Changes in the allowance for loan losses by segment of loans based on method of impairment for March 31, 2016, were as follows: Real Estate Real Estate Real Estate Allowance for loan losses: Commercial Leases Commercial Construction Residential Consumer Other Total Three months ended March 31, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 11 13 2 - 266 83 - 375 Recoveries 4 - 83 5 229 71 6 398 Provision (Release) 139 142 (301) (20) 7 (103) 136 - Ending balance $ 2,173 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,075 $ 2,107 $ 16,246 Ending balance: Individually evaluated for impairment $ 68 $ - $ - $ - $ - $ - $ - $ 68 Ending balance: Collectively evaluated for impairment $ 2,105 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,075 $ 2,107 $ 16,178 Loans: Ending balance $ 120,460 $ 30,647 $ 598,943 $ 20,331 $ 351,849 $ 2,663 $ 13,945 $ 1,138,838 Ending balance: Individually evaluated for impairment $ 536 $ - $ 4,592 $ 81 $ 14,976 $ - $ - $ 20,185 Ending balance: Collectively evaluated for impairment $ 119,924 $ 30,647 $ 594,351 $ 20,250 $ 336,873 $ 2,663 $ 13,945 $ 1,118,653

Other Real Estate Owned

Other Real Estate Owned	3 Months Ended
	Mar. 31, 2017
Other Real Estate Owned
Other Real Estate Owned	Note 6 – Other Real Estate Owned Details related to the activity in the other real estate owned (“OREO”) portfolio, net of valuation reserve, for the periods presented are itemized in the following table: Three Months Ended March 31, Other real estate owned 2017 2016 Balance at beginning of period $ 11,916 $ 19,141 Property additions 3,416 382 Property improvements - 12 Less: Proceeds from property disposals, net of gains/losses 1,533 1,339 Period valuation adjustments 318 451 Balance at end of period $ 13,481 $ 17,745 Activity in the valuation allowance was as follows: Three Months Ended March 31, 2017 2016 Balance at beginning of period $ 9,982 $ 14,127 Provision for unrealized losses 318 451 Reductions taken on sales (641) (179) Balance at end of period $ 9,659 $ 14,399 Expenses related to OREO, net of lease revenue includes: Three Months Ended March 31, 2017 2016 Gain on sales, net $ (74) $ (42) Provision for unrealized losses 318 451 Operating expenses 523 436 Less: Lease revenue 58 107 Net OREO expense $ 709 $ 738

Deposits

Deposits	3 Months Ended
	Mar. 31, 2017
Deposits
Deposits	Note 7 – Deposits Major classifications of deposits were as follows: March 31, 2017 December 31, 2016 Noninterest bearing demand $ 559,666 $ 513,688 Savings 266,007 256,159 NOW accounts 439,276 419,417 Money market accounts 286,417 275,273 Certificates of deposit of less than $100,000 222,754 228,993 Certificates of deposit of $100,000 through $250,000 105,728 110,992 Certificates of deposit of more than $250,000 57,306 62,263 Total deposits $ 1,937,154 $ 1,866,785

Borrowings

Borrowings	3 Months Ended
	Mar. 31, 2017
Borrowings
Borrowings	Note 8 – Borrowings The following table is a summary of borrowings as of March 31, 2017, and December 31, 2016. Junior subordinated debentures are discussed in detail in Note 9: March 31, 2017 December 31, 2016 Securities sold under repurchase agreements $ 34,731 $ 25,715 FHLBC advances 1 85,000 70,000 Junior subordinated debentures 57,603 57,591 Senior notes 43,982 43,998 Total borrowings $ 221,316 $ 197,304 1 Included in other short-term borrowings on the balance sheet. The Company enters into deposit sweep transactions where the transaction amounts are secured by pledged securities. These transactions consistently mature overnight from the transaction date and are governed by sweep repurchase agreements. All sweep repurchase agreements are treated as financings secured by U.S. government agencies and collateralized mortgage-backed securities and had a carrying amount of $34.7 million at March 31, 2017, and $25.7 million at December 31, 2016. The fair value of the pledged collateral was $42.4 million at March 31, 2017, and $43.0 million at December 31, 2016. At March 31, 2017, there were no customers with secured balances exceeding 10% of stockholders’ equity. The Company’s borrowings at the FHLBC require the Bank to be a member and invest in the stock of the FHLBC. Total borrowings are generally limited to the lower of 35% of total assets or 60% of the book value of certain mortgage loans. As of March 31, 2017, the Bank had $85.0 million advances outstanding under the FHLBC as compared to $70.0 million outstanding as of December 31, 2016. As of March 31, 2017, FHLBC stock held was valued at $3.8 million, and any potential FHLBC advances were collateralized by securities with a fair value of $91.0 million and loans with a principal balance of $173.4 million, which carried a FHLBC calculated combined collateral value of $159.6 million. The Company had excess collateral of $38.3 million available to secure borrowings at March 31, 2017. The Company completed a debt retirement and simultaneous senior debt offering in the fourth quarter of 2016. Subordinated debt of $45.0 million and $500,000 of senior debt outstanding were paid off with the proceeds of a $45.0 million senior notes issuance and cash on hand. The senior notes mature in ten years, and terms include interest payable semiannually at 5.75% for five years. Beginning December 2021, the senior debt will pay interest at a floating rate, with interest payable quarterly at three month LIBOR plus 385 basis points. The notes are redeemable, in whole or in part, at the option of the Company, beginning with the interest payment date on December 31, 2021, and on any floating rate interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the notes plus accrued and unpaid interest. Debt issuance costs incurred for the senior note issuance totaled $1.0 million, and will be deferred and recorded to expense over the ten year term of the notes.

Junior Subordinated Debentures

Junior Subordinated Debentures	3 Months Ended
	Mar. 31, 2017
Junior Subordinated Debentures.
Junior Subordinated Debentures	Note 9 – Junior Subordinated Debentures The Company completed the sale of $27.5 million of cumulative trust preferred securities by its unconsolidated subsidiary, Old Second Capital Trust I, in June 2003. An additional $4.1 million of cumulative trust preferred securities were sold in July 2003. The trust preferred securities may remain outstanding for a 30-year term but, subject to regulatory approval, can be called in whole or in part by the Company after June 30, 2008. When not in deferral, distributions on the securities are payable quarterly at an annual rate of 7.80%. The Company issued a new $32.6 million subordinated debenture to Old Second Capital Trust I in return for the aggregate net proceeds of this trust preferred offering. The interest rate and payment frequency on the debenture are equivalent to the cash distribution basis on the trust preferred securities. The Company issued an additional $25.0 million of cumulative trust preferred securities through a private placement completed by an additional, unconsolidated subsidiary, Old Second Capital Trust II, in April 2007. These trust preferred securities also mature in 30 years, but subject to the aforementioned regulatory approval, can be called in whole or in part on a quarterly basis commencing June 15, 2017. The quarterly cash distributions on the securities are fixed at 6.77% through June 15, 2017, and float at 150 basis points over three-month LIBOR thereafter. The Company issued a new $25.8 million subordinated debenture to Old Second Capital Trust II in return for the aggregate net proceeds of this trust preferred offering. The interest rate and payment frequency on the debenture are equivalent to the cash distribution basis on the trust preferred securities. Both of the debentures issued by the Company are disclosed on the Consolidated Balance Sheet as junior subordinated debentures and the related interest expense for each issuance is included in the Consolidated Statements of Income. As of March 31, 2017, the Company is current on the payments due on these securities.

Equity Compensation Plans

Equity Compensation Plans	3 Months Ended
	Mar. 31, 2017
Equity Compensation Plans
Equity Compensation Plans	Note 10 – Equity Compensation Plans Stock-based awards are outstanding under the Company’s 2008 Equity Incentive Plan (the “2008 Plan”) and the Company’s 2014 Equity Incentive Plan (the “2014 Plan,” and together with the 2008 Plan, the “Plans”). The 2014 Plan was approved at the 2014 annual meeting of stockholders; a maximum of 375,000 shares were authorized to be issued under this plan. Following approval of the 2014 Plan, no further awards will be granted under the 2008 Plan or any other Company equity compensation plan. At the May 2016 annual stockholders meeting, an amendment to the 2014 Plan authorized an additional 600,000 shares to be issued, which resulted in a total of 975,000 shares authorized for issuance under this plan. The 2014 Plan authorizes the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights. Awards may be granted to selected directors and officers or employees under the 2014 Plan at the discretion of the Compensation Committee of the Company’s Board of Directors. As of March 31, 2017, 431,500 shares remained available for issuance under the 2014 Plan. There were no stock options granted or exercised in the first quarter of 2017 and 2016. All stock options are granted for a term of ten years. There is no unrecognized compensation cost related to unvested stock options as all stock options of the Company’s common stock have fully vested. A summary of stock option activity in the Plans for the three months ending March 31, 2017, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding 94,500 $ 25.82 Canceled - - Expired - - Exercised - - Ending outstanding 94,500 $ 25.82 0.8 Exercisable at end of period 94,500 $ 25.82 0.8 Generally, restricted stock and restricted stock units granted under the Plans vest three years from the grant date, but the Compensation Committee of the Company’s Board of Directors has discretionary authority to change some terms including the amount of time until the vest date. Awards under the 2008 Plan will become fully vested upon a merger or change in control of the Company. Under the 2014 Plan, upon a change in control of the Company, if (i) the 2014 Plan is not an obligation of the successor entity following the change in control, or (ii) the 2014 Plan is an obligation of the successor entity following the change in control and the participant incurs an involuntary termination, then the stock options, stock appreciation rights, stock awards and cash incentive awards under the 2014 Plan will become fully exercisable and vested. Performance-based awards generally will vest based upon the level of achievement of the applicable performance measures through the change in control. The Company granted restricted stock under its equity compensation plans beginning in 2005 and it began granting restricted stock units in February 2009. Restricted stock awards under the Plans generally entitle holders to voting and dividend rights upon grant and are subject to forfeiture until certain restrictions have lapsed including employment for a specific period. Restricted stock units under the Plans are also subject to forfeiture until certain restrictions have lapsed including employment for a specific period, but do not entitle holders to voting rights until the restricted period ends and shares are transferred in connection with the units. There were 125,500 restricted awards issued under the 2014 Plan during the three months ended March 31, 2017. There were 120,000 restricted awards issued during the three months ended March 31, 2016. Compensation expense is recognized over the vesting period of the restricted award based on the market value of the award on the issue date. Total compensation cost that has been recorded for the 2014 Plan was $335,000 in the first three months of 2017. A summary of changes in the Company’s unvested restricted awards for the three months ending March 31, 2017, is as follows: March 31, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 125,500 10.85 Vested (35,500) 5.47 Forfeited (1,000) 5.38 Nonvested at March 31 498,000 $ 7.18 Total unrecognized compensation cost of restricted awards was $2.2 million as of March 31, 2017, which is expected to be recognized over a weighted-average period of 2.41 years. Total unrecognized compensation cost of restricted awards was $1.1 million as of March 31, 2016, which was expected to be recognized over a weighted-average period of 2.27 years.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share
Earnings Per Share	Note 11 – Earnings Per Share The earnings per share – both basic and diluted – are included below as of March 31 (in thousands except for share data): Three Months Ended March 31, 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,560,521 29,483,429 Net income available to common stockholders $ 4,572 $ 3,322 Basic earnings per share $ 0.15 $ 0.11 Diluted earnings per share: Weighted-average common shares outstanding 29,560,521 29,483,429 Dilutive effect of nonvested restricted awards 1 378,112 322,341 Dilutive effect of stock options 2,317 - Diluted average common shares outstanding 29,940,950 29,805,770 Net earnings available to common stockholders $ 4,572 $ 3,322 Diluted earnings per share $ 0.15 $ 0.11 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 977,839 1 Includes the common stock equivalents for restricted share rights that are dilutive. The above earnings per share calculation did not include a warrant for 815,339 shares of common stock, at an exercise price of $13.43 per share, that was outstanding as of March 31, 2017, and March 31, 2016, because the warrant was anti-dilutive. Of note, the ten year warrant was issued in 2009, and was sold at auction by the Treasury in June 2013 to a third party investor.

Regulatory & Capital Matters

Regulatory & Capital Matters	3 Months Ended
	Mar. 31, 2017
Regulatory & Capital Matters
Regulatory & Capital Matters	Note 12 – Regulatory & Capital Matters The Bank is subject to the risk-based capital regulatory guidelines, which include the methodology for calculating the risk-weighted Bank assets, developed by the Office of the Comptroller of the Currency (the “OCC”) and the other bank regulatory agencies. In connection with the current economic environment, the Bank’s current level of nonperforming assets and the risk-based capital guidelines, the Bank’s Board of Directors has determined that the Bank should maintain a Tier 1 leverage capital ratio at or above eight percent (8%) and a total risk-based capital ratio at or above twelve percent (12%). At March 31, 2017, the Bank exceeded those thresholds. At March 31, 2017, the Bank’s Tier 1 capital leverage ratio was 10.14%, a decrease of 10 basis points from December 31, 2016, but well above the 8.00% objective. The Bank’s total capital ratio was 13.33%, a decrease of 12 basis points from December 31, 2016, but also well above the objective of 12.00%. Bank holding companies are required to maintain minimum levels of capital in accordance with capital guidelines implemented by the Board of Governors of the Federal Reserve System. The general bank and holding company capital adequacy guidelines are shown in the accompanying table, as are the capital ratios of the Company and the Bank, as of March 31, 2017, and December 31, 2016. In July 2013, the U.S. federal banking authorities issued final rules (the “Basel III Rules”) establishing more stringent regulatory capital requirements for U.S. banking institutions, which went into effect on January 1, 2015. A detailed discussion of the Basel III Rules is included in Part I, Item 1 of the Company’s Form 10-K for the year ended December 31, 2016, under the heading “Supervision and Regulation.” At March 31, 2017, and December 31, 2016, the Company, on a consolidated basis, exceeded the minimum thresholds to be considered “well capitalized” under current regulatory defined capital ratios. Capital levels and industry defined regulatory minimum required levels are as follows: Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio March 31, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 153,585 8.42 % $ 104,883 5.750 % N/A N/A Old Second Bank 227,422 12.46 104,950 5.750 $ 118,639 6.50 % Total capital to risk weighted assets Consolidated 220,859 12.11 168,699 9.250 N/A N/A Old Second Bank 243,158 13.33 168,733 9.250 182,414 10.00 Tier 1 capital to risk weighted assets Consolidated 197,997 10.86 132,180 7.250 N/A N/A Old Second Bank 227,422 12.46 132,328 7.250 146,017 8.00 Tier 1 capital to average assets Consolidated 197,997 8.84 89,591 4.00 N/A N/A Old Second Bank 227,422 10.14 89,713 4.00 112,141 5.00 December 31, 2016 Common equity tier 1 capital to risk weighted assets Consolidated $ 154,537 8.76 % $ 90,411 5.125 % N/A N/A Old Second Bank 221,153 12.53 90,456 5.125 $ 114,724 6.50 % Total capital to risk weighted assets Consolidated 216,768 12.29 152,126 8.625 N/A N/A Old Second Bank 237,305 13.45 152,176 8.625 176,435 10.00 Tier 1 capital to risk weighted assets Consolidated 191,987 10.88 116,904 6.625 N/A N/A Old Second Bank 221,153 12.53 116,930 6.625 141,199 8.00 Tier 1 capital to average assets Consolidated 191,987 8.90 86,287 4.00 N/A N/A Old Second Bank 221,153 10.24 86,388 4.00 107,985 5.00 1 As of March 31, 2017, amounts are shown inclusive of a capital conservation buffer of 1.25%; as compared to December 31, 2016, of 0.625%. 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.” Dividend Restrictions In addition to the above requirements, banking regulations and capital guidelines generally limit the amount of dividends that may be paid by a bank without prior regulatory approval. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s profits, combined with the retained profit of the previous two years, subject to the capital requirements described above. Pursuant to the Basel III rules that came into effect January 1, 2015, the Bank must keep a buffer of 0.625% for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter of minimum capital requirements in order to avoid additional limitations on capital distributions.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Fair Value Measurements	Note 13 – Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy established by the Company also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2: Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company’s own view about the assumptions that market participants would use in pricing an asset or liability. There were no transfers of securities between levels for the three-month period ended March 31, 2017 or March 31, 2016. The Company purchased states and political subdivisions securities of $9.6 million, which were deemed as Level 3 at the end of March 31, 2017. There were no securities purchased deemed as Level 3 for the three-month period ended March 31, 2016. The majority of securities (available-for-sale and held-to-maturity) are valued by external pricing services or dealer market participants and are classified in Level 2 of the fair value hierarchy. Both market and income valuation approaches are utilized. Quarterly, the Company evaluates the methodologies used by the external pricing services or dealer market participants to develop the fair values to determine whether the results of the valuations are representative of an exit price in the Company’s principal markets and an appropriate representation of fair value. The Company uses the following methods and significant assumptions to estimate fair value: · Government-sponsored agency debt securities are primarily priced using available market information through processes such as benchmark spreads, market valuations of like securities, like securities groupings and matrix pricing. · Other government-sponsored agency securities, MBS and some of the actively traded real estate mortgage investment conduits and collateralized mortgage obligations are priced using available market information including benchmark yields, prepayment speeds, spreads, volatility of similar securities and trade date. · State and political subdivisions are largely grouped by characteristics (e.g., geographical data and source of revenue in trade dissemination systems). Because some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. · Auction rate securities are priced using market spreads, cash flows, prepayment speeds, and loss analytics. Therefore, the valuations of auction rate asset-backed securities are considered Level 2 valuations. · Asset-backed collateralized loan obligations were priced using data from a pricing matrix supported by our bond accounting service provider and are therefore considered Level 2 valuations. · Annually every security holding is priced by a pricing service independent of the regular and recurring pricing services used. The independent service provides a measurement to indicate if the price assigned by the regular service is within or outside of a reasonable range. Management reviews this report and applies judgment in adjusting calculations at year end related to securities pricing. · Residential mortgage loans available for sale in the secondary market are carried at fair market value. The fair value of loans held-for-sale is determined using quoted secondary market prices. · Lending related commitments to fund certain residential mortgage loans, e.g., residential mortgage loans with locked interest rates to be sold in the secondary market and forward commitments for the future delivery of mortgage loans to third party investors, as well as forward commitments for future delivery of MBS are considered derivatives. Fair values are estimated based on observable changes in mortgage interest rates including prices for MBS from the date of the commitment and do not typically involve significant judgments by management. · The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income to derive the resultant value. The Company is able to compare the valuation model inputs, such as the discount rate, prepayment speeds, weighted average delinquency and foreclosure/bankruptcy rates to widely available published industry data for reasonableness. · Interest rate swap positions, both assets and liabilities, are based on valuation pricing models using an income approach reflecting readily observable market parameters such as interest rate yield curves. · The fair value of impaired loans with specific allocations of the allowance for loan losses is essentially based on recent real estate appraisals or the fair value of the collateralized asset. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are made in the appraisal process by the appraisers to reflect differences between the available comparable sales and income data. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. · Nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Assets and Liabilities Measured at Fair Value on a Recurring Basis : The tables below present the balance of assets and liabilities at March 31, 2017, and December 31, 2016, respectively, measured by the Company at fair value on a recurring basis: March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 38,558 $ - $ 38,558 States and political subdivisions - 187,842 31,665 219,507 Corporate bonds - 12,540 - 12,540 Collateralized mortgage obligations - 105,480 2,844 108,324 Asset-backed securities - 139,886 - 139,886 Collateralized loan obligations - 92,239 - 92,239 Loans held-for-sale - 3,933 - 3,933 Mortgage servicing rights - - 6,608 6,608 Other assets (Interest rate swap agreements) - 675 - 675 Other assets (Mortgage banking derivatives) - 287 - 287 Total $ - $ 581,440 $ 41,117 $ 622,557 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,520 $ - $ 1,520 Total $ - $ 1,520 $ - $ 1,520 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 41,534 $ - $ 41,534 States and political subdivisions - 46,477 22,226 68,703 Corporate bonds - 10,630 - 10,630 Collateralized mortgage obligations - 167,808 3,119 170,927 Asset-backed securities - 138,407 - 138,407 Collateralized loan obligations - 101,637 - 101,637 Loans held-for-sale - 4,918 - 4,918 Mortgage servicing rights - - 6,489 6,489 Other assets (Interest rate swap agreements) - 673 - 673 Other assets (Mortgage banking derivatives) - 287 - 287 Total $ - $ 512,371 $ 31,834 $ 544,205 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,667 $ - $ 1,667 Total $ - $ 1,667 $ - $ 1,667 The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are as follows: Three Months Ended March 31, 2017 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2017 $ 3,119 $ 22,226 $ 6,489 Total gains or losses Included in earnings (or changes in net assets) 13 - (33) Included in other comprehensive income 16 (8) - Purchases, issuances, sales, and settlements Purchases - 9,561 - Issuances - - 252 Settlements (304) (114) (100) Ending balance March 31, 2017 $ 2,844 $ 31,665 $ 6,608 Three Months Ended March 31, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ 111 $ 5,847 Total gains or losses Included in earnings (or changes in net assets) - (906) Included in other comprehensive income - - Purchases, issuances, sales, and settlements Purchases - - Issuances - 246 Settlements - (135) Ending balance March 31, 2016 $ 111 $ 5,052 The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of March 31, 2017: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,608 Discounted Cash Flow Discount Rate 10.0-37.6% 10.2 % Prepayment Speed 6.5-77.8% 9.4 % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2016: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,489 Discounted Cash Flow Discount Rate 10.0 -17.0% 10.2 % Prepayment Speed 6.5-77.8% 9.6 % In addition to the above, Level 3 fair value measurement included $31.7 million for state and political subdivisions representing various local municipality securities and $2.8 million of collateralized mortgage obligations at March 31,2017. Both of these were classified as securities available-for-sale, and were valued using a discount based on market spreads of similar assets, but the liquidity premium was an unobservable input. The $111,000 on the state and political subdivisions line at March 31, 2016, under level 3 represents a security from a small, local municipality. Given the small dollar amount and size of the municipality involved, this is categorized as Level 3 based on the payment stream received by the Company from the municipality. That payment stream is otherwise an unobservable input. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis: The Company may be required, from time to time, to measure certain other assets at fair value on a nonrecurring basis in accordance with GAAP. These assets consist of impaired loans and OREO. For assets measured at fair value on a nonrecurring basis at March 31, 2017, and December 31, 2016, respectively, the following tables provide the level of valuation assumptions used to determine each valuation and the carrying value of the related assets: March 31, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ - $ - Other real estate owned, net 2 - - 13,481 13,481 Total $ - $ - $ 13,481 $ 13,481 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount and a valuation allowance of $803,000, resulting in a decrease of specific allocations within the allowance for loan losses of $246,000 for the three months ending March 31, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $13.5 million, which is made up of the outstanding balance of $24.7 million, net of a valuation allowance of $9.7 million and participations of $1.6 million, at March 31, 2017. December 31, 2016 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ - $ - Other real estate owned, net 2 - - 11,916 11,916 Total $ - $ - $ 11,916 $ 11,916 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount and a valuation allowance of $1.0 million, resulting in an increase of specific allocations within the allowance for loan losses of $1.0 millio n for the year ending December 31, 2016. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.9 million, which is made up of the outstanding balance of $23.5 million, net of a valuation allowance of $10.0 million and participations of $1.6 million, at December 31, 2016. The Company has estimated the fair values of these assets based primarily on Level 3 inputs. OREO and impaired loans are generally valued using the fair value of collateral provided by third party appraisals. These valuations include assumptions related to cash flow projections, discount rates, and recent comparable sales. The numerical ranges of unobservable inputs for these valuation assumptions are not meaningful.

Fair Values of Financial Instru

Fair Values of Financial Instruments	3 Months Ended
	Mar. 31, 2017
Fair Values of Financial Instruments
Fair Values of Financial Instruments	Note 14 – Fair Values of Financial Instruments The estimated fair values approximate carrying amount for all items except those described in the following table. Securities available-for-sale fair values are based upon market prices or dealer quotes, and if no such information is available, on the rate and term of the security. The carrying value of FHLBC stock approximates fair value as the stock is nonmarketable and can only be sold to the FHLBC or another member institution at par. FHLBC stock is carried at cost and considered a Level 2 fair value. Fair values of loans were estimated for portfolios of loans with similar financial characteristics, such as type and fixed or variable interest rate terms. Cash flows were discounted using current rates at which similar loans would be made to borrowers with similar ratings and for similar maturities. The fair value of time deposits is estimated using discounted future cash flows at current rates offered for deposits of similar remaining maturities. The fair values of borrowings were estimated based on interest rates available to the Company for debt with similar terms and remaining maturities. The fair value of off balance sheet volume is not considered material. The carrying amount and estimated fair values of financial instruments were as follows: March 31, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 41,332 $ 41,332 $ 41,332 $ - $ - Interest bearing deposits with financial institutions 19,347 19,347 19,347 - - Securities available-for-sale 611,054 611,054 - 576,545 34,509 FHLBC and FRBC Stock 8,593 8,593 - 8,593 - Loans held-for-sale 3,933 3,933 - 3,933 - Loans, net 1,472,280 1,468,691 - - 1,468,691 Accrued interest receivable 6,898 6,898 - 6,898 - Financial liabilities: Noninterest bearing deposits $ 559,666 $ 559,666 $ 559,666 $ - $ - Interest bearing deposits 1,377,488 1,374,677 - 1,374,677 - Securities sold under repurchase agreements 34,731 34,731 - 34,731 - Other short-term borrowings 85,000 85,000 - 85,000 - Junior subordinated debentures 57,603 55,972 32,889 23,083 - Senior notes 43,982 46,233 - 46,233 - Interest rate swap agreements 845 845 - 845 - Borrowing interest payable 867 867 - 867 - Deposit interest payable 555 555 - 555 - December 31, 2016 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 33,805 $ 33,805 $ 33,805 $ - $ - Interest bearing deposits with financial institutions 13,529 13,529 13,529 - - Securities available-for-sale 531,838 531,838 - 506,493 25,345 FHLBC and FRBC Stock 7,918 7,918 - 7,918 - Loans held-for-sale 4,918 4,918 - 4,918 - Loans, net 1,462,651 1,453,429 - - 1,453,429 Accrued interest receivable 5,928 5,928 - 5,928 - Financial liabilities: Noninterest bearing deposits $ 513,688 $ 513,688 $ 513,688 $ - $ - Interest bearing deposits 1,353,097 1,351,000 - 1,351,000 - Securities sold under repurchase agreements 25,715 25,715 - 25,715 - Other short-term borrowings 70,000 70,000 - 70,000 - Junior subordinated debentures 57,591 55,163 32,404 22,759 - Subordinated debenture 43,998 43,998 - 43,998 - Interest rate swap agreements 994 994 - 994 - Borrowing interest payable 202 202 - 202 - Deposit interest payable 599 599 - 599 -

Financial Instruments with Off-

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions	3 Months Ended
	Mar. 31, 2017
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions	Note 15 – Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions To meet the financing needs of its customers, the Bank, as a subsidiary of the Company, is a party to various financial instruments with off-balance-sheet risk in the normal course of business. These off-balance-sheet financial instruments include commitments to originate and sell loans as well as financial standby, performance standby and commercial letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The Bank’s exposure to credit loss for loan commitments and letters of credit is represented by the dollar amount of those instruments. Management generally uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet instruments. Interest Rate Swap Designated as a Cash Flow Hedge The Company entered into a forward starting interest rate swap on August 18, 2015, with an effective date of June 15, 2017. This transaction had a notional amount totaling $25.8 million as of March 31, 2017, was designated as a cash flow hedge of certain junior subordinated debentures and was determined to be fully effective during the period presented. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swap is recorded in other assets with changes in fair value recorded in other comprehensive income. The amount included in other comprehensive income would be reclassified to current earnings should all or a portion of the hedge no longer be considered effective. The Company expects the hedge to remain fully effective during the remaining term of the swap. The Bank will pay the counterparty a fixed rate and receive a floating rate based on three month LIBOR. Management concluded that it would be advantageous to enter this transaction given that the Company has trust preferred securities that will change from fixed rate to floating rate on June 15, 2017. The cash flow hedge has a maturity date of June 15, 2037. Summary information about the interest rate swap designated as a cash flow hedge is as follows: As of March 31, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (845) (994) Other Interest Rate Swaps The Bank also has interest rate derivative positions to assist with risk management that are not designated as hedging instruments. These derivative positions relate to transactions in which the Bank enters an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. Per contractual requirements with the correspondent financial institution, the Bank had $6.0 million in securities available-for-sale pledged to support interest rate swap activity with two correspondent financial institutions at March 31, 2017. The Bank had $6.2 million in securities pledged to support interest rate swap activity with two correspondent financial institutions at December 31, 2016. In connection with each transaction, the Bank agreed to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Bank agreed to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to convert a variable rate loan to a fixed rate loan and is part of the Company’s interest rate risk management strategy. Because the Bank acts as an intermediary for the client, changes in the fair value of the underlying derivative contracts offset each other and do not generally affect the results of operations. Fair value measurements include an assessment of credit risk related to the client’s ability to perform on their contract position, however, and valuation estimates related to that exposure are discussed in Note 13 above. At March 31, 2017, the notional amount of non-hedging interest rate swaps was $97.2 million with a weighted average maturity of 7.4 years. At December 31, 2016, the notional amount of non-hedging interest rate swaps was $85.8 million with a weighted average maturity of 7.3 years. The Bank offsets derivative assets and liabilities that are subject to a master netting arrangement. The Bank also grants mortgage loan interest rate lock commitments to borrowers, subject to normal loan underwriting standards. The interest rate risk associated with these loan interest rate lock commitments is managed with contracts for future deliveries of loans as well as selling forward mortgage-backed securities contracts. Loan interest rate lock 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 drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Commitments to originate residential mortgage loans held-for-sale and forward commitments to sell residential mortgage loans or forward MBS contracts are considered derivative instruments and changes in the fair value are recorded to mortgage banking revenue. Fair values are estimated based on observable changes in mortgage interest rates including mortgage-backed securities prices from the date of the commitment. The following table presents derivatives not designated as hedging instruments as of March 31, 2017, and periodic changes in the values of the interest rate swaps are reported in other noninterest income. Periodic changes in the value of the forward contracts related to mortgage loan origination are reported in the net gain on sales of mortgage loans. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ 97,151 Other Assets $ 675 Other Liabilities $ 675 Interest rate lock commitments and forward contracts 30,732 Other Assets 287 N/A - Total $ 962 $ 675 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The following table presents derivatives not designated as hedging instruments as of December 31, 2016. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ 85,807 Other Assets $ 673 Other Liabilities $ 673 Interest rate lock commitments and forward contracts 31,980 Other Assets 287 N/A - Total $ 960 $ 673 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The Bank also issues letters of credit, which are conditional commitments that guarantee the performance of a customer to a third party. The credit risk involved and collateral obtained in issuing letters of credit are essentially the same as that involved in extending loan commitments to our customers. In addition to customer related commitments, the Company is responsible for letters of credit commitments that relate to properties held in OREO. The following table represents the Company’s contractual commitments due to letters of credit as of March 31, 2017, and December 31, 2016. The following table is a summary of letter of credit commitments (in thousands): March 31, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 217 $ 4,007 $ 4,224 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 8,086 8,152 83 8,499 8,582 283 12,215 12,498 220 12,672 12,892 Non-borrower: Performance standby 95 422 517 95 524 619 Total letters of credit $ 378 $ 12,637 $ 13,015 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised 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 and services. In August 2015, the FASB issued ASU 2015-14 “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date .” This accounting standards update defers the effective date of ASU 2014-09 for an additional year. ASU 2015-14 will be effective for annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is not permitted. In March 2016, the FASB issued ASU 2016-08 “ Revenue from Contracts with Customers (TOPIC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” and in April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (TOPIC 606): Identifying Performance Obligations and Licensing.” ASU 2016-08 requires the entity to determine if it is acting as a principal with control over the goods or services it is contractually obligated to provide, or an agent with no control over specified goods or services provided by another party to a customer. ASU 2016-10 was issued to further clarify ASU 2014-09 implementation regarding identifying performance obligation materiality, identification of key contract components, and scope. The Company is assessing the impact of ASU 2014-09 and other related ASUs as noted above on its accounting and disclosures within noninterest income, as any interest income impact was not included in the scope of this final ASU pronouncement. In February 2016, the FASB issued ASU No. 2016-02- “ Leases (Topic 842) .” This ASU was issued to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. One key revision from prior guidance was to include operating leases within assets and liabilities recorded; another revision was included which created a new model to follow for sale-leaseback transactions. The impact of this pronouncement will affect lessees primarily, as virtually all of their assets will be recognized on the balance sheet, by recording a right of use asset and lease liability. This pronouncement is effective for fiscal years beginning after December 15, 2018. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures. In March 2016, the FASB issued ASU No. 2016-09 “ Stock Compensation - Improvements to Employee Share-Based Payment Accounting (Topic 718). ” FASB issued this ASU as part of the Simplification Initiative. This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. This standard was adopted by the Company effective January 2017; the adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In June 2016, the FASB issued ASU No. 2016-13 “ Measurement of Credit Losses on Financial Instruments (Topic 326). ” ASU 2016-13 was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date to enhance the decision making process. The new methodology to be used should reflect expected credit losses based on relevant vintage historical information, supported by reasonable forecasts of projected loss given defaults, which will affect the collectability of the reported amounts. This new methodology will also require available-for-sale debt securities to have a credit loss recorded through an allowance rather than write-downs. ASU 2016-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures, and is in the process of accumulating data to support future risk assessments. In March 2017, the FASB issued ASU No. 2017-08 “ Receivables-Nonrefundable Fees and Other Costs – Premium Amortization on Purchased Callable Debt Securities (Subtopic 310-20) .” This ASU was issued to shorten the amortization period for the premium to the earliest call date on debt securities. This premium will now be recorded as a reduction to net interest margin during the shorter yield to call period, as compared to prior practice of amortizing the premium as a reduction to net interest margin over the contractual life of the instrument. This ASU does not change the current method of amortizing any discount over the contractual life of the debt security, and this pronouncement is effective for fiscal years beginning after December 15, 2018, with earlier adoption permitted. The Company is assessing the impact of ASU 2017-08 on its accounting and disclosures, as this pronouncement will reduce net interest income over the period until the security’s call date, as compared to a net interest income reduction for all remaining premium as of the date of call if earlier than the date of maturity.

Securities (Tables)

Securities (Tables)	3 Months Ended
	Mar. 31, 2017
Securities
Schedule of amortized cost and fair value of the securities portfolio and corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss	Gross Gross Amortized Unrealized Unrealized Fair March 31, 2017 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed $ 38,933 $ 17 $ (392) $ 38,558 States and political subdivisions 219,223 856 (572) 219,507 Corporate bonds 12,807 47 (314) 12,540 Collateralized mortgage obligations 110,805 119 (2,600) 108,324 Asset-backed securities 146,103 196 (6,413) 139,886 Collateralized loan obligations 92,564 21 (346) 92,239 Total securities available-for-sale $ 620,435 $ 1,256 $ (10,637) $ 611,054 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2016 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed 42,511 - (977) 41,534 States and political subdivisions 68,718 258 (273) 68,703 Corporate bonds 10,957 9 (336) 10,630 Collateralized mortgage obligations 174,352 374 (3,799) 170,927 Asset-backed securities 146,391 341 (8,325) 138,407 Collateralized loan obligations 102,504 29 (896) 101,637 Total securities available-for-sale $ 545,433 $ 1,011 $ (14,606) $ 531,838
Schedule of fair value, amortized cost and weighted average yield of debt securities by contractual maturity along with securities not due at a single maturity date, primarily mortgage-backed securities (MBS), asset-backed securities, and collateralized loan obligations	Weighted Amortized Average Fair Securities available-for-sale Cost Yield Value Due in one year or less $ 23,410 2.39 % $ 23,483 Due after one year through five years 4,923 3.10 4,912 Due after five years through ten years 18,267 2.98 18,089 Due after ten years 185,430 3.68 185,563 232,030 3.48 232,047 Mortgage-backed and collateralized mortgage obligations 149,738 2.32 146,882 Asset-backed securities 146,103 2.23 139,886 Collateralized loan obligations 92,564 3.90 92,239 Total securities available-for-sale $ 620,435 2.97 % $ 611,054
Schedule of securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position	Less than 12 months 12 months or more March 31, 2017 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies mortgage-backed 10 $ 369 $ 23,831 1 $ 23 $ 890 11 $ 392 $ 24,721 States and political subdivisions 24 572 76,287 - - - 24 572 76,287 Corporate bonds 1 169 4,831 2 145 5,203 3 314 10,034 Collateralized mortgage obligations 13 2,388 88,320 4 212 11,660 17 2,600 99,980 Asset-backed securities 1 266 4,287 15 6,147 125,035 16 6,413 129,322 Collateralized loan obligations 2 4 9,977 8 342 57,306 10 346 67,283 Total securities available-for-sale 51 $ 3,768 $ 207,533 30 $ 6,869 $ 200,094 81 $ 10,637 $ 407,627 Less than 12 months 12 months or more December 31, 2016 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies mortgage-backed 11 $ 957 40,636 1 $ 20 $ 898 12 $ 977 $ 41,534 States and political subdivisions 12 273 35,241 - - - 12 273 35,241 Corporate bonds 1 183 4,817 2 153 5,328 3 336 10,145 Collateralized mortgage obligations 16 3,402 117,752 7 397 18,109 23 3,799 135,861 Asset-backed securities 4 328 17,604 12 7,997 107,112 16 8,325 124,716 Collateralized loan obligations - - - 12 896 81,613 12 896 81,613 Total securities available-for-sale 44 $ 5,143 $ 216,050 34 $ 9,463 $ 213,060 78 $ 14,606 $ 429,110

Loans (Tables)

Loans (Tables)	3 Months Ended
	Mar. 31, 2017
Loans
Schedule of major classifications of loans	March 31, 2017 December 31, 2016 Commercial $ 233,922 $ 228,113 Real estate - commercial 713,358 736,247 Real estate - construction 87,049 64,720 Real estate - residential 373,477 377,851 Consumer 2,913 3,237 Overdraft 190 436 Lease financing receivables 64,607 55,451 Other 11,645 11,537 1,487,161 1,477,592 Net deferred loan costs 860 1,217 Total loans $ 1,488,021 $ 1,478,809
Schedule of aged analysis of past due loans by class of loans	Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and March 31, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ - $ - $ - $ - $ 233,697 $ 225 $ 233,922 $ - Leases 939 - - 939 63,184 484 64,607 Real estate - commercial Owner occupied general purpose 175 - - 175 135,289 659 136,123 - Owner occupied special purpose - - - - 172,647 375 173,022 - Non-owner occupied general purpose - - - - 220,541 1,088 221,629 - Non-owner occupied special purpose - - - - 121,661 - 121,661 - Retail properties - - - - 45,184 1,161 46,345 - Farm 18 - - 18 14,560 - 14,578 - Real estate - construction Homebuilder - - - - 3,226 - 3,226 - Land - - - - 2,900 - 2,900 - Commercial speculative - - - - 27,061 70 27,131 - All other 76 - - 76 53,512 204 53,792 - Real estate - residential Investor 312 - - 312 59,785 749 60,846 - Multifamily - 5,004 - 5,004 87,136 - 92,140 - Owner occupied 1,403 - - 1,403 112,972 5,249 119,624 - Revolving and junior liens 535 162 57 754 98,734 1,379 100,867 57 Consumer 6 - - 6 2,897 10 2,913 - Other 1 - - - - 12,695 - 12,695 - Total $ 3,464 $ 5,166 $ 57 $ 8,687 $ 1,467,681 $ 11,653 $ 1,488,021 $ 57 Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2016 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 57 $ 74 $ - $ 131 $ 227,742 $ 240 $ 228,113 $ - Leases - 286 286 54,799 366 55,451 Real estate - commercial Owner occupied general purpose 758 - - 758 135,599 879 137,236 - Owner occupied special purpose - - - - 177,755 385 178,140 - Non-owner occupied general purpose 667 379 - 1,046 229,315 1,930 232,291 - Non-owner occupied special purpose - - - - 118,052 1,013 119,065 - Retail properties - - - - 53,474 1,179 54,653 - Farm 1,353 - - 1,353 13,509 - 14,862 - Real estate - construction Homebuilder - - - - 3,883 - 3,883 - Land - - - - 3,029 - 3,029 - Commercial speculative - - - - 22,654 74 22,728 - All other 364 - - 364 34,509 207 35,080 - Real estate - residential Investor 237 - - 237 54,924 936 56,097 - Multifamily - - - 96,502 - 96,502 Owner occupied 274 - - 274 116,900 6,452 123,626 - Revolving and junior liens 225 405 - 630 99,374 1,622 101,626 - Consumer 10 36 - 46 3,191 - 3,237 - Other 1 14 - - 14 13,176 - 13,190 - Total $ 3,959 $ 1,180 $ - $ 5,139 $ 1,458,387 $ 15,283 $ 1,478,809 $ - 1 The “Other” class includes overdrafts and net deferred costs.
Schedule of credit quality indicators by class of loans	March 31, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 213,758 $ 18,165 $ 1,999 $ - $ 233,922 Leases 62,505 939 1,163 - 64,607 Real estate - commercial Owner occupied general purpose 132,769 1,910 1,444 - 136,123 Owner occupied special purpose 169,561 3,086 375 - 173,022 Non-owner occupied general purpose 219,883 658 1,088 - 221,629 Non-owner occupied special purpose 117,945 - 3,716 - 121,661 Retail Properties 43,929 1,255 1,161 - 46,345 Farm 12,050 1,213 1,315 - 14,578 Real estate - construction Homebuilder 3,226 - - - 3,226 Land 2,900 - - - 2,900 Commercial speculative 27,061 - 70 - 27,131 All other 53,411 - 381 - 53,792 Real estate - residential Investor 59,938 - 908 - 60,846 Multifamily 87,136 5,004 - - 92,140 Owner occupied 113,133 568 5,923 - 119,624 Revolving and junior liens 98,674 - 2,193 - 100,867 Consumer 2,902 - 11 - 2,913 Other 12,695 - - - 12,695 Total $ 1,433,476 $ 32,798 $ 21,747 $ - $ 1,488,021 December 31, 2016 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 214,028 $ 11,558 $ 2,527 $ - $ 228,113 Leases 53,366 976 1,109 55,451 Real estate - commercial Owner occupied general purpose 135,503 53 1,680 - 137,236 Owner occupied special purpose 172,353 5,402 385 - 178,140 Non-owner occupied general purpose 229,448 913 1,930 - 232,291 Non-owner occupied special purpose 114,293 - 4,772 - 119,065 Retail Properties 52,207 1,267 1,179 - 54,653 Farm 11,840 1,240 1,782 - 14,862 Real estate - construction Homebuilder 3,883 - - - 3,883 Land 3,029 - - - 3,029 Commercial speculative 22,654 - 74 - 22,728 All other 34,696 - 384 - 35,080 Real estate - residential Investor 55,001 - 1,096 - 56,097 Multifamily 96,502 - - - 96,502 Owner occupied 115,831 570 7,225 - 123,626 Revolving and junior liens 99,286 - 2,340 - 101,626 Consumer 3,236 - 1 - 3,237 Other 13,165 25 - - 13,190 Total $ 1,430,321 $ 22,004 $ 26,484 $ - $ 1,478,809 1 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans.
Schedule of impaired loans by class of loan	Three Months Ended As of March 31, 2017 March 31, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 225 $ 376 $ - $ 132 $ - Leases 484 502 - 425 - Commercial real estate Owner occupied general purpose 659 719 - 1,270 - Owner occupied special purpose 375 513 - 380 - Non-owner occupied general purpose 1,146 1,430 - 1,445 1 Non-owner occupied special purpose - - - 506 - Retail properties 1,161 1,221 - 1,170 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 70 80 - 72 - All other 204 220 - 206 - Residential Investor 1,646 2,128 - 1,744 12 Multifamily - - - - - Owner occupied 8,581 9,894 - 9,202 39 Revolving and junior liens 2,410 2,755 - 2,447 9 Consumer 10 10 - 106 - Total impaired loans with no recorded allowance 16,971 19,848 - 19,105 61 With an allowance recorded Commercial - - - - - Leases Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily Owner occupied 803 853 803 803 - Revolving and junior liens - - - - - Consumer - - - - - Total impaired loans with a recorded allowance 803 853 803 926 - Total impaired loans $ 17,774 $ 20,701 $ 803 $ 20,031 $ 61 Impaired loans by class of loans as of December 31, 2016, and for the three months ended March 31, 2016, were as follows: Three Months Ended As of December 31, 2016 March 31, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 67 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,506 22 Owner occupied special purpose 385 518 - 823 - Non-owner occupied general purpose 1,744 2,010 - 1,029 1 Non-owner occupied special purpose 1,013 1,649 - - - Retail properties 1,179 1,235 - - - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 82 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,889 12 Multifamily - - - - - Owner occupied 9,824 11,391 - 10,440 41 Revolving and junior liens 2,484 3,018 - 2,747 2 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 20,219 78 With an allowance recorded Commercial - - - 238 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 56 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 317 - Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 20,536 $ 78
Schedule of TDRs modified during the period by type of modification	TDRs that were modified during the period are as follows: TDR Modifications Three Months Ended March 31, 2017 # of Pre-modification Post-modification contracts recorded investment recorded investment Troubled debt restructurings Real estate - residential Revolving and junior liens HAMP 2 1 $ 56 $ 56 Other 1 3 188 187 Total 4 $ 244 $ 243 TDR Modifications Three Months Ended March 31, 2016 # of Pre-modification Post-modification contracts recorded investment recorded investment Troubled debt restructurings Real estate - commercial Other 1 2 $ 312 $ 232 Real estate - residential Owner occupied HAMP 2 1 $ 239 $ 239 Revolving and junior liens HAMP 2 3 430 403 Total 6 $ 981 $ 874 1 Other: Change of terms from bankruptcy court 2 HAMP: Home Affordable Modification Program

Allowance for Loan Losses (Tabl

Allowance for Loan Losses (Tables)	3 Months Ended
	Mar. 31, 2017
Allowance for Loan Losses
Schedule of changes in the allowance for loan losses by segment of loans based on method of impairment	Changes in the allowance for loan losses by segment of loans based on method of impairment for three months ending March 31, 2017, were as follows: Real Estate Real Estate Real Estate Allowance for loan losses: Commercial Leases Commercial Construction Residential Consumer Other Total Three months ended March 31, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 1 117 274 4 195 100 - 691 Recoveries 2 - 35 18 142 75 2 274 Provision (Release) 42 87 (1,477) 575 417 (44) 400 - Ending balance $ 1,672 $ 603 $ 7,831 $ 978 $ 3,056 $ 764 $ 837 $ 15,741 Ending balance: Individually evaluated for impairment $ - $ - $ - $ - $ 803 $ - $ - $ 803 Ending balance: Collectively evaluated for impairment $ 1,672 $ 603 $ 7,831 $ 978 $ 2,253 $ 764 $ 837 $ 14,938 Loans: Ending balance $ 233,922 $ 64,607 $ 713,358 $ 87,049 $ 373,477 $ 2,913 $ 12,695 $ 1,488,021 Ending balance: Individually evaluated for impairment $ 24 $ 484 $ 3,341 $ 274 $ 13,441 $ 210 $ - $ 17,774 Ending balance: Collectively evaluated for impairment $ 233,898 $ 64,123 $ 710,017 $ 86,775 $ 360,036 $ 2,703 $ 12,695 $ 1,470,247 Changes in the allowance for loan losses by segment of loans based on method of impairment for March 31, 2016, were as follows: Real Estate Real Estate Real Estate Allowance for loan losses: Commercial Leases Commercial Construction Residential Consumer Other Total Three months ended March 31, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 11 13 2 - 266 83 - 375 Recoveries 4 - 83 5 229 71 6 398 Provision (Release) 139 142 (301) (20) 7 (103) 136 - Ending balance $ 2,173 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,075 $ 2,107 $ 16,246 Ending balance: Individually evaluated for impairment $ 68 $ - $ - $ - $ - $ - $ - $ 68 Ending balance: Collectively evaluated for impairment $ 2,105 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,075 $ 2,107 $ 16,178 Loans: Ending balance $ 120,460 $ 30,647 $ 598,943 $ 20,331 $ 351,849 $ 2,663 $ 13,945 $ 1,138,838 Ending balance: Individually evaluated for impairment $ 536 $ - $ 4,592 $ 81 $ 14,976 $ - $ - $ 20,185 Ending balance: Collectively evaluated for impairment $ 119,924 $ 30,647 $ 594,351 $ 20,250 $ 336,873 $ 2,663 $ 13,945 $ 1,118,653

Other Real Estate Owned (Tables

Other Real Estate Owned (Tables)	3 Months Ended
	Mar. 31, 2017
Other Real Estate Owned
Schedule of activity in the other real estate owned (OREO) portfolio, net of valuation reserve	Three Months Ended March 31, Other real estate owned 2017 2016 Balance at beginning of period $ 11,916 $ 19,141 Property additions 3,416 382 Property improvements - 12 Less: Proceeds from property disposals, net of gains/losses 1,533 1,339 Period valuation adjustments 318 451 Balance at end of period $ 13,481 $ 17,745
Schedule of activity in valuation allowance	Three Months Ended March 31, 2017 2016 Balance at beginning of period $ 9,982 $ 14,127 Provision for unrealized losses 318 451 Reductions taken on sales (641) (179) Balance at end of period $ 9,659 $ 14,399
Schedule of expenses related to foreclosed assets, net of lease revenue	Three Months Ended March 31, 2017 2016 Gain on sales, net $ (74) $ (42) Provision for unrealized losses 318 451 Operating expenses 523 436 Less: Lease revenue 58 107 Net OREO expense $ 709 $ 738

Deposits (Tables)

Deposits (Tables)	3 Months Ended
	Mar. 31, 2017
Deposits
Schedule of major classifications of deposits	March 31, 2017 December 31, 2016 Noninterest bearing demand $ 559,666 $ 513,688 Savings 266,007 256,159 NOW accounts 439,276 419,417 Money market accounts 286,417 275,273 Certificates of deposit of less than $100,000 222,754 228,993 Certificates of deposit of $100,000 through $250,000 105,728 110,992 Certificates of deposit of more than $250,000 57,306 62,263 Total deposits $ 1,937,154 $ 1,866,785

Borrowings (Tables)

Borrowings (Tables)	3 Months Ended
	Mar. 31, 2017
Borrowings
Summary of borrowings and junior subordinated debentures	March 31, 2017 December 31, 2016 Securities sold under repurchase agreements $ 34,731 $ 25,715 FHLBC advances 1 85,000 70,000 Junior subordinated debentures 57,603 57,591 Senior notes 43,982 43,998 Total borrowings $ 221,316 $ 197,304

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	3 Months Ended
	Mar. 31, 2017
Equity Compensation Plans
Summary of stock option activity in Incentive Plan	A summary of stock option activity in the Plans for the three months ending March 31, 2017, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding 94,500 $ 25.82 Canceled - - Expired - - Exercised - - Ending outstanding 94,500 $ 25.82 0.8 Exercisable at end of period 94,500 $ 25.82 0.8
Summary of changes in nonvested shares of restricted share rights	March 31, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 125,500 10.85 Vested (35,500) 5.47 Forfeited (1,000) 5.38 Nonvested at March 31 498,000 $ 7.18

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share
Schedule of Earnings Per Share	Three Months Ended March 31, 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,560,521 29,483,429 Net income available to common stockholders $ 4,572 $ 3,322 Basic earnings per share $ 0.15 $ 0.11 Diluted earnings per share: Weighted-average common shares outstanding 29,560,521 29,483,429 Dilutive effect of nonvested restricted awards 1 378,112 322,341 Dilutive effect of stock options 2,317 - Diluted average common shares outstanding 29,940,950 29,805,770 Net earnings available to common stockholders $ 4,572 $ 3,322 Diluted earnings per share $ 0.15 $ 0.11 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 977,839 1 Includes the common stock equivalents for restricted share rights that are dilutive.

Regulatory & Capital Matters (T

Regulatory & Capital Matters (Tables)	3 Months Ended
	Mar. 31, 2017
Regulatory & Capital Matters
Schedule of capital levels and industry defined regulatory minimum required levels	Capital levels and industry defined regulatory minimum required levels are as follows: Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio March 31, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 153,585 8.42 % $ 104,883 5.750 % N/A N/A Old Second Bank 227,422 12.46 104,950 5.750 $ 118,639 6.50 % Total capital to risk weighted assets Consolidated 220,859 12.11 168,699 9.250 N/A N/A Old Second Bank 243,158 13.33 168,733 9.250 182,414 10.00 Tier 1 capital to risk weighted assets Consolidated 197,997 10.86 132,180 7.250 N/A N/A Old Second Bank 227,422 12.46 132,328 7.250 146,017 8.00 Tier 1 capital to average assets Consolidated 197,997 8.84 89,591 4.00 N/A N/A Old Second Bank 227,422 10.14 89,713 4.00 112,141 5.00 December 31, 2016 Common equity tier 1 capital to risk weighted assets Consolidated $ 154,537 8.76 % $ 90,411 5.125 % N/A N/A Old Second Bank 221,153 12.53 90,456 5.125 $ 114,724 6.50 % Total capital to risk weighted assets Consolidated 216,768 12.29 152,126 8.625 N/A N/A Old Second Bank 237,305 13.45 152,176 8.625 176,435 10.00 Tier 1 capital to risk weighted assets Consolidated 191,987 10.88 116,904 6.625 N/A N/A Old Second Bank 221,153 12.53 116,930 6.625 141,199 8.00 Tier 1 capital to average assets Consolidated 191,987 8.90 86,287 4.00 N/A N/A Old Second Bank 221,153 10.24 86,388 4.00 107,985 5.00 1 As of March 31, 2017, amounts are shown inclusive of a capital conservation buffer of 1.25%; as compared to December 31, 2016, of 0.625%. 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.”

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis	March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 38,558 $ - $ 38,558 States and political subdivisions - 187,842 31,665 219,507 Corporate bonds - 12,540 - 12,540 Collateralized mortgage obligations - 105,480 2,844 108,324 Asset-backed securities - 139,886 - 139,886 Collateralized loan obligations - 92,239 - 92,239 Loans held-for-sale - 3,933 - 3,933 Mortgage servicing rights - - 6,608 6,608 Other assets (Interest rate swap agreements) - 675 - 675 Other assets (Mortgage banking derivatives) - 287 - 287 Total $ - $ 581,440 $ 41,117 $ 622,557 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,520 $ - $ 1,520 Total $ - $ 1,520 $ - $ 1,520 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 41,534 $ - $ 41,534 States and political subdivisions - 46,477 22,226 68,703 Corporate bonds - 10,630 - 10,630 Collateralized mortgage obligations - 167,808 3,119 170,927 Asset-backed securities - 138,407 - 138,407 Collateralized loan obligations - 101,637 - 101,637 Loans held-for-sale - 4,918 - 4,918 Mortgage servicing rights - - 6,489 6,489 Other assets (Interest rate swap agreements) - 673 - 673 Other assets (Mortgage banking derivatives) - 287 - 287 Total $ - $ 512,371 $ 31,834 $ 544,205 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,667 $ - $ 1,667 Total $ - $ 1,667 $ - $ 1,667
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis	Three Months Ended March 31, 2017 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2017 $ 3,119 $ 22,226 $ 6,489 Total gains or losses Included in earnings (or changes in net assets) 13 - (33) Included in other comprehensive income 16 (8) - Purchases, issuances, sales, and settlements Purchases - 9,561 - Issuances - - 252 Settlements (304) (114) (100) Ending balance March 31, 2017 $ 2,844 $ 31,665 $ 6,608 Three Months Ended March 31, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ 111 $ 5,847 Total gains or losses Included in earnings (or changes in net assets) - (906) Included in other comprehensive income - - Purchases, issuances, sales, and settlements Purchases - - Issuances - 246 Settlements - (135) Ending balance March 31, 2016 $ 111 $ 5,052
Schedule of quantitative information about level 3 fair value measurements	The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of March 31, 2017: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,608 Discounted Cash Flow Discount Rate 10.0-37.6% 10.2 % Prepayment Speed 6.5-77.8% 9.4 % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2016: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,489 Discounted Cash Flow Discount Rate 10.0 -17.0% 10.2 % Prepayment Speed 6.5-77.8% 9.6 % In addition to the above, Level 3 fair value measurement included $31.7 million for state and political subdivisions representing various local municipality securities and $2.8 million of collateralized mortgage obligations at March 31,2017. Both of these were classified as securities available-for-sale, and were valued using a discount based on market spreads of similar assets, but the liquidity premium was an unobservable input. The $111,000 on the state and political subdivisions line at March 31, 2016, under level 3 represents a security from a small, local municipality. Given the small dollar amount and size of the municipality involved, this is categorized as Level 3 based on the payment stream received by the Company from the municipality. That payment stream is otherwise an unobservable input.
Schedule of assets measured at fair value on a nonrecurring basis	March 31, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ - $ - Other real estate owned, net 2 - - 13,481 13,481 Total $ - $ - $ 13,481 $ 13,481 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount and a valuation allowance of $803,000, resulting in a decrease of specific allocations within the allowance for loan losses of $246,000 for the three months ending March 31, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $13.5 million, which is made up of the outstanding balance of $24.7 million, net of a valuation allowance of $9.7 million and participations of $1.6 million, at March 31, 2017. December 31, 2016 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ - $ - Other real estate owned, net 2 - - 11,916 11,916 Total $ - $ - $ 11,916 $ 11,916 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount and a valuation allowance of $1.0 million, resulting in an increase of specific allocations within the allowance for loan losses of $1.0 millio n for the year ending December 31, 2016. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.9 million, which is made up of the outstanding balance of $23.5 million, net of a valuation allowance of $10.0 million and participations of $1.6 million, at December 31, 2016.

Fair Values of Financial Inst34

Fair Values of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Values of Financial Instruments
Schedule of carrying amount and estimated fair values of financial instruments	March 31, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 41,332 $ 41,332 $ 41,332 $ - $ - Interest bearing deposits with financial institutions 19,347 19,347 19,347 - - Securities available-for-sale 611,054 611,054 - 576,545 34,509 FHLBC and FRBC Stock 8,593 8,593 - 8,593 - Loans held-for-sale 3,933 3,933 - 3,933 - Loans, net 1,472,280 1,468,691 - - 1,468,691 Accrued interest receivable 6,898 6,898 - 6,898 - Financial liabilities: Noninterest bearing deposits $ 559,666 $ 559,666 $ 559,666 $ - $ - Interest bearing deposits 1,377,488 1,374,677 - 1,374,677 - Securities sold under repurchase agreements 34,731 34,731 - 34,731 - Other short-term borrowings 85,000 85,000 - 85,000 - Junior subordinated debentures 57,603 55,972 32,889 23,083 - Senior notes 43,982 46,233 - 46,233 - Interest rate swap agreements 845 845 - 845 - Borrowing interest payable 867 867 - 867 - Deposit interest payable 555 555 - 555 - December 31, 2016 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 33,805 $ 33,805 $ 33,805 $ - $ - Interest bearing deposits with financial institutions 13,529 13,529 13,529 - - Securities available-for-sale 531,838 531,838 - 506,493 25,345 FHLBC and FRBC Stock 7,918 7,918 - 7,918 - Loans held-for-sale 4,918 4,918 - 4,918 - Loans, net 1,462,651 1,453,429 - - 1,453,429 Accrued interest receivable 5,928 5,928 - 5,928 - Financial liabilities: Noninterest bearing deposits $ 513,688 $ 513,688 $ 513,688 $ - $ - Interest bearing deposits 1,353,097 1,351,000 - 1,351,000 - Securities sold under repurchase agreements 25,715 25,715 - 25,715 - Other short-term borrowings 70,000 70,000 - 70,000 - Junior subordinated debentures 57,591 55,163 32,404 22,759 - Subordinated debenture 43,998 43,998 - 43,998 - Interest rate swap agreements 994 994 - 994 - Borrowing interest payable 202 202 - 202 - Deposit interest payable 599 599 - 599 -

Financial Instruments with Of35

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions (Tables)	3 Months Ended
	Mar. 31, 2017
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Summary information about the interest rate swap designated as a cash flow hedge	Summary information about the interest rate swap designated as a cash flow hedge is as follows: As of March 31, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (845) (994)
Schedule of derivatives not designated as hedging instruments	Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ 97,151 Other Assets $ 675 Other Liabilities $ 675 Interest rate lock commitments and forward contracts 30,732 Other Assets 287 N/A - Total $ 962 $ 675 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The following table presents derivatives not designated as hedging instruments as of December 31, 2016. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ 85,807 Other Assets $ 673 Other Liabilities $ 673 Interest rate lock commitments and forward contracts 31,980 Other Assets 287 N/A - Total $ 960 $ 673 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts.
Schedule of financial instrument commitments	March 31, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 217 $ 4,007 $ 4,224 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 8,086 8,152 83 8,499 8,582 283 12,215 12,498 220 12,672 12,892 Non-borrower: Performance standby 95 422 517 95 524 619 Total letters of credit $ 378 $ 12,637 $ 13,015 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Dividend (Details)	Apr. 18, 2017$ / shares
Summary of Significant Accounting Policies
Dividends Payable, Amount Per Share	$ 0.01

Acquisitions (Details)

Acquisitions (Details) - Talmer $ in Millions	Oct. 28, 2016USD ($)
Business Acquisition [Line Items]
Assets	$ 230.9
Deposits	48.9
Assets qcquired:
Loans	221
Goodwill	8.4
Net cash paid	$ 181.5

Securities - Investment Portfol

Securities - Investment Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Securities
Available-for-sale Securities	$ 611,054	$ 531,838
FHLB and FRB Stock
FHLBC stock	3,800	3,100
FRB stock	$ 4,800	$ 4,800

Securities - Amortized Cost and

Securities - Amortized Cost and Fair Value (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)
Securities Available-for-Sale
Amortized Cost	$ 620,435		$ 545,433
Gross Unrealized Gains	1,256		1,011
Gross Unrealized Losses	(10,637)		(14,606)
Fair Value	611,054		531,838
Other disclosures
Purchases	154,653	$ 88,005
Sales	64,388	$ 35,574
U.S. government agencies
Securities Available-for-Sale
Amortized Cost			42,511
Gross Unrealized Losses			(977)
Fair Value			41,534
States and political subdivisions
Securities Available-for-Sale
Amortized Cost	219,223		68,718
Gross Unrealized Gains	856		258
Gross Unrealized Losses	(572)		(273)
Fair Value	219,507		68,703
Corporate bonds
Securities Available-for-Sale
Amortized Cost	12,807		10,957
Gross Unrealized Gains	47		9
Gross Unrealized Losses	(314)		(336)
Fair Value	12,540		10,630
Collateralized mortgage obligations
Securities Available-for-Sale
Amortized Cost	110,805		174,352
Gross Unrealized Gains	119		374
Gross Unrealized Losses	(2,600)		(3,799)
Fair Value	108,324		170,927
Asset-backed securities
Securities Available-for-Sale
Amortized Cost	146,103		146,391
Gross Unrealized Gains	196		341
Gross Unrealized Losses	(6,413)		(8,325)
Fair Value	139,886		138,407
FFEL
Other disclosures
Asset-backed securities	$ 119,000
Percentage of outstanding principal amount of loans guaranteed by US Department of Education	97
Total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal	$ 13,000
Percentage of total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal	10.01
Collateralized loan obligations
Securities Available-for-Sale
Amortized Cost	$ 92,564		102,504
Gross Unrealized Gains	21		29
Gross Unrealized Losses	(346)		(896)
Fair Value	92,239		$ 101,637
U.S. government agency mortgage-backed
Securities Available-for-Sale
Amortized Cost	38,933
Gross Unrealized Gains	17
Gross Unrealized Losses	(392)
Fair Value	$ 38,558

Securities - Contractural Matur

Securities - Contractural Maturities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Securities Available-for-Sale, Amortized Cost
Due in one year or less	$ 23,410
Due after one year through five years	4,923
Due after five years through ten years	18,267
Due after ten years	185,430
Debt securities excluding securities not due at a single maturity date	232,030
Total	$ 620,435	$ 545,433
Securities Available-for-Sale, Weighted Average Yield
Due in one year or less (as a percent)	2.39%
Due after one year through five years (as a percent)	3.10%
Due after five years through ten years (as a percent)	2.98%
Due after ten years (as a percent)	3.68%
Debt securities (as a percent)	3.48%
Total (as a percent)	2.97%
Securities Available-for-Sale, Fair Value
Due in one year or less	$ 23,483
Due after one year through five years	4,912
Due after five years through ten years	18,089
Due after ten years	185,563
Debt securities	232,047
Fair Value	611,054	531,838
Collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Total	110,805	174,352
Securities Available-for-Sale, Fair Value
Fair Value	108,324	170,927
Asset-backed securities
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	146,103
Total	$ 146,103	146,391
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.23%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 139,886
Fair Value	139,886	138,407
Collateralized loan obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	92,564
Total	$ 92,564	102,504
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	3.90%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 92,239
Fair Value	92,239	$ 101,637
Mortgage-backed and collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 149,738
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.32%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 146,882

Securities - Unrealized Loss Po

Securities - Unrealized Loss Positions (Details) $ in Thousands	Mar. 31, 2017USD ($)security	Dec. 31, 2016USD ($)security
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	51	44
Greater than 12 months in an unrealized loss position | security	30	34
Total | security	81	78
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 3,768	$ 5,143
Greater than 12 months in an unrealized loss position	6,869	9,463
Total	10,637	14,606
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	207,533	216,050
Greater than 12 months in an unrealized loss position	200,094	213,060
Total	$ 407,627	$ 429,110
U.S. government agencies
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security		11
Greater than 12 months in an unrealized loss position | security		1
Total | security		12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position		$ 957
Greater than 12 months in an unrealized loss position		20
Total		977
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position		40,636
Greater than 12 months in an unrealized loss position		898
Total		$ 41,534
U.S. government agency mortgage-backed
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	10
Greater than 12 months in an unrealized loss position | security	1
Total | security	11
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 369
Greater than 12 months in an unrealized loss position	23
Total	392
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	23,831
Greater than 12 months in an unrealized loss position	890
Total	$ 24,721
States and political subdivisions
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	24	12
Total | security	24	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 572	$ 273
Total	572	273
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	76,287	35,241
Total	$ 76,287	$ 35,241
Corporate bonds
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	1	1
Greater than 12 months in an unrealized loss position | security	2	2
Total | security	3	3
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 169	$ 183
Greater than 12 months in an unrealized loss position	145	153
Total	314	336
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	4,831	4,817
Greater than 12 months in an unrealized loss position	5,203	5,328
Total	$ 10,034	$ 10,145
Collateralized mortgage obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	13	16
Greater than 12 months in an unrealized loss position | security	4	7
Total | security	17	23
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 2,388	$ 3,402
Greater than 12 months in an unrealized loss position	212	397
Total	2,600	3,799
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	88,320	117,752
Greater than 12 months in an unrealized loss position	11,660	18,109
Total	$ 99,980	$ 135,861
Asset-backed securities
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	1	4
Greater than 12 months in an unrealized loss position | security	15	12
Total | security	16	16
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 266	$ 328
Greater than 12 months in an unrealized loss position	6,147	7,997
Total	6,413	8,325
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	4,287	17,604
Greater than 12 months in an unrealized loss position	125,035	107,112
Total	$ 129,322	$ 124,716
Collateralized loan obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	2
Greater than 12 months in an unrealized loss position | security	8	12
Total | security	10	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 4
Greater than 12 months in an unrealized loss position	342	$ 896
Total	346	896
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	9,977
Greater than 12 months in an unrealized loss position	57,306	81,613
Total	$ 67,283	$ 81,613

Loans - Major Classifications (

Loans - Major Classifications (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Loans
Total loans, gross	$ 1,487,161	$ 1,477,592
Net deferred loan fees	860	1,217
Total Loans	1,488,021	1,478,809	$ 1,138,838
Overdraft
Loans
Total loans, gross	190	436
Other
Loans
Total loans, gross	11,645	11,537
Commercial
Loans
Total loans, gross	233,922	228,113
Total Loans	233,922	228,113	120,460
Real estate - commercial
Loans
Total loans, gross	713,358	736,247
Total Loans	713,358		598,943
Real estate - commercial | Construction Loans
Loans
Total loans, gross	87,049	64,720
Total Loans	87,049		20,331
Real estate - residential
Loans
Total loans, gross	373,477	377,851
Total Loans	373,477		351,849
Consumer
Loans
Total loans, gross	2,913	3,237
Total Loans	2,913	3,237	2,663
Lease financing receivables
Loans
Total loans, gross	64,607	55,451
Total Loans	$ 64,607	$ 55,451	$ 30,647

Loans - Major Classifications -

Loans - Major Classifications - Loan Concentrations (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Oct. 28, 2016
Total real estate | Customer concentration risk
Loans
Loans receivable as a percentage of total portfolio		79.70%
Total real estate | Loan receivables | Customer concentration risk
Loans
Loans receivable as a percentage of total portfolio	78.90%
Talmer
Loans
Loans			$ 221

Loans - Aging Analysis (Details

Loans - Aging Analysis (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Aged analysis of past due loans
Total Past Due	$ 8,687	$ 5,139
Current	1,467,681	1,458,387
Nonaccrual	11,653	15,283
Total Loans	1,488,021	1,478,809	$ 1,138,838
Recorded Investment 90 days or Greater Past Due and Accruing	57
30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	3,464	3,959
60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	5,166	1,180
90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	57
Multifamily
Aged analysis of past due loans
Total Past Due	5,004
Current	87,136	96,502
Total Loans	92,140	96,502
Multifamily | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	5,004
Commercial
Aged analysis of past due loans
Total Past Due		131
Current	233,697	227,742
Nonaccrual	225	240
Total Loans	233,922	228,113	120,460
Commercial | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		57
Commercial | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		74
Lease financing receivables
Aged analysis of past due loans
Total Past Due	939	286
Current	63,184	54,799
Nonaccrual	484	366
Total Loans	64,607	55,451	30,647
Lease financing receivables | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	939
Lease financing receivables | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		286
Real estate - commercial
Aged analysis of past due loans
Total Loans	713,358		598,943
Real estate - commercial | Owner occupied general purpose
Aged analysis of past due loans
Total Past Due	175	758
Current	135,289	135,599
Nonaccrual	659	879
Total Loans	136,123	137,236
Real estate - commercial | Owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	175	758
Real estate - commercial | Owner occupied special purpose
Aged analysis of past due loans
Current	172,647	177,755
Nonaccrual	375	385
Total Loans	173,022	178,140
Real estate - commercial | Non-owner occupied general purpose
Aged analysis of past due loans
Total Past Due		1,046
Current	220,541	229,315
Nonaccrual	1,088	1,930
Total Loans	221,629	232,291
Real estate - commercial | Non-owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		667
Real estate - commercial | Non-owner occupied general purpose | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		379
Real estate - commercial | Non-owner occupied special purpose
Aged analysis of past due loans
Current	121,661	118,052
Nonaccrual		1,013
Total Loans	121,661	119,065
Real estate - commercial | Retail properties
Aged analysis of past due loans
Current	45,184	53,474
Nonaccrual	1,161	1,179
Total Loans	46,345	54,653
Real estate - commercial | Farm
Aged analysis of past due loans
Total Past Due	18	1,353
Current	14,560	13,509
Total Loans	14,578	14,862
Real estate - commercial | Farm | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	18	1,353
Real estate - residential
Aged analysis of past due loans
Total Loans	373,477		351,849
Real estate - residential | Investor
Aged analysis of past due loans
Total Past Due	312	237
Current	59,785	54,924
Nonaccrual	749	936
Total Loans	60,846	56,097
Real estate - residential | Investor | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	312	237
Real estate - residential | Owner occupied
Aged analysis of past due loans
Total Past Due	1,403	274
Current	112,972	116,900
Nonaccrual	5,249	6,452
Total Loans	119,624	123,626
Real estate - residential | Owner occupied | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	1,403	274
Real estate - residential | Revolving and junior liens
Aged analysis of past due loans
Total Past Due	754	630
Current	98,734	99,374
Nonaccrual	1,379	1,622
Total Loans	100,867	101,626
Recorded Investment 90 days or Greater Past Due and Accruing	57
Real estate - residential | Revolving and junior liens | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	535	225
Real estate - residential | Revolving and junior liens | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	162	405
Real estate - residential | Revolving and junior liens | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	57
Consumer
Aged analysis of past due loans
Total Past Due	6	46
Current	2,897	3,191
Nonaccrual	10
Total Loans	2,913	3,237	2,663
Consumer | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	6	10
Consumer | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		36
All other
Aged analysis of past due loans
Total Past Due		14
Current	12,695	13,176
Total Loans	12,695	13,190	13,945
All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		14
Construction Loans | Real estate - commercial
Aged analysis of past due loans
Total Loans	87,049		$ 20,331
Construction Loans | Real estate - commercial | Homebuilder
Aged analysis of past due loans
Current	3,226	3,883
Total Loans	3,226	3,883
Construction Loans | Real estate - commercial | Land
Aged analysis of past due loans
Current	2,900	3,029
Total Loans	2,900	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Aged analysis of past due loans
Current	27,061	22,654
Nonaccrual	70	74
Total Loans	27,131	22,728
Construction Loans | Real estate - commercial | All other
Aged analysis of past due loans
Total Past Due	76	364
Current	53,512	34,509
Nonaccrual	204	207
Total Loans	53,792	35,080
Construction Loans | Real estate - commercial | All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	$ 76	$ 364

Loans - Inclusion (Details)

Loans - Inclusion (Details)	3 Months Ended
	Mar. 31, 2017USD ($)
Minimum
Loans by risk rating
Loan commitment for inclusion in credit quality analysis	$ 50,000

Loans - Credit Quality (Details

Loans - Credit Quality (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Loans by risk rating
Total Loans	$ 1,488,021	$ 1,478,809	$ 1,138,838
Multifamily
Loans by risk rating
Total Loans	92,140	96,502
Commercial
Loans by risk rating
Total Loans	233,922	228,113	120,460
Lease financing receivables
Loans by risk rating
Total Loans	64,607	55,451	30,647
Real estate - commercial
Loans by risk rating
Total Loans	713,358		598,943
Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	136,123	137,236
Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	173,022	178,140
Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	221,629	232,291
Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	121,661	119,065
Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	46,345	54,653
Real estate - commercial | Farm
Loans by risk rating
Total Loans	14,578	14,862
Real estate - residential
Loans by risk rating
Total Loans	373,477		351,849
Real estate - residential | Investor
Loans by risk rating
Total Loans	60,846	56,097
Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	119,624	123,626
Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	100,867	101,626
Consumer
Loans by risk rating
Total Loans	2,913	3,237	2,663
All other
Loans by risk rating
Total Loans	12,695	13,190	13,945
Pass
Loans by risk rating
Total Loans	1,433,476	1,430,321
Pass | Multifamily
Loans by risk rating
Total Loans	87,136	96,502
Pass | Commercial
Loans by risk rating
Total Loans	213,758	214,028
Pass | Lease financing receivables
Loans by risk rating
Total Loans	62,505	53,366
Pass | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	132,769	135,503
Pass | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	169,561	172,353
Pass | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	219,883	229,448
Pass | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	117,945	114,293
Pass | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	43,929	52,207
Pass | Real estate - commercial | Farm
Loans by risk rating
Total Loans	12,050	11,840
Pass | Real estate - residential | Investor
Loans by risk rating
Total Loans	59,938	55,001
Pass | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	113,133	115,831
Pass | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	98,674	99,286
Pass | Consumer
Loans by risk rating
Total Loans	2,902	3,236
Pass | All other
Loans by risk rating
Total Loans	12,695	13,165
Special Mention
Loans by risk rating
Total Loans	32,798	22,004
Special Mention | Multifamily
Loans by risk rating
Total Loans	5,004
Special Mention | Commercial
Loans by risk rating
Total Loans	18,165	11,558
Special Mention | Lease financing receivables
Loans by risk rating
Total Loans	939	976
Special Mention | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	1,910	53
Special Mention | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	3,086	5,402
Special Mention | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	658	913
Special Mention | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,255	1,267
Special Mention | Real estate - commercial | Farm
Loans by risk rating
Total Loans	1,213	1,240
Special Mention | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	568	570
Special Mention | All other
Loans by risk rating
Total Loans		25
Substandard
Loans by risk rating
Total Loans	21,747	26,484
Substandard | Commercial
Loans by risk rating
Total Loans	1,999	2,527
Substandard | Lease financing receivables
Loans by risk rating
Total Loans	1,163	1,109
Substandard | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	1,444	1,680
Substandard | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	375	385
Substandard | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	1,088	1,930
Substandard | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	3,716	4,772
Substandard | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,161	1,179
Substandard | Real estate - commercial | Farm
Loans by risk rating
Total Loans	1,315	1,782
Substandard | Real estate - residential | Investor
Loans by risk rating
Total Loans	908	1,096
Substandard | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	5,923	7,225
Substandard | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	2,193	2,340
Substandard | Consumer
Loans by risk rating
Total Loans	11	1
Construction Loans | Real estate - commercial
Loans by risk rating
Total Loans	87,049		$ 20,331
Construction Loans | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	3,226	3,883
Construction Loans | Real estate - commercial | Land
Loans by risk rating
Total Loans	2,900	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	27,131	22,728
Construction Loans | Real estate - commercial | All other
Loans by risk rating
Total Loans	53,792	35,080
Construction Loans | Pass | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	3,226	3,883
Construction Loans | Pass | Real estate - commercial | Land
Loans by risk rating
Total Loans	2,900	3,029
Construction Loans | Pass | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	27,061	22,654
Construction Loans | Pass | Real estate - commercial | All other
Loans by risk rating
Total Loans	53,411	34,696
Construction Loans | Substandard | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	70	74
Construction Loans | Substandard | Real estate - commercial | All other
Loans by risk rating
Total Loans	$ 381	$ 384

Loans - Repossessed Assets (Det

Loans - Repossessed Assets (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Repossessed and foreclosed assets
Other real estate owned	$ 13,481,000	$ 11,916,000	$ 17,745,000	$ 19,141,000
Real estate - residential
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	1,100,000	1,800,000
Other real estate owned	$ 1,300,000	$ 225,000

Loans - Impaired Loans - Record

Loans - Impaired Loans - Recorded Investment, Unpaid Principal Balance and Related Allowance (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Recorded Investment
With no related allowance recorded	$ 16,971	$ 21,238
With an allowance recorded	803	1,049
Total impaired loans	17,774	22,287
Unpaid Principal Balance
With no related allowance recorded	19,848	25,321
With an allowance recorded	853	1,448
Total impaired loans	20,701	26,769
Related Allowance
With an allowance recorded	803	1,049
Commercial
Recorded Investment
With no related allowance recorded	225	240
Unpaid Principal Balance
With no related allowance recorded	376	388
Lease financing receivables
Recorded Investment
With no related allowance recorded	484	366
Unpaid Principal Balance
With no related allowance recorded	502	371
Real estate - commercial | Owner occupied general purpose
Recorded Investment
With no related allowance recorded	659	1,881
Unpaid Principal Balance
With no related allowance recorded	719	2,131
Real estate - commercial | Owner occupied special purpose
Recorded Investment
With no related allowance recorded	375	385
Unpaid Principal Balance
With no related allowance recorded	513	518
Real estate - commercial | Non-owner occupied general purpose
Recorded Investment
With no related allowance recorded	1,146	1,744
With an allowance recorded		246
Unpaid Principal Balance
With no related allowance recorded	1,430	2,010
With an allowance recorded		595
Related Allowance
With an allowance recorded		246
Real estate - commercial | Non-owner occupied special purpose
Recorded Investment
With no related allowance recorded		1,013
Unpaid Principal Balance
With no related allowance recorded		1,649
Real estate - commercial | Retail properties
Recorded Investment
With no related allowance recorded	1,161	1,179
Unpaid Principal Balance
With no related allowance recorded	1,221	1,235
Real estate - residential | Investor
Recorded Investment
With no related allowance recorded	1,646	1,841
Unpaid Principal Balance
With no related allowance recorded	2,128	2,308
Real estate - residential | Owner occupied
Recorded Investment
With no related allowance recorded	8,581	9,824
With an allowance recorded	803	803
Unpaid Principal Balance
With no related allowance recorded	9,894	11,391
With an allowance recorded	853	853
Related Allowance
With an allowance recorded	803	803
Real estate - residential | Revolving and junior liens
Recorded Investment
With no related allowance recorded	2,410	2,484
Unpaid Principal Balance
With no related allowance recorded	2,755	3,018
Consumer
Recorded Investment
With no related allowance recorded	10
Unpaid Principal Balance
With no related allowance recorded	10
Construction Loans | Real estate - commercial | Commercial speculative
Recorded Investment
With no related allowance recorded	70	74
Unpaid Principal Balance
With no related allowance recorded	80	81
Construction Loans | Real estate - commercial | All other
Recorded Investment
With no related allowance recorded	204	207
Unpaid Principal Balance
With no related allowance recorded	$ 220	$ 221

Loans - Impaired Loans - Averag

Loans - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Average Recorded Investment
With no related allowance recorded	$ 19,105	$ 20,219
With an allowance recorded	926	317
Total impaired loans	20,031	20,536
Interest Income Recognized
With no related allowance recorded	61	78
Total impaired loans	61	78
Commercial
Average Recorded Investment
With no related allowance recorded	132	67
With an allowance recorded		238
Lease financing receivables
Average Recorded Investment
With no related allowance recorded	425
Real estate - commercial | Owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,270	2,506
Interest Income Recognized
With no related allowance recorded		22
Real estate - commercial | Owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	380	823
Real estate - commercial | Non-owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,445	1,029
With an allowance recorded	123
Interest Income Recognized
With no related allowance recorded	1	1
Real estate - commercial | Non-owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	506
Real estate - commercial | Retail properties
Average Recorded Investment
With no related allowance recorded	1,170
Real estate - commercial | Farm
Average Recorded Investment
With no related allowance recorded		636
Real estate - residential | Investor
Average Recorded Investment
With no related allowance recorded	1,744	1,889
Interest Income Recognized
With no related allowance recorded	12	12
Real estate - residential | Owner occupied
Average Recorded Investment
With no related allowance recorded	9,202	10,440
With an allowance recorded	803	56
Interest Income Recognized
With no related allowance recorded	39	41
Real estate - residential | Revolving and junior liens
Average Recorded Investment
With no related allowance recorded	2,447	2,747
With an allowance recorded		23
Interest Income Recognized
With no related allowance recorded	9	2
Consumer
Average Recorded Investment
With no related allowance recorded	106
Construction Loans | Real estate - commercial | Commercial speculative
Average Recorded Investment
With no related allowance recorded	72	$ 82
Construction Loans | Real estate - commercial | All other
Average Recorded Investment
With no related allowance recorded	$ 206

Loans - TDR (Details)

Loans - TDR (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)contract	Mar. 31, 2016USD ($)contract	Dec. 31, 2016USD ($)
Troubled debt restructurings - modified during the period
# of contracts | contract	4	6
Pre-modification recorded investment	$ 244	$ 981
Post-modification recorded investment	243	$ 874
Other information
Total Past Due	$ 8,687		$ 5,139
Other
Troubled debt restructurings - modified during the period
# of contracts | contract	3
Pre-modification recorded investment	$ 188
Post-modification recorded investment	187
HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract		3
Pre-modification recorded investment		$ 430
Post-modification recorded investment		$ 403
Real estate - commercial | Other
Troubled debt restructurings - modified during the period
# of contracts | contract		2
Pre-modification recorded investment		$ 312
Post-modification recorded investment		$ 232
Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	175		758
Real estate - commercial | Non-owner occupied general purpose
Other information
Total Past Due			1,046
Real estate - residential | Investor
Other information
Total Past Due	312		237
Real estate - residential | Owner occupied
Other information
Total Past Due	1,403		274
Real estate - residential | Owner occupied | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract		1
Pre-modification recorded investment		$ 239
Post-modification recorded investment		$ 239
Real estate - residential | Revolving and junior liens
Other information
Total Past Due	$ 754		630
Real estate - residential | Revolving and junior liens | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract	1
Pre-modification recorded investment	$ 56
Post-modification recorded investment	56
Commercial
Other information
Total Past Due			$ 131
90 Days or Greater Past Due
Other information
Total Past Due	57
90 Days or Greater Past Due | Real estate - residential | Revolving and junior liens
Other information
Total Past Due	$ 57

Allowance for Loan Losses (Deta

Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Allowance for loan losses:
Beginning Balance	$ 16,158	$ 16,223
Charge-offs	691	375
Recoveries	274	398
Ending Balance	15,741	16,246
Ending balance: Individually evaluated for impairment	803	68
Ending balance: Collectively evaluated for impairment	14,938	16,178
Loans:
Ending balance	1,488,021	1,138,838	$ 1,478,809
Ending balance: Individually evaluated for impairment	17,774	20,185
Ending balance: Collectively evaluated for impairment	1,470,247	1,118,653
Commercial
Allowance for loan losses:
Beginning Balance	1,629	2,041
Charge-offs	1	11
Recoveries	2	4
Provision (release)	42	139
Ending Balance	1,672	2,173
Ending balance: Individually evaluated for impairment		68
Ending balance: Collectively evaluated for impairment	1,672	2,105
Loans:
Ending balance	233,922	120,460	228,113
Ending balance: Individually evaluated for impairment	24	536
Ending balance: Collectively evaluated for impairment	233,898	119,924
Lease financing receivables
Allowance for loan losses:
Beginning Balance	633	55
Charge-offs	117	13
Provision (release)	87	142
Ending Balance	603	184
Ending balance: Collectively evaluated for impairment	603	184
Loans:
Ending balance	64,607	30,647	55,451
Ending balance: Individually evaluated for impairment	484
Ending balance: Collectively evaluated for impairment	64,123	30,647
Real estate - commercial
Allowance for loan losses:
Beginning Balance	9,547	9,013
Charge-offs	274	2
Recoveries	35	83
Provision (release)	(1,477)	(301)
Ending Balance	7,831	8,793
Ending balance: Collectively evaluated for impairment	7,831	8,793
Loans:
Ending balance	713,358	598,943
Ending balance: Individually evaluated for impairment	3,341	4,592
Ending balance: Collectively evaluated for impairment	710,017	594,351
Real estate - residential
Allowance for loan losses:
Beginning Balance	2,692	1,694
Charge-offs	195	266
Recoveries	142	229
Provision (release)	417	7
Ending Balance	3,056	1,664
Ending balance: Individually evaluated for impairment	803
Ending balance: Collectively evaluated for impairment	2,253	1,664
Loans:
Ending balance	373,477	351,849
Ending balance: Individually evaluated for impairment	13,441	14,976
Ending balance: Collectively evaluated for impairment	360,036	336,873
Consumer
Allowance for loan losses:
Beginning Balance	833	1,190
Charge-offs	100	83
Recoveries	75	71
Provision (release)	(44)	(103)
Ending Balance	764	1,075
Ending balance: Collectively evaluated for impairment	764	1,075
Loans:
Ending balance	2,913	2,663	3,237
Ending balance: Individually evaluated for impairment	210
Ending balance: Collectively evaluated for impairment	2,703	2,663
All other
Allowance for loan losses:
Beginning Balance	435	1,965
Recoveries	2	6
Provision (release)	400	136
Ending Balance	837	2,107
Ending balance: Collectively evaluated for impairment	837	2,107
Loans:
Ending balance	12,695	13,945	$ 13,190
Ending balance: Collectively evaluated for impairment	12,695	13,945
Construction Loans | Real estate - commercial
Allowance for loan losses:
Beginning Balance	389	265
Charge-offs	4
Recoveries	18	5
Provision (release)	575	(20)
Ending Balance	978	250
Ending balance: Collectively evaluated for impairment	978	250
Loans:
Ending balance	87,049	20,331
Ending balance: Individually evaluated for impairment	274	81
Ending balance: Collectively evaluated for impairment	$ 86,775	$ 20,250

Other Real Estate Owned (Detail

Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Activity in the other real estate owned (OREO) portfolio, net of valuation reserve
Balance at beginning of period	$ 11,916	$ 19,141
Property additions	3,416	382
Property improvements		12
Less: Property disposals, net of gains/losses	1,533	1,339
Less: Period valuation adjustments	318	451
Balance at end of period	13,481	17,745
Activity in the valuation allowance
Balance at beginning of period	9,982	14,127
Provision for unrealized losses	318	451
Reductions taken on sales	(641)	(179)
Balance at end of period	9,659	14,399
Expenses related to foreclosed assets, net of lease revenue
Gain on sales, net	(74)	(42)
Provision for unrealized losses	318	451
Operating expenses	523	436
Less: Lease revenue	58	107
Expenses related to OREO, net of lease revenue	$ 709	$ 738

Deposits - Components and Matur

Deposits - Components and Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Deposits
Noninterest bearing demand	$ 559,666	$ 513,688
Savings	266,007	256,159
NOW accounts	439,276	419,417
Money market accounts	286,417	275,273
Certificates of deposit of less than $100,000	222,754	228,993
Certificates of deposit of $100,000 up to $250,000	105,728	110,992
Certificates of deposit of $250,000 or more	57,306	62,263
Total deposits	$ 1,937,154	$ 1,866,785

Borrowings - Summary (Details)

Borrowings - Summary (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Borrowings
Total borrowings	$ 221,316	$ 197,304
Securities sold under repurchase agreements
Borrowings
Total borrowings	34,731	25,715
FHLBC advances
Borrowings
Total borrowings	85,000	70,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,603	$ 57,591

Borrowings - Additional informa

Borrowings - Additional information (Details)	3 Months Ended
	Mar. 31, 2017USD ($)item	Dec. 31, 2016USD ($)
Borrowings
Semi annual interest rate		5.75%
Bank owned FHLBC stock	$ 3,800,000	$ 3,100,000
Subordinated Debt.		45,000,000
Senior debt		500,000
Senior notes issuance and cash on hand		45,000,000
Senior notes	43,982,000	$ 43,998,000
Debt Instrument, Term		10 years
Interest rate term		5 years
Senior note debt issuance costs		$ 1,000,000
Total borrowings	221,316,000	$ 197,304,000
Three month LIBOR
Borrowings
Basis points added to reference rate (as a percent)		385.00%
Securities sold under repurchase agreements
Borrowings
Carrying amount of securities secured	34,700,000	$ 25,700,000
Fair value of the pledged collateral	$ 42,400,000	43,000,000
Number of customers having secured balances exceeding specified percentage of stockholders equity | item	0
Total borrowings	$ 34,731,000	25,715,000
Securities sold under repurchase agreements | Minimum
Borrowings
Threshold percentage of stockholders' equity	10.00%
FHLBC advances
Borrowings
Borrowings at FHLBC as percentage of total assets	35.00%
Borrowings at FHLBC as percentage of book value of certain mortgage loans	60.00%
FHLBC advance amount	$ 85,000,000	70,000,000
Bank owned FHLBC stock	3,800,000
Fair value of securities collateralized	91,000,000
Principal balance of loans collateralized	173,400,000
Combined collateral value	159,600,000
Amount available for additional borrowings	38,300,000
Total borrowings	85,000,000	70,000,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,603,000	$ 57,591,000

Junior Subordinated Debentures

Junior Subordinated Debentures - Issuance (Details) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended
	Apr. 30, 2007	Jul. 31, 2003	Jun. 30, 2003	Mar. 31, 2017	Dec. 31, 2016
Junior subordinated debentures
Junior subordinated debentures				$ 57,603	$ 57,591
Old Second Capital Trust I
Junior subordinated debentures
Proceeds from sale of cumulative trust preferred securities		$ 4,100	$ 27,500
Maturity Period				30 years
Cash distribution rate of trust preferred securities (as a percent)				7.80%
Old Second Capital Trust II
Junior subordinated debentures
Proceeds from sale of cumulative trust preferred securities	$ 25,000
Maturity Period				30 years
Old Second Capital Trust II | Debt Instrument, Redemption, Period One [Member]
Junior subordinated debentures
Cash distribution fixed rate of trust preferred securities (as a percent)				6.77%
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member]
Junior subordinated debentures
Basis points added to cash distribution floating rate base (as a percent)				1.50%
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member] | Three month LIBOR
Junior subordinated debentures
Cash distribution, floating rate base				three-month LIBOR
Junior subordinated debentures | Old Second Capital Trust I
Junior subordinated debentures
Junior subordinated debentures				$ 32,600
Junior subordinated debentures | Old Second Capital Trust II
Junior subordinated debentures
Junior subordinated debentures				$ 25,800

Equity Compensation Plans - Opt

Equity Compensation Plans - Options (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Equity Compensation Plans
Total compensation cost	$ 335,000
Stock options
Equity Compensation Plans
Granted (in shares)	0	0
Term of stock options granted	10 years
Total unrecognized compensation cost	$ 0
Shares
Beginning outstanding (in shares)	94,500
Ending outstanding (in shares)	94,500
Exercisable at end of period (in shares)	94,500
Weighted Average Exercise Price
Beginning outstanding (in dollars per share)	$ 25.82
Ending outstanding (in dollars per share)	25.82
Exercisable at end of period (in dollars per share)	$ 25.82
Weighted Average Remaining Contractual Term (years)
Ending outstanding (in years)	9 months 18 days
Exercisable at end of period	9 months 18 days

Equity Compensation Plans - Sum

Equity Compensation Plans - Summary of stock option activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Equity Compensation Plans
Stock based compensation	$ 321	$ 169
2014 Plan
Equity Compensation Plans
Number of shares issuable	431,500

Equity Compensation Plans - Res

Equity Compensation Plans - Restricted Stock and RSUs (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Equity Compensation Plans
Vesting period	3 years
Changes in unvested awards
Nonvested at the beginning of the period (in shares)	409,000
Granted (in shares)	125,500	120,000
Vested (in shares)	(35,500)
Forfeited (in shares)	(1,000)
Nonvested at the end of the period (in shares)	498,000
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 5.89
Granted (in dollars per share)	10.85
Vested (in dollars per share)	5.47
Forfeited (in dollars per share)	5.38
Nonvested at the end of the period (in dollars per share)	$ 7.18
Additional information
Total unrecognized compensation cost of restricted awards	$ 2.2	$ 1.1
Expected weighted-average period for recognition of unrecognized compensation	2 years 4 months 28 days	2 years 3 months 7 days

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Basic earnings per share:
Weighted-average common shares outstanding	29,560,521	29,483,429
Net income	$ 4,572	$ 3,322
Net income available to common stockholders	$ 4,572	$ 3,322
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.11
Diluted earnings per share:
Weighted-average common shares outstanding	29,560,521	29,483,429
Diluted average common shares outstanding	29,940,950	29,805,770
Net earnings available to common stockholders	$ 4,572	$ 3,322
Diluted earnings per share (in dollars per share)	$ 0.15	$ 0.11
One 10 year warrant	2,317
Antidilutive options and warrants
Diluted earnings per share:
One 10 year warrant	900,839	977,839
Warrants
Diluted earnings per share:
One 10 year warrant	815,339	815,339
Warrants, exercise price (in dollars per share)	$ 13.43	$ 13.43
Restricted stock and restricted stock units
Diluted earnings per share:
Dilutive effect of nonvested restricted awards (in shares)	378,112	322,341

Regulatory & Capital Matters (D

Regulatory & Capital Matters (Details)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	8.84%	8.90%
Risk-based capital ratio (as a percent)	12.11%	12.29%
Old Second National Bank
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	10.14%	10.24%
Risk-based capital ratio (as a percent)	13.33%	13.45%
Tier One leverage ratio, basis point increase (as a percent)	0.10%
Risk-based capital ratio, basis point decrease (as a percent)	0.12%
Old Second National Bank | Minimum
Regulatory & Capital Matters
Tier 1 capital leverage ratio, board-designated threshold	8.00%
Total Capital Ratio, board-designated threshold (as a percent)	12.00%

Regulatory & Capital Matters -

Regulatory & Capital Matters - Capital Levels and Industry Defined Regulatory Minimums (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Common equity tier 1 capital to risk weighted assets
Actual	$ 153,585	$ 154,537
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 104,883	$ 90,411
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	8.42%	8.76%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	5.75%	5.125%
Total capital to risk weighted assets, Amount
Actual at period end	$ 220,859	$ 216,768
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 168,699	$ 152,126
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	12.11%	12.29%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	9.25%	8.625%
Tier 1 capital to risk weighted assets, Amount
Actual	$ 197,997	$ 191,987
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 132,180	$ 116,904
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	10.86%	10.88%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	7.25%	6.625%
Tier 1 capital to average assets, Amount
Actual	$ 197,997	$ 191,987
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 89,591	$ 86,287
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	8.84%	8.90%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	4.00%	4.00%
Old Second National Bank
Common equity tier 1 capital to risk weighted assets
Actual	$ 227,422	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	104,950	90,456
Minimum Required to Be Well Capitalized	$ 118,639	$ 114,724
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.46%	12.53%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	5.75%	5.125%
Minimum Required to Be Well Capitalized (as a percent)	6.50%	6.50%
Total capital to risk weighted assets, Amount
Actual at period end	$ 243,158	$ 237,305
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	168,733	152,176
Minimum Required to Be Well Capitalized	$ 182,414	$ 176,435
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	13.33%	13.45%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	9.25%	8.625%
Minimum Required to Be Well Capitalized (as a percent)	10.00%	10.00%
Tier 1 capital to risk weighted assets, Amount
Actual	$ 227,422	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	132,328	116,930
Minimum Required to Be Well Capitalized	$ 146,017	$ 141,199
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.46%	12.53%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	7.25%	6.625%
Minimum Required to Be Well Capitalized (as a percent)	8.00%	8.00%
Tier 1 capital to average assets, Amount
Actual	$ 227,422	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	89,713	86,388
Minimum Required to Be Well Capitalized	$ 112,141	$ 107,985
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	10.14%	10.24%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	4.00%	4.00%
Minimum Required to Be Well Capitalized (as a percent)	5.00%	5.00%

Regulatory & Capital Matters 63

Regulatory & Capital Matters - Dividend Restrictions and Deferrals (Details)	3 Months Ended
	Mar. 31, 2017
Dividend Restrictions and Deferrals
Number of previous years retained profit considered for dividend payment	2 years
Minimum capital requirements, minimum percentage required, 2016	0.625%
Minimum capital requirements, minimum percentage required, 2017	1.25%
Minimum capital requirements, minimum percentage required, 2018	1.875%
Minimum capital requirements, minimum percentage required, 2019 and thereafter	2.50%

Fair Value Measurements - Recur

Fair Value Measurements - Recurring (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Assets and liabilities measured at fair value on a recurring basis
Transfers of securities between levels	$ 0	$ 0
Assets:
Securities available-for-sale	611,054,000		$ 531,838,000
Mortgage servicing rights	6,608,000		6,489,000
U.S. government agencies
Assets:
Securities available-for-sale			41,534,000
U.S. government agency mortgage-backed
Assets:
Securities available-for-sale	38,558,000
States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Purchases	9,561,000
Assets:
Securities available-for-sale	219,507,000		68,703,000
Corporate bonds
Assets:
Securities available-for-sale	12,540,000		10,630,000
Collateralized mortgage obligations
Assets:
Securities available-for-sale	108,324,000		170,927,000
Asset-backed securities
Assets:
Securities available-for-sale	139,886,000		138,407,000
Collateralized loan obligations
Assets:
Securities available-for-sale	92,239,000		101,637,000
Level 2
Assets:
Securities available-for-sale	576,545,000		506,493,000
Loans held-for-sale	3,933,000		4,918,000
Liabilities:
Other liabilities	845,000		994,000
Level 3
Assets and liabilities measured at fair value on a recurring basis
Purchases		$ 0
Assets:
Securities available-for-sale	34,509,000		25,345,000
Recurring
Assets:
Total financial assets	622,557,000		544,205,000
Liabilities:
Total	1,520,000		1,667,000
Recurring | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	3,933,000		4,918,000
Mortgage servicing rights	6,608,000		6,489,000
Recurring | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,520,000		1,667,000
Recurring | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	675,000		673,000
Recurring | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	287,000		287,000
Recurring | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	38,558,000		41,534,000
Recurring | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	219,507,000		68,703,000
Recurring | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,540,000		10,630,000
Recurring | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	108,324,000		170,927,000
Recurring | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	139,886,000		138,407,000
Recurring | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	92,239,000		101,637,000
Recurring | Level 2
Assets:
Total financial assets	581,440,000		512,371,000
Liabilities:
Total	1,520,000		1,667,000
Recurring | Level 2 | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	3,933,000		4,918,000
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,520,000		1,667,000
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	675,000		673,000
Recurring | Level 2 | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	287,000		287,000
Recurring | Level 2 | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	38,558,000		41,534,000
Recurring | Level 2 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	187,842,000		46,477,000
Recurring | Level 2 | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,540,000		10,630,000
Recurring | Level 2 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	105,480,000		167,808,000
Recurring | Level 2 | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	139,886,000		138,407,000
Recurring | Level 2 | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	92,239,000		101,637,000
Recurring | Level 3
Assets:
Total financial assets	41,117,000		31,834,000
Recurring | Level 3 | Finite-Lived Intangible Assets [Member]
Assets:
Mortgage servicing rights	6,608,000		6,489,000
Recurring | Level 3 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	31,665,000		22,226,000
Recurring | Level 3 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	$ 2,844,000		$ 3,119,000

Fair Value Measurements - Chang

Fair Value Measurements - Changes in Level 3 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Collateralized loan obligations
Changes in Level 3
Beginning balance	$ 3,119
Total gains or losses
Included in other comprehensive income	16
Purchases, issuances, sales, and settlements
Settlements	(304)
Ending balance	2,844
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	13
States and political subdivisions
Changes in Level 3
Beginning balance	22,226	$ 111
Total gains or losses
Included in other comprehensive income	(8)
Purchases, issuances, sales, and settlements
Purchases	9,561
Settlements	(114)
Ending balance	31,665	111
Mortgage servicing rights
Changes in Level 3
Beginning balance	6,489	5,847
Total gains or losses
Included in earnings (or changes in net assets)		(906)
Purchases, issuances, sales, and settlements
Issuances	252	246
Settlements	(100)	(135)
Ending balance	6,608	$ 5,052
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	$ (33)

Fair Value Measurements - Quant

Fair Value Measurements - Quantitative and Qualitative Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 6,608,000	$ 6,489,000
Minimum
Quantitative information about Level 3 fair value measurements
Prepayment speed (as a percent)		6.50%
Maximum
Quantitative information about Level 3 fair value measurements
Prepayment speed (as a percent)		77.80%
Weighted Average
Quantitative information about Level 3 fair value measurements
Prepayment speed (as a percent)		9.60%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	6,608,000	$ 6,489,000
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Minimum
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 10	10
Discount rate (as a percent)	6.50%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Maximum
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 37.6	17
Discount rate (as a percent)	77.80%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Weighted Average
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 10.2	$ 10.2
Discount rate (as a percent)	9.40%

Fair Value Measurements - Nonre

Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Assets and liabilities measured at fair value
Valuation allowance	$ 803	$ 1,049
Carrying value of other real estate owned	13,481	11,916	$ 17,745	$ 19,141
OREO Valuation allowance	9,659	9,982	$ 14,399	$ 14,127
Nonrecurring
Assets and liabilities measured at fair value
Total	13,481	11,916
Nonrecurring | Impaired loans
Assets and liabilities measured at fair value
Valuation allowance	803	1,000
Increase (decrease) of specific allocations within the provision for loan losses	246	1,000
Nonrecurring | Other real estate owned
Assets and liabilities measured at fair value
Total	13,481	11,916
Carrying value of other real estate owned	13,500	11,900
Outstanding balance	24,700	23,500
OREO Valuation allowance	9,700	10,000
OREO participations	1,600	1,600
Nonrecurring | Level 3
Assets and liabilities measured at fair value
Total	13,481	11,916
Nonrecurring | Level 3 | Other real estate owned
Assets and liabilities measured at fair value
Total	$ 13,481	$ 11,916

Fair Values of Financial Inst68

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial assets:
Cash and due from banks	$ 41,332	$ 33,805
Interest bearing deposits with financial institutions	19,347	13,529
Securities available-for-sale	611,054	531,838
FHLBC and FRBC Stock	8,593	7,918
Bank-owned life insurance	60,691	60,332
Financial liabilities:
Noninterest bearing deposits	559,666	513,688
Other short-term borrowings	85,000	70,000
Junior subordinated debentures	57,603	57,591
Carrying Amount
Financial assets:
Cash and due from banks	41,332	33,805
Interest bearing deposits with financial institutions	19,347	13,529
Securities available-for-sale	611,054	531,838
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	3,933	4,918
Loans, net	1,472,280	1,462,651
Accrued interest receivable	6,898	5,928
Financial liabilities:
Noninterest bearing deposits	559,666	513,688
Interest bearing deposits	1,377,488	1,353,097
Securities sold under repurchase agreements	34,731	25,715
Other short-term borrowings	85,000	70,000
Junior subordinated debentures	57,603	57,591
Subordinated debenture	43,982	43,998
Interest rate swap	845	994
Borrowing interest payable	867	202
Deposit interest payable	555	599
Total Fair Value
Financial assets:
Cash and due from banks	41,332	33,805
Interest bearing deposits with financial institutions	19,347	13,529
Securities available-for-sale	611,054	531,838
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	3,933	4,918
Loans, net	1,468,691	1,453,429
Accrued interest receivable	6,898	5,928
Financial liabilities:
Noninterest bearing deposits	559,666	513,688
Interest bearing deposits	1,374,677	1,351,000
Securities sold under repurchase agreements	34,731	25,715
Other short-term borrowings	85,000	70,000
Junior subordinated debentures	55,972	55,163
Subordinated debenture	46,233	43,998
Interest rate swap	845	994
Borrowing interest payable	867	202
Deposit interest payable	555	599
Level 1
Financial assets:
Cash and due from banks	41,332	33,805
Interest bearing deposits with financial institutions	19,347	13,529
Financial liabilities:
Noninterest bearing deposits	559,666	513,688
Junior subordinated debentures	32,889	32,404
Level 2
Financial assets:
Securities available-for-sale	576,545	506,493
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	3,933	4,918
Accrued interest receivable	6,898	5,928
Financial liabilities:
Interest bearing deposits	1,374,677	1,351,000
Securities sold under repurchase agreements	34,731	25,715
Other short-term borrowings	85,000	70,000
Junior subordinated debentures	23,083	22,759
Subordinated debenture	46,233	43,998
Interest rate swap	845	994
Borrowing interest payable	867	202
Deposit interest payable	555	599
Level 3
Financial assets:
Securities available-for-sale	34,509	25,345
Loans, net	$ 1,468,691	$ 1,453,429

Financial Instruments with Of69

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Interest Rate Derivatives (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item
Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Asset Derivatives, Fair Value	$ 962	$ 960
Liability Derivatives, Fair Value	675	673
Interest rate swap agreements net of swap credit valuation | Cash Flow Hedging [Member]
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Unrealized loss	(845)	(994)
Notional or Contractual Amount	25,774	25,774
Interest rate swap agreements net of swap credit valuation | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Investment securities pledged with financial institutions, dollars	$ 6,000	$ 6,200
Number of correspondent financial institutions where investment securities are pledged | item	2	2
Weighted average maturity	7 years 4 months 24 days	7 years 3 months 18 days
Notional or Contractual Amount	$ 97,151	$ 85,807
Asset Derivatives, Fair Value	675	673
Liability Derivatives, Fair Value	675	673
Commitments | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Notional or Contractual Amount	30,732	31,980
Asset Derivatives, Fair Value	$ 287	$ 287

Financial Instruments with Of70

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Commitments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Company's contractual commitments due to letters of credit
Total letters of credit	$ 13,015	$ 13,511
Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	378	315
Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,637	13,196
Borrower
Company's contractual commitments due to letters of credit
Total letters of credit	12,498	12,892
Borrower | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	283	220
Borrower | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,215	12,672
Borrower | Financial standby
Company's contractual commitments due to letters of credit
Total letters of credit	4,224	4,184
Borrower | Financial standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	217	137
Borrower | Financial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	4,007	4,047
Borrower | Commercial standby
Company's contractual commitments due to letters of credit
Total letters of credit	122	126
Borrower | Commercial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	122	126
Borrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	8,152	8,582
Borrower | Performance standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	66	83
Borrower | Performance standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	8,086	8,499
Nonborrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	517	619
Nonborrower | Performance standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	95	95
Nonborrower | Performance standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	$ 422	$ 524