Old Second Bancorp (OSBC) 10-Q 7 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 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	Jun. 30, 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		29,627,086
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 32,614	$ 33,805
Interest bearing deposits with financial institutions	18,483	13,529
Cash and cash equivalents	51,097	47,334
Securities available-for-sale, at fair value	568,227	531,838
Federal Home Loan Bank and Federal Reserve Bank stock	8,593	7,918
Loans held-for-sale	5,440	4,918
Loans	1,539,647	1,478,809
Less: allowance for loan losses	15,836	16,158
Net loans	1,523,811	1,462,651
Premises and equipment, net	38,061	38,977
Other real estate owned	11,724	11,916
Mortgage servicing rights, net	6,528	6,489
Goodwill and core deposit intangible	8,968	9,018
Bank-owned life insurance (BOLI)	61,041	60,332
Deferred tax assets, net	45,356	53,464
Other assets	14,595	16,333
Total assets	2,343,441	2,251,188
Deposits:
Noninterest bearing demand	546,463	513,688
Interest bearing:
Savings, NOW, and money market	971,715	950,849
Time	391,967	402,248
Total deposits	1,910,145	1,866,785
Securities sold under repurchase agreements	36,361	25,715
Other short-term borrowings	75,000	70,000
Junior subordinated debentures	57,615	57,591
Senior notes	44,008	43,998
Other liabilities	29,182	11,889
Total liabilities	2,152,311	2,075,978
Stockholders' Equity
Common stock	34,626	34,534
Additional paid-in capital	117,186	116,653
Retained earnings	138,442	129,005
Accumulated other comprehensive loss	(2,668)	(8,762)
Treasury stock	(96,456)	(96,220)
Total stockholders' equity	191,130	175,210
Total liabilities and stockholders' equity	$ 2,343,441	$ 2,251,188

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 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	34,625,734	34,534,234
Common stock, Shares outstanding	29,627,086	29,556,216
Treasury stock, Shares	4,998,648	4,978,018

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest and Dividend Income
Loans, including fees	$ 17,385	$ 13,039	$ 33,994	$ 26,097
Loans held-for-sale	37	39	61	67
Securities:
Taxable	2,607	4,382	5,570	8,593
Tax exempt	1,975	220	3,040	399
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock	92	84	177	168
Interest bearing deposits with financial institutions	31	15	54	34
Total interest and dividend income	22,127	17,779	42,896	35,358
Interest Expense
Savings, NOW, and money market deposits	233	193	456	384
Time deposits	1,025	869	2,004	1,691
Other short-term borrowings	150	26	258	46
Junior subordinated debentures	1,059	1,083	2,143	2,167
Senior notes	672		1,345
Subordinated debt		243		482
Notes payable and other borrowings		2		4
Total interest expense	3,139	2,416	6,206	4,774
Net interest and dividend income	18,988	15,363	36,690	30,584
Loan loss reserve release	750		750
Net interest and dividend income after release for loan losses	18,238	15,363	35,940	30,584
Noninterest Income
Trust income	1,638	1,502	3,096	2,871
Service charges on deposits	1,615	1,646	3,233	3,205
Secondary mortgage fees	223	280	399	473
Mortgage servicing rights mark to market loss	(429)	(733)	(562)	(1,774)
Mortgage servicing gain / (loss), net of changes in fair value	444	422	879	843
Net gain on sales of mortgage loans	1,473	1,642	2,620	2,854
Securities loss, net	(131)		(267)	(61)
Increase in cash surrender value of bank-owned life insurance	350	319	709	604
Debit card interchange income	1,081	1,049	2,056	1,996
(Loss) gain on disposal and transfer of fixed assets	12		10	(1)
Other income	1,041	1,150	2,172	2,542
Total noninterest income	7,317	7,277	14,345	13,552
Noninterest Expense
Salaries and employee benefits	10,545	8,814	21,118	17,840
Occupancy expense, net	1,462	1,346	3,028	2,927
Furniture and equipment expense	1,112	1,063	2,202	1,988
FDIC insurance	165	362	313	565
General bank insurance	264	272	534	570
Amortization of core deposit intangible	25		50
Advertising expense	452	435	838	782
Debit card interchange expense	399	620	748	823
Legal fees	184	191	288	352
Other real estate expense, net	539	879	1,248	1,617
Other expense	2,839	2,718	5,673	5,500
Total noninterest expense	17,986	16,700	36,040	32,964
Income before income taxes	7,569	5,940	14,245	11,172
Provision for income taxes	2,112	2,095	4,216	4,005
Net income	$ 5,457	$ 3,845	$ 10,029	$ 7,167
Basic earnings per share (in dollars per share)	$ 0.19	$ 0.13	$ 0.34	$ 0.24
Diluted earnings per share (in dollars per share)	$ 0.18	$ 0.13	$ 0.33	$ 0.24

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements of Comprehensive Income
Net income	$ 5,457	$ 3,845	$ 10,029	$ 7,167
Unrealized holding (losses) gains on available-for-sale securities arising during the period	6,269	8,076	10,347	5,767
Related tax benefit (expense)	(2,520)	(3,233)	(4,134)	(2,308)
Holding (losses) gains after tax on available-for-sale securities	3,749	4,843	6,213	3,459
Less: Reclassification adjustment for the net (losses) gains realized during the period
Net realized (losses) gains	(131)		(267)	(61)
Income tax benefit (expense) on net realized gains	52		106	25
Net realized (losses) gains after tax	(79)		(161)	(36)
Other comprehensive (loss) income on available-for-sale securities	3,828	4,843	6,374	3,495
Accretion of net unrealized holding gains on held-to-maturity transferred from available-for-sale securities		5,715		5,939
Related tax expense		(2,354)		(2,446)
Other comprehensive income on held-to-maturity securities		3,361		3,493
Changes in fair value of derivatives used for cashflow hedges	(613)	(1,597)	(464)	(4,024)
Related tax benefit	245	640	184	1,612
Other comprehensive loss on cashflow hedges	(368)	(957)	(280)	(2,412)
Total other comprehensive income (loss) income	3,460	7,247	6,094	4,576
Total comprehensive income	$ 8,917	$ 11,092	$ 16,123	$ 11,743

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net income	$ 10,029,000	$ 7,167,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of leasehold improvement	1,193,000	1,097,000
Change in fair value of mortgage servicing rights	562,000	1,774,000
Loan loss reserve release	750,000
Provision for deferred tax expense	4,052,000	3,717,000
Originations of loans held-for-sale	(75,079,000)	(83,698,000)
Proceeds from sales of loans held-for-sale	76,649,000	83,324,000
Net gain on sales of mortgage loans	(2,620,000)	(2,854,000)
Net discount accretion of purchase accounting adjustment on loans	(850,000)
Change in current income taxes receivable (payable)	(66,000)	259,000
Increase in cash surrender value of bank-owned life insurance	(709,000)	(604,000)
Change in accrued interest receivable and other assets	1,665,000	(3,152,000)
Change in accrued interest payable and other liabilities	16,895,000	(185,000)
Net discount (accretion)/premium amortization on securities	293,000	(385,000)
Securities losses, net	267,000	61,000
Amortization of core deposit	50,000
Amortization of junior subordinated debentures issuance costs	24,000	24,000
Amortization of senior notes issuance costs	52,000
Stock based compensation	625,000	325,000
Net gain on sale of other real estate owned	(178,000)	(67,000)
Provision for other real estate owned losses	710,000	940,000
Net loss on disposal of fixed assets	(11,000)	1,000
Loss on transfer of premises to other real estate owned	1,000
Net cash provided by (used in) operating activities	34,304,000	7,744,000
Cash flows from investing activities
Proceeds from maturities and calls including pay down of securities available-for-sale	78,564,000	25,687,000
Proceeds from sales of securities available-for-sale	100,856,000	44,993,000
Purchases of securities available-for-sale	(205,755,000)	(122,700,000)
Proceeds from maturities and calls including pay down of securities held-to-maturity		3,372,000
Proceeds from sales of Federal Home Loan Bank stock	(675,000)	600,000
Net change in loans	(64,585,000)	(28,805,000)
Improvements in other real estate owned		(12,000)
Proceeds from sales of other real estate owned	3,280,000	2,996,000
Proceeds from disposition of premises and equipment	13,000
Net purchases of premises and equipment	(375,000)	(439,000)
Net cash (used in) provided by investing activities	(88,677,000)	(74,308,000)
Cash flows from financing activities
Net change in deposits	43,360,000	23,039,000
Net change in securities sold under repurchase agreements	10,646,000	9,068,000
Net change in other short-term borrowings	5,000,000	35,000,000
Payment of senior note issuance costs	(42,000)
Dividends paid common stock	(592,000)	(296,000)
Purchase of treasury stock	(236,000)	(254,000)
Net cash (used in) provided by financing activities	58,136,000	66,557,000
Net change in cash and cash equivalents	3,763,000	(7,000)
Cash and cash equivalents at beginning of period	47,334,000	40,338,000
Cash and cash equivalents at end of period	51,097,000	40,331,000
Supplemental cash flow information
Income taxes paid	230,000	100,000
Interest paid for deposits	2,448,000	2,053,000
Interest paid for borrowings	3,787,000	2,665,000
Non-cash transfer of loans to other real estate owned	3,525,000	968,000
Non-cash transfer of premises to other real estate owned	$ 95,000
Non-cash transfer of securities held-to-maturity to securities available-for-sale		$ 244,823,000

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			7,167			7,167
Other comprehensive gain, net of tax				4,576		4,576
Dividends declared and paid			(296)			(296)
Change in restricted stock	106	(106)
Tax effect from vesting of restricted stock		174				174
Stock based compensation		325				325
Purchase of treasury stock					(254)	(254)
Balance at Jun. 30, 2016	34,533	116,311	121,080	(8,083)	(96,220)	167,621
Balance at Dec. 31, 2016	34,534	116,653	129,005	(8,762)	(96,220)	175,210
Increase (Decrease) in Stockholders' Equity
Net income			10,029			10,029
Other comprehensive gain, net of tax				6,094		6,094
Dividends declared and paid			(592)			(592)
Change in restricted stock	92	(92)
Stock based compensation		625				625
Purchase of treasury stock					(236)	(236)
Balance at Jun. 30, 2017	$ 34,626	$ 117,186	$ 138,442	$ (2,668)	$ (96,456)	$ 191,130

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 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 June 30, 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. Adoption of this ASU is expected to affect the methodology used to record certain recurring revenue streams within trust and asset management fees, but this impact is not anticipated to be significant to the Company’s financial statements. The Company will adopt ASU 2015-14 and related issuances on January 1, 2018, with a cumulative effect adjustment to opening retained earnings, if an adjustment is deemed to be material. 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 and evaluating model options 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. As the Company has a significant unamortized premium on tax exempt debt securities, management has determined that early adoption will be implemented under a modified retrospective basis. Adoption of ASU 2017-08 is expected to reduce the net interest margin by approximately 10 basis points a quarter going forward as the premium amortization recorded will increase over current levels. Subsequent Events On July 18, 2017, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on August 7, 2017, to stockholders of record as of July 28, 2017; dividends of $296,000 were paid to stockholders on August 7, 2017.

Acquisitions

Acquisitions	6 Months Ended
	Jun. 30, 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	6 Months Ended
	Jun. 30, 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 June 30, 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 June 30, 2017, and December 31, 2016. The following table summarizes the amortized cost and fair value of the securities portfolio at June 30, 2017, and December 31, 2016, and the corresponding amounts of gross unrealized gains and losses: Gross Gross Amortized Unrealized Unrealized Fair June 30, 2017 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed $ 21,039 $ 6 $ (199) $ 20,846 States and political subdivisions 222,098 4,472 (1,052) 225,518 Corporate bonds 12,807 58 (249) 12,616 Collateralized mortgage obligations 102,717 159 (1,963) 100,913 Asset-backed securities 144,812 557 (4,984) 140,385 Collateralized loan obligations 67,735 305 (91) 67,949 Total securities available-for-sale $ 571,208 $ 5,557 $ (8,538) $ 568,227 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 June 30, 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 $ 11,600 2.60 % $ 11,636 Due after one year through five years 1,847 4.65 1,844 Due after five years through ten years 18,178 2.88 18,202 Due after ten years 203,280 3.01 206,452 234,905 2.99 238,134 Mortgage-backed and collateralized mortgage obligations 123,756 2.54 121,759 Asset-backed securities 144,812 2.21 140,385 Collateralized loan obligations 67,735 4.01 67,949 Total securities available-for-sale $ 571,208 2.82 % $ 568,227 At June 30, 2017, the Company’s investments include $119.3 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 $13.4 million, or 10.43%, of outstanding principal. The Company has invested in securities issued from one originator that individually amounts to over 10% of the Company’s stockholders equity. As of June 30, 2017, GCO Education Loan Funding Corp’s amortized cost was $27.5 million and fair value was $26.0 million within the Company’s portfolio. Securities with unrealized losses at June 30, 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 June 30, 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 8 $ 178 $ 17,764 1 $ 21 $ 805 9 $ 199 $ 18,569 States and political subdivisions 4 1,052 16,372 - - - 4 1,052 16,372 Corporate bonds 1 108 4,892 2 141 5,205 3 249 10,097 Collateralized mortgage obligations 10 1,776 64,987 4 187 10,898 14 1,963 75,885 Asset-backed securities 1 274 4,281 12 4,710 106,755 13 4,984 111,036 Collateralized loan obligations 1 91 7,905 - - - 1 91 7,905 Total securities available-for-sale 25 $ 3,479 $ 116,201 19 $ 5,059 $ 123,663 44 $ 8,538 $ 239,864 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 and six months ended June 30, 2017, June 30, 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	6 Months Ended
	Jun. 30, 2017
Loans
Loans	Note 4 – Loans Major classifications of loans were as follows: June 30, 2017 December 31, 2016 Commercial $ 256,760 $ 228,113 Real estate - commercial 706,103 736,247 Real estate - construction 93,661 64,720 Real estate - residential 398,170 377,851 Consumer 2,878 3,237 Overdraft 316 436 Lease financing receivables 70,138 55,451 Other 10,943 11,537 1,538,969 1,477,592 Net deferred loan costs 678 1,217 Total loans $ 1,539,647 $ 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 77.8% and 79.7% of the portfolio at June 30, 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 June 30, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 21 $ - $ - $ 21 $ 256,523 $ 216 $ 256,760 $ - Leases 898 - - 898 68,780 460 70,138 Real estate - commercial Owner occupied general purpose 629 - - 629 139,964 460 141,053 - Owner occupied special purpose - - - - 170,186 366 170,552 - Non-owner occupied general purpose 835 - - 835 215,423 1,085 217,343 - Non-owner occupied special purpose - - - - 116,218 - 116,218 - Retail properties - - - - 44,781 1,144 45,925 - Farm 1,305 - - 1,305 13,707 - 15,012 - Real estate - construction Homebuilder - - - - 1,947 - 1,947 - Land - - - - 2,870 - 2,870 - Commercial speculative - - - - 31,268 68 31,336 - All other - - - - 57,356 152 57,508 - Real estate - residential Investor 3 95 - 98 59,113 686 59,897 - Multifamily 1,390 - - 1,390 92,896 4,824 99,110 - Owner occupied - 279 - 279 119,355 4,187 123,821 - Revolving and junior liens 557 74 - 631 113,685 1,026 115,342 - Consumer 2 - - 2 2,867 9 2,878 - Other 1 - - - - 11,937 - 11,937 - Total $ 5,640 $ 448 $ - $ 6,088 $ 1,518,876 $ 14,683 $ 1,539,647 $ - 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: June 30, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 238,814 $ 17,691 $ 255 $ - $ 256,760 Leases 68,780 898 460 - 70,138 Real estate - commercial Owner occupied general purpose 136,655 3,174 1,224 - 141,053 Owner occupied special purpose 165,945 4,241 366 - 170,552 Non-owner occupied general purpose 215,604 654 1,085 - 217,343 Non-owner occupied special purpose 112,543 - 3,675 - 116,218 Retail Properties 43,535 1,246 1,144 - 45,925 Farm 12,494 1,213 1,305 - 15,012 Real estate - construction Homebuilder 1,947 - - - 1,947 Land 2,870 - - - 2,870 Commercial speculative 31,267 - 69 - 31,336 All other 56,286 894 328 - 57,508 Real estate - residential Investor 59,054 - 843 - 59,897 Multifamily 94,286 - 4,824 - 99,110 Owner occupied 118,320 566 4,935 - 123,821 Revolving and junior liens 113,379 - 1,963 - 115,342 Consumer 2,869 - 9 - 2,878 Other 11,937 - - - 11,937 Total $ 1,486,585 $ 30,577 $ 22,485 $ - $ 1,539,647 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 $991,000 and $1.8 million residential assets in the process of foreclosure as of June 30, 2017, and December 31, 2016, respectively. The Company also had $986,000 and $225,000 in residential real estate included in OREO as of June 30, 2017, and December 31, 2016, respectively. Impaired loans, which include nonaccrual loans and troubled debt restructurings, by class of loans for the June 30, 2017 periods listed were as follows: Six Months Ended As of June 30, 2017 June 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 216 $ 368 $ - $ 128 $ - Leases 220 245 - 293 - Commercial real estate Owner occupied general purpose 460 495 - 1,170 - Owner occupied special purpose 366 510 - 376 - Non-owner occupied general purpose 1,143 1,425 - 1,443 1 Non-owner occupied special purpose - - - 507 - Retail properties 1,144 1,209 - 1,161 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 68 79 - 72 - All other 152 156 - 180 - Residential Investor 1,576 2,065 - 1,708 20 Multifamily 4,824 4,965 - 2,412 - Owner occupied 8,209 9,543 - 9,016 65 Revolving and junior liens 1,971 2,211 - 2,227 15 Consumer 9 9 - 105 - Total impaired loans with no recorded allowance 20,358 23,280 - 20,798 101 With an allowance recorded Commercial - - - - - Leases 240 240 98 120 - 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 - - - 402 - Revolving and junior liens - - - - - Consumer - - - - - Total impaired loans with a recorded allowance 240 240 98 645 - Total impaired loans $ 20,598 $ 23,520 $ 98 $ 21,443 $ 101 Impaired loans by class of loans as of December 31, 2016, and for the six months ended June 30, 2016, were as follows: Six Months Ended As of December 31, 2016 June 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 299 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,494 44 Owner occupied special purpose 385 518 - 650 - Non-owner occupied general purpose 1,744 2,010 - 1,573 1 Non-owner occupied special purpose 1,013 1,649 - - - Retail properties 1,179 1,235 - 1,017 - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 80 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,879 23 Multifamily - - - - - Owner occupied 9,824 11,391 - 10,124 79 Revolving and junior liens 2,484 3,018 - 2,673 6 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 21,425 153 With an allowance recorded Commercial - - - 1 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 306 - Non-owner occupied special purpose - - - 825 - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 222 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 1,377 - Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 22,802 $ 153 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 TDR Modifications Quarter Ended June 30, 2017 Six Months Ended June 30, 2017 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - residential Revolving and junior liens Other 1 2 $ 155 $ 147 6 $ 399 $ 388 Total 2 $ 155 $ 147 6 $ 399 $ 388 TDR Modifications TDR Modifications Quarter Ended June 30, 2016 Six Months Ended June 30, 2016 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - commercial Other 1 - $ - $ - 2 $ 312 $ 220 Real estate - residential Owner occupied HAMP 2 - - - 1 239 237 Revolving and junior liens HAMP 2 1 39 39 4 469 438 Total 1 $ 39 $ 39 7 $ 1,020 $ 895 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 the six months ended June 30, 2017, and June 30, 2016, for loans that were restructured within the 12 month period prior to default.

Allowance for Loan Losses

Allowance for Loan Losses	6 Months Ended
	Jun. 30, 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 and six months ended June 30, 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 June 30, 2017 Beginning balance $ 1,672 $ 603 $ 7,831 $ 978 $ 3,056 $ 764 $ 837 $ 15,741 Charge-offs 6 - 4 - 976 80 - 1,066 Recoveries 5 - 46 60 249 46 5 411 Provision (Release) 479 188 234 (181) 247 118 (335) 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Six months ended June 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 7 117 278 4 1,171 180 - 1,757 Recoveries 7 - 81 78 391 121 7 685 Provision (Release) 521 275 (1,243) 394 664 74 65 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Ending balance: Individually evaluated for impairment $ - $ 98 $ - $ - $ - $ - $ - $ 98 Ending balance: Collectively evaluated for impairment $ 2,150 $ 693 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,738 Loans: Ending balance $ 256,760 $ 70,138 $ 706,103 $ 93,661 $ 398,170 $ 2,878 $ 11,937 $ 1,539,647 Ending balance: Individually evaluated for impairment $ 216 $ 460 $ 3,113 $ 220 $ 16,580 $ 9 $ - $ 20,598 Ending balance: Collectively evaluated for impairment $ 256,544 $ 69,678 $ 702,990 $ 93,441 $ 381,590 $ 2,869 $ 11,937 $ 1,519,049 Changes in the allowance for loan losses by segment of loans based on method of impairment for June 30, 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 June 30, 2016 Beginning balance $ 2,173 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,081 $ 2,101 $ 16,246 Charge-offs 8 - 690 - 171 67 - 936 Recoveries 8 - 145 6 290 56 7 512 Provision (Release) (753) 91 706 124 1,150 (208) (1,110) - Ending balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Six months ended June 30, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 19 13 692 - 437 150 - 1,311 Recoveries 12 - 228 11 519 127 13 910 Provision (Release) (614) 233 405 104 1,157 (305) (980) - Ending balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Ending balance: Individually evaluated for impairment $ - $ - $ 752 $ - $ 6 $ - $ - $ 758 Ending balance: Collectively evaluated for impairment $ 1,420 $ 275 $ 8,202 $ 380 $ 2,927 $ 862 $ 998 $ 15,064 Loans: Ending balance $ 127,709 $ 42,013 $ 600,942 $ 22,204 $ 352,595 $ 2,966 $ 12,722 $ 1,161,151 Ending balance: Individually evaluated for impairment $ 528 $ - $ 9,604 $ 78 $ 14,508 $ - $ - $ 24,718 Ending balance: Collectively evaluated for impairment $ 127,181 $ 42,013 $ 591,338 $ 22,126 $ 338,087 $ 2,966 $ 12,722 $ 1,136,433

Other Real Estate Owned

Other Real Estate Owned	6 Months Ended
	Jun. 30, 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: Quarters Ended Six Months Ended June 30, June 30, Other real estate owned 2017 2016 2017 2016 Balance at beginning of period $ 13,481 $ 17,745 $ 11,916 $ 19,141 Property additions 204 586 3,620 968 Property improvements - - - 12 Less: Proceeds from property disposals, net of gains/losses 1,569 1,590 3,102 2,929 Period valuation adjustments 392 489 710 940 Balance at end of period $ 11,724 $ 16,252 $ 11,724 $ 16,252 Activity in the valuation allowance was as follows: Quarters Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Balance at beginning of period $ 9,659 $ 14,399 $ 9,982 $ 14,127 Provision for unrealized losses 392 489 710 940 Reductions taken on sales (1,747) (1,511) (2,388) (1,690) Balance at end of period $ 8,304 $ 13,377 $ 8,304 $ 13,377 Expenses related to OREO, net of lease revenue includes: Quarters Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Gain on sales, net $ (104) $ (25) $ (178) $ (67) Provision for unrealized losses 392 489 710 940 Operating expenses 293 420 816 856 Less: Lease revenue 42 5 100 112 Net OREO expense $ 539 $ 879 $ 1,248 $ 1,617

Deposits

Deposits	6 Months Ended
	Jun. 30, 2017
Deposits
Deposits	Note 7 – Deposits Major classifications of deposits were as follows: June 30, 2017 December 31, 2016 Noninterest bearing demand $ 546,463 $ 513,688 Savings 265,643 256,159 NOW accounts 429,205 419,417 Money market accounts 276,867 275,273 Certificates of deposit of less than $100,000 221,806 228,993 Certificates of deposit of $100,000 through $250,000 115,279 110,992 Certificates of deposit of more than $250,000 54,882 62,263 Total deposits $ 1,910,145 $ 1,866,785

Borrowings

Borrowings	6 Months Ended
	Jun. 30, 2017
Borrowings
Borrowings	Note 8 – Borrowings The following table is a summary of borrowings as of June 30, 2017, and December 31, 2016. Junior subordinated debentures are discussed in detail in Note 9: June 30, 2017 December 31, 2016 Securities sold under repurchase agreements $ 36,361 $ 25,715 FHLBC advances 1 75,000 70,000 Junior subordinated debentures 57,615 57,591 Senior notes 44,008 43,998 Total borrowings $ 212,984 $ 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 $36.4 million at June 30, 2017, and $25.7 million at December 31, 2016. The fair value of the pledged collateral was $44.4 million at June 30, 2017 and $43.0 million at December 31, 2016. At June 30, 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 June 30, 2017, the Bank had $75.0 million advances outstanding under the FHLBC as compared to $70.0 million outstanding as of December 31, 2016. As of June 30, 2017, FHLBC stock held was valued at $3.8 million, and any potential FHLBC advances were collateralized by securities with a fair value of $100.0 million and loans with a principal balance of $176.7 million, which carried a FHLBC calculated combined collateral value of $205.6 million. The Company had excess collateral of $94.3 million available to secure borrowings at June 30, 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 are being deferred and recorded to expense over the ten year term of the notes.

Junior Subordinated Debentures

Junior Subordinated Debentures	6 Months Ended
	Jun. 30, 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 were fixed at 6.77% through June 15, 2017, and float at 150 basis points over three-month LIBOR thereafter. The Trust II issuance converted from fixed to floating rate at three month LIBOR plus 150 basis points on June 15, 2017. Upon conversion to a floating rate, a cash flow hedge was initiated which resulted in the total interest rate paid on the debt of 4.34%, as compared to the rate paid prior to June 15, 2017 of 6.77%. 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.

Equity Compensation Plans

Equity Compensation Plans	6 Months Ended
	Jun. 30, 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 June 30, 2017, 443,209 shares remained available for issuance under the 2014 Plan. There were no stock options granted or exercised in the second 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 six months ended June 30, 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 0.6 $ - Exercisable at end of period 94,500 $ 25.82 0.6 $ - 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 158,500 restricted awards issued under the 2014 Plan during the six months ended June 30, 2017. There were 120,000 restricted awards issued during the six months ended June 30, 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 $645,000 and $325,000 in the first six months of 2017 and 2016, respectively. A summary of changes in the Company’s unvested restricted awards for the six months ended June 30, 2017, is as follows: June 30, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 158,500 11.02 Vested (91,500) 5.07 Forfeited (1,000) 5.38 Nonvested at June 30 475,000 $ 7.76 Total unrecognized compensation cost of restricted awards was $2.3 million as of June 30, 2017, which is expected to be recognized over a weighted-average period of 2.31 years. Total unrecognized compensation cost of restricted awards was $1.2 million as of June 30, 2016, which was expected to be recognized over a weighted-average period of 2.16 years.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 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 June 30 (in thousands except for share and per share data): Quarters Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,587,095 29,535,915 29,573,881 29,509,672 Net income $ 5,457 $ 3,845 $ 10,029 $ 7,167 Basic earnings per share $ 0.19 $ 0.13 $ 0.34 $ 0.24 Diluted earnings per share: Weighted-average common shares outstanding 29,587,095 29,535,915 29,573,881 29,509,672 Dilutive effect of nonvested restricted awards 1 426,264 305,324 400,232 313,832 Dilutive effect of stock options 2,546 - 2,431 - Diluted average common shares outstanding 30,015,905 29,841,239 29,976,544 29,823,504 Net Income $ 5,457 $ 3,845 $ 10,029 $ 7,167 Diluted earnings per share $ 0.18 $ 0.13 $ 0.33 $ 0.24 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 977,839 900,839 977,839 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 June 30, 2017, and June 30, 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	6 Months Ended
	Jun. 30, 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 June 30, 2017, the Bank exceeded those thresholds. At June 30, 2017, the Bank’s Tier 1 capital leverage ratio was 10.23%, a decrease of 1 basis point from December 31, 2016, but well above the 8.00% objective. The Bank’s total capital ratio was 13.30%, a decrease of 15 basis points from December 31, 2016, but also slightly 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 June 30, 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 June 30, 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 June 30, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 161,114 8.55 % $ 108,352 5.750 % N/A N/A Old Second Bank 234,644 12.46 108,283 5.750 $ 122,407 6.50 % Total capital to risk weighted assets Consolidated 228,754 12.14 174,298 9.250 N/A N/A Old Second Bank 250,475 13.30 174,203 9.250 188,327 10.00 Tier 1 capital to risk weighted assets Consolidated 208,397 11.06 136,607 7.250 N/A N/A Old Second Bank 234,644 12.46 136,530 7.250 150,654 8.00 Tier 1 capital to average assets Consolidated 208,397 9.09 91,704 4.00 N/A N/A Old Second Bank 234,644 10.23 91,747 4.00 114,684 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 216,769 12.29 152,126 8.625 N/A N/A Old Second Bank 237,306 13.45 152,176 8.625 176,436 10.00 Tier 1 capital to risk weighted assets Consolidated 191,988 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 191,988 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 June 30, 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 and certain other payments.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 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 June 30, 2017, or June 30, 2016. The Company purchased states and political subdivisions securities of $10.5 million, which were deemed as Level 3 for the six month period ended June 30, 2017. There were no securities purchased deemed as Level 3 for the six month period ended June 30, 2016. The majority of securities available-for-sale 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 June 30, 2017, and December 31, 2016, respectively, measured by the Company at fair value on a recurring basis: June 30, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 20,846 $ - $ 20,846 States and political subdivisions - 205,170 20,348 225,518 Corporate bonds - 12,616 - 12,616 Collateralized mortgage obligations - 98,235 2,678 100,913 Asset-backed securities - 140,385 - 140,385 Collateralized loan obligations - 67,949 - 67,949 Loans held-for-sale - 5,440 - 5,440 Mortgage servicing rights - - 6,528 6,528 Other assets (Interest rate swap agreements) - 385 - 385 Other assets (Mortgage banking derivatives) - 319 - 319 Total $ - $ 551,345 $ 29,554 $ 580,899 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,843 $ - $ 1,843 Total $ - $ 1,843 $ - $ 1,843 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: Six Months Ended June 30, 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) 23 - (280) Included in other comprehensive income (1) (289) - Purchases, issuances, sales, and settlements Purchases - 10,456 - Issuances - - 601 Settlements (463) (12,045) (282) Ending balance June 30, 2017 $ 2,678 $ 20,348 $ 6,528 Six Months Ended June 30, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ 111 $ 5,847 Transfers out of Level 3 (42) - Total gains or losses Included in earnings (or changes in net assets) - (1,464) Included in other comprehensive income 9 - Purchases, issuances, sales, and settlements Issuances - 625 Settlements (78) (310) Ending balance June 30, 2016 $ - $ 4,698 The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of June 30, 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 $ 6,528 Discounted Cash Flow Discount Rate 10.0 - 206.3% 10.2 % Prepayment Speed 7.0 - 68.3% 10.0 % 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 $20.3 million for state and political subdivisions representing various local municipality securities and $2.7 million of collateralized mortgage obligations at June 30, 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 state and political subdivisions securities balance in Level 3 fair value at June 30, 2016, was zero; the securities were transferred to Level 3 in the fourth quarter of 2016. 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 June 30, 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: June 30, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 142 $ 142 Other real estate owned, net 2 - - 11,724 11,724 Total $ - $ - $ 11,866 $ 11,866 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 $98,000 resulting in a decrease of specific allocations within the allowance for loan losses of $705,000 for the six months ended June 30, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.7 million, which is made up of the outstanding balance of $21.6 million, net of a valuation allowance of $8.3 million and participations of $1.6 million, at June 30, 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 million for the year ended 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	6 Months Ended
	Jun. 30, 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: June 30, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 32,614 $ 32,614 $ 32,614 $ - $ - Interest bearing deposits with financial institutions 18,483 18,483 18,483 - - Securities available-for-sale 568,227 568,227 - 545,201 23,026 FHLBC and FRBC Stock 8,593 8,593 - 8,593 - Loans held-for-sale 5,440 5,440 - 5,440 - Loans, net 1,523,811 1,519,216 - - 1,519,216 Accrued interest receivable 7,569 7,569 - 7,569 - Financial liabilities: Noninterest bearing deposits $ 546,463 $ 546,463 $ 546,463 $ - $ - Interest bearing deposits 1,363,682 1,375,085 - 1,375,085 - Securities sold under repurchase agreements 36,361 36,361 - 36,361 - Other short-term borrowings 75,000 75,000 - 75,000 - Junior subordinated debentures 57,615 60,534 33,472 27,062 - Senior notes 44,008 46,258 - 46,258 - Interest rate swap agreements 1,458 1,458 - 1,458 - Borrowing interest payable 89 89 - 89 - Deposit interest payable 611 611 - 611 - 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	6 Months Ended
	Jun. 30, 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 changed 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 June 30, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (1,458) (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 $4.2 million in securities available-for-sale pledged to support interest rate swap activity with two correspondent financial institutions at June 30, 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 June 30, 2017, the notional amount of non-hedging interest rate swaps was $101.6 million with a weighted average maturity of 7.2 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 June 30, 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 $ 101,613 Other Assets $ 385 Other Liabilities $ 385 Interest rate lock commitments and forward contracts 37,142 Other Assets 319 N/A - Total $ 704 $ 385 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 June 30, 2017, and December 31, 2016. The following table is a summary of letter of credit commitments (in thousands): June 30, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 167 $ 3,979 $ 4,146 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 8,315 8,381 83 8,499 8,582 233 12,416 12,649 220 12,672 12,892 Non-borrower: Performance standby - 422 422 95 524 619 Total letters of credit $ 233 $ 12,838 $ 13,071 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 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. Adoption of this ASU is expected to affect the methodology used to record certain recurring revenue streams within trust and asset management fees, but this impact is not anticipated to be significant to the Company’s financial statements. The Company will adopt ASU 2015-14 and related issuances on January 1, 2018, with a cumulative effect adjustment to opening retained earnings, if an adjustment is deemed to be material. 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 and evaluating model options 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. As the Company has a significant unamortized premium on tax exempt debt securities, management has determined that early adoption will be implemented under a modified retrospective basis. Adoption of ASU 2017-08 is expected to reduce the net interest margin by approximately 10 basis points a quarter going forward as the premium amortization recorded will increase over current levels.

Securities (Tables)

Securities (Tables)	6 Months Ended
	Jun. 30, 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 June 30, 2017 Cost Gains Losses Value Securities available-for-sale U.S. government agencies mortgage-backed $ 21,039 $ 6 $ (199) $ 20,846 States and political subdivisions 222,098 4,472 (1,052) 225,518 Corporate bonds 12,807 58 (249) 12,616 Collateralized mortgage obligations 102,717 159 (1,963) 100,913 Asset-backed securities 144,812 557 (4,984) 140,385 Collateralized loan obligations 67,735 305 (91) 67,949 Total securities available-for-sale $ 571,208 $ 5,557 $ (8,538) $ 568,227 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 $ 11,600 2.60 % $ 11,636 Due after one year through five years 1,847 4.65 1,844 Due after five years through ten years 18,178 2.88 18,202 Due after ten years 203,280 3.01 206,452 234,905 2.99 238,134 Mortgage-backed and collateralized mortgage obligations 123,756 2.54 121,759 Asset-backed securities 144,812 2.21 140,385 Collateralized loan obligations 67,735 4.01 67,949 Total securities available-for-sale $ 571,208 2.82 % $ 568,227
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 June 30, 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 8 $ 178 $ 17,764 1 $ 21 $ 805 9 $ 199 $ 18,569 States and political subdivisions 4 1,052 16,372 - - - 4 1,052 16,372 Corporate bonds 1 108 4,892 2 141 5,205 3 249 10,097 Collateralized mortgage obligations 10 1,776 64,987 4 187 10,898 14 1,963 75,885 Asset-backed securities 1 274 4,281 12 4,710 106,755 13 4,984 111,036 Collateralized loan obligations 1 91 7,905 - - - 1 91 7,905 Total securities available-for-sale 25 $ 3,479 $ 116,201 19 $ 5,059 $ 123,663 44 $ 8,538 $ 239,864 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)	6 Months Ended
	Jun. 30, 2017
Loans
Schedule of major classifications of loans	June 30, 2017 December 31, 2016 Commercial $ 256,760 $ 228,113 Real estate - commercial 706,103 736,247 Real estate - construction 93,661 64,720 Real estate - residential 398,170 377,851 Consumer 2,878 3,237 Overdraft 316 436 Lease financing receivables 70,138 55,451 Other 10,943 11,537 1,538,969 1,477,592 Net deferred loan costs 678 1,217 Total loans $ 1,539,647 $ 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 June 30, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 21 $ - $ - $ 21 $ 256,523 $ 216 $ 256,760 $ - Leases 898 - - 898 68,780 460 70,138 Real estate - commercial Owner occupied general purpose 629 - - 629 139,964 460 141,053 - Owner occupied special purpose - - - - 170,186 366 170,552 - Non-owner occupied general purpose 835 - - 835 215,423 1,085 217,343 - Non-owner occupied special purpose - - - - 116,218 - 116,218 - Retail properties - - - - 44,781 1,144 45,925 - Farm 1,305 - - 1,305 13,707 - 15,012 - Real estate - construction Homebuilder - - - - 1,947 - 1,947 - Land - - - - 2,870 - 2,870 - Commercial speculative - - - - 31,268 68 31,336 - All other - - - - 57,356 152 57,508 - Real estate - residential Investor 3 95 - 98 59,113 686 59,897 - Multifamily 1,390 - - 1,390 92,896 4,824 99,110 - Owner occupied - 279 - 279 119,355 4,187 123,821 - Revolving and junior liens 557 74 - 631 113,685 1,026 115,342 - Consumer 2 - - 2 2,867 9 2,878 - Other 1 - - - - 11,937 - 11,937 - Total $ 5,640 $ 448 $ - $ 6,088 $ 1,518,876 $ 14,683 $ 1,539,647 $ - 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	June 30, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 238,814 $ 17,691 $ 255 $ - $ 256,760 Leases 68,780 898 460 - 70,138 Real estate - commercial Owner occupied general purpose 136,655 3,174 1,224 - 141,053 Owner occupied special purpose 165,945 4,241 366 - 170,552 Non-owner occupied general purpose 215,604 654 1,085 - 217,343 Non-owner occupied special purpose 112,543 - 3,675 - 116,218 Retail Properties 43,535 1,246 1,144 - 45,925 Farm 12,494 1,213 1,305 - 15,012 Real estate - construction Homebuilder 1,947 - - - 1,947 Land 2,870 - - - 2,870 Commercial speculative 31,267 - 69 - 31,336 All other 56,286 894 328 - 57,508 Real estate - residential Investor 59,054 - 843 - 59,897 Multifamily 94,286 - 4,824 - 99,110 Owner occupied 118,320 566 4,935 - 123,821 Revolving and junior liens 113,379 - 1,963 - 115,342 Consumer 2,869 - 9 - 2,878 Other 11,937 - - - 11,937 Total $ 1,486,585 $ 30,577 $ 22,485 $ - $ 1,539,647 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	Six Months Ended As of June 30, 2017 June 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 216 $ 368 $ - $ 128 $ - Leases 220 245 - 293 - Commercial real estate Owner occupied general purpose 460 495 - 1,170 - Owner occupied special purpose 366 510 - 376 - Non-owner occupied general purpose 1,143 1,425 - 1,443 1 Non-owner occupied special purpose - - - 507 - Retail properties 1,144 1,209 - 1,161 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 68 79 - 72 - All other 152 156 - 180 - Residential Investor 1,576 2,065 - 1,708 20 Multifamily 4,824 4,965 - 2,412 - Owner occupied 8,209 9,543 - 9,016 65 Revolving and junior liens 1,971 2,211 - 2,227 15 Consumer 9 9 - 105 - Total impaired loans with no recorded allowance 20,358 23,280 - 20,798 101 With an allowance recorded Commercial - - - - - Leases 240 240 98 120 - 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 - - - 402 - Revolving and junior liens - - - - - Consumer - - - - - Total impaired loans with a recorded allowance 240 240 98 645 - Total impaired loans $ 20,598 $ 23,520 $ 98 $ 21,443 $ 101 Impaired loans by class of loans as of December 31, 2016, and for the six months ended June 30, 2016, were as follows: Six Months Ended As of December 31, 2016 June 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 299 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,494 44 Owner occupied special purpose 385 518 - 650 - Non-owner occupied general purpose 1,744 2,010 - 1,573 1 Non-owner occupied special purpose 1,013 1,649 - - - Retail properties 1,179 1,235 - 1,017 - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 80 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,879 23 Multifamily - - - - - Owner occupied 9,824 11,391 - 10,124 79 Revolving and junior liens 2,484 3,018 - 2,673 6 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 21,425 153 With an allowance recorded Commercial - - - 1 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 306 - Non-owner occupied special purpose - - - 825 - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 222 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 1,377 - Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 22,802 $ 153
Schedule of TDRs modified during the period by type of modification	TDRs that were modified during the period are as follows: TDR Modifications TDR Modifications Quarter Ended June 30, 2017 Six Months Ended June 30, 2017 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - residential Revolving and junior liens Other 1 2 $ 155 $ 147 6 $ 399 $ 388 Total 2 $ 155 $ 147 6 $ 399 $ 388 TDR Modifications TDR Modifications Quarter Ended June 30, 2016 Six Months Ended June 30, 2016 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - commercial Other 1 - $ - $ - 2 $ 312 $ 220 Real estate - residential Owner occupied HAMP 2 - - - 1 239 237 Revolving and junior liens HAMP 2 1 39 39 4 469 438 Total 1 $ 39 $ 39 7 $ 1,020 $ 895 1 Other: Change of terms from bankruptcy court 2 HAMP: Home Affordable Modification Program

Allowance for Loan Losses (Tabl

Allowance for Loan Losses (Tables)	6 Months Ended
	Jun. 30, 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 and six months ended June 30, 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 June 30, 2017 Beginning balance $ 1,672 $ 603 $ 7,831 $ 978 $ 3,056 $ 764 $ 837 $ 15,741 Charge-offs 6 - 4 - 976 80 - 1,066 Recoveries 5 - 46 60 249 46 5 411 Provision (Release) 479 188 234 (181) 247 118 (335) 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Six months ended June 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 7 117 278 4 1,171 180 - 1,757 Recoveries 7 - 81 78 391 121 7 685 Provision (Release) 521 275 (1,243) 394 664 74 65 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Ending balance: Individually evaluated for impairment $ - $ 98 $ - $ - $ - $ - $ - $ 98 Ending balance: Collectively evaluated for impairment $ 2,150 $ 693 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,738 Loans: Ending balance $ 256,760 $ 70,138 $ 706,103 $ 93,661 $ 398,170 $ 2,878 $ 11,937 $ 1,539,647 Ending balance: Individually evaluated for impairment $ 216 $ 460 $ 3,113 $ 220 $ 16,580 $ 9 $ - $ 20,598 Ending balance: Collectively evaluated for impairment $ 256,544 $ 69,678 $ 702,990 $ 93,441 $ 381,590 $ 2,869 $ 11,937 $ 1,519,049 Changes in the allowance for loan losses by segment of loans based on method of impairment for June 30, 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 June 30, 2016 Beginning balance $ 2,173 $ 184 $ 8,793 $ 250 $ 1,664 $ 1,081 $ 2,101 $ 16,246 Charge-offs 8 - 690 - 171 67 - 936 Recoveries 8 - 145 6 290 56 7 512 Provision (Release) (753) 91 706 124 1,150 (208) (1,110) - Ending balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Six months ended June 30, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 19 13 692 - 437 150 - 1,311 Recoveries 12 - 228 11 519 127 13 910 Provision (Release) (614) 233 405 104 1,157 (305) (980) - Ending balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Ending balance: Individually evaluated for impairment $ - $ - $ 752 $ - $ 6 $ - $ - $ 758 Ending balance: Collectively evaluated for impairment $ 1,420 $ 275 $ 8,202 $ 380 $ 2,927 $ 862 $ 998 $ 15,064 Loans: Ending balance $ 127,709 $ 42,013 $ 600,942 $ 22,204 $ 352,595 $ 2,966 $ 12,722 $ 1,161,151 Ending balance: Individually evaluated for impairment $ 528 $ - $ 9,604 $ 78 $ 14,508 $ - $ - $ 24,718 Ending balance: Collectively evaluated for impairment $ 127,181 $ 42,013 $ 591,338 $ 22,126 $ 338,087 $ 2,966 $ 12,722 $ 1,136,433

Other Real Estate Owned (Tables

Other Real Estate Owned (Tables)	6 Months Ended
	Jun. 30, 2017
Other Real Estate Owned
Schedule of activity in the other real estate owned (OREO) portfolio, net of valuation reserve	Quarters Ended Six Months Ended June 30, June 30, Other real estate owned 2017 2016 2017 2016 Balance at beginning of period $ 13,481 $ 17,745 $ 11,916 $ 19,141 Property additions 204 586 3,620 968 Property improvements - - - 12 Less: Proceeds from property disposals, net of gains/losses 1,569 1,590 3,102 2,929 Period valuation adjustments 392 489 710 940 Balance at end of period $ 11,724 $ 16,252 $ 11,724 $ 16,252
Schedule of activity in valuation allowance	Quarters Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Balance at beginning of period $ 9,659 $ 14,399 $ 9,982 $ 14,127 Provision for unrealized losses 392 489 710 940 Reductions taken on sales (1,747) (1,511) (2,388) (1,690) Balance at end of period $ 8,304 $ 13,377 $ 8,304 $ 13,377
Schedule of expenses related to foreclosed assets, net of lease revenue	Quarters Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Gain on sales, net $ (104) $ (25) $ (178) $ (67) Provision for unrealized losses 392 489 710 940 Operating expenses 293 420 816 856 Less: Lease revenue 42 5 100 112 Net OREO expense $ 539 $ 879 $ 1,248 $ 1,617

Deposits (Tables)

Deposits (Tables)	6 Months Ended
	Jun. 30, 2017
Deposits
Schedule of major classifications of deposits	June 30, 2017 December 31, 2016 Noninterest bearing demand $ 546,463 $ 513,688 Savings 265,643 256,159 NOW accounts 429,205 419,417 Money market accounts 276,867 275,273 Certificates of deposit of less than $100,000 221,806 228,993 Certificates of deposit of $100,000 through $250,000 115,279 110,992 Certificates of deposit of more than $250,000 54,882 62,263 Total deposits $ 1,910,145 $ 1,866,785

Borrowings (Tables)

Borrowings (Tables)	6 Months Ended
	Jun. 30, 2017
Borrowings
Summary of borrowings and junior subordinated debentures	June 30, 2017 December 31, 2016 Securities sold under repurchase agreements $ 36,361 $ 25,715 FHLBC advances 1 75,000 70,000 Junior subordinated debentures 57,615 57,591 Senior notes 44,008 43,998 Total borrowings $ 212,984 $ 197,304

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	6 Months Ended
	Jun. 30, 2017
Equity Compensation Plans
Summary of stock option activity in Incentive Plan	A summary of stock option activity in the Plans for the six months ended June 30, 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 0.6 $ - Exercisable at end of period 94,500 $ 25.82 0.6 $ -
Summary of changes in nonvested shares of restricted share rights	June 30, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 158,500 11.02 Vested (91,500) 5.07 Forfeited (1,000) 5.38 Nonvested at June 30 475,000 $ 7.76

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2017
Earnings Per Share
Schedule of Earnings Per Share	Quarters Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,587,095 29,535,915 29,573,881 29,509,672 Net income $ 5,457 $ 3,845 $ 10,029 $ 7,167 Basic earnings per share $ 0.19 $ 0.13 $ 0.34 $ 0.24 Diluted earnings per share: Weighted-average common shares outstanding 29,587,095 29,535,915 29,573,881 29,509,672 Dilutive effect of nonvested restricted awards 1 426,264 305,324 400,232 313,832 Dilutive effect of stock options 2,546 - 2,431 - Diluted average common shares outstanding 30,015,905 29,841,239 29,976,544 29,823,504 Net Income $ 5,457 $ 3,845 $ 10,029 $ 7,167 Diluted earnings per share $ 0.18 $ 0.13 $ 0.33 $ 0.24 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 977,839 900,839 977,839 1 Includes the common stock equivalents for restricted share rights that are dilutive.

Regulatory & Capital Matters (T

Regulatory & Capital Matters (Tables)	6 Months Ended
	Jun. 30, 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 June 30, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 161,114 8.55 % $ 108,352 5.750 % N/A N/A Old Second Bank 234,644 12.46 108,283 5.750 $ 122,407 6.50 % Total capital to risk weighted assets Consolidated 228,754 12.14 174,298 9.250 N/A N/A Old Second Bank 250,475 13.30 174,203 9.250 188,327 10.00 Tier 1 capital to risk weighted assets Consolidated 208,397 11.06 136,607 7.250 N/A N/A Old Second Bank 234,644 12.46 136,530 7.250 150,654 8.00 Tier 1 capital to average assets Consolidated 208,397 9.09 91,704 4.00 N/A N/A Old Second Bank 234,644 10.23 91,747 4.00 114,684 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 216,769 12.29 152,126 8.625 N/A N/A Old Second Bank 237,306 13.45 152,176 8.625 176,436 10.00 Tier 1 capital to risk weighted assets Consolidated 191,988 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 191,988 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 June 30, 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)	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis	June 30, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies mortgage-backed $ - $ 20,846 $ - $ 20,846 States and political subdivisions - 205,170 20,348 225,518 Corporate bonds - 12,616 - 12,616 Collateralized mortgage obligations - 98,235 2,678 100,913 Asset-backed securities - 140,385 - 140,385 Collateralized loan obligations - 67,949 - 67,949 Loans held-for-sale - 5,440 - 5,440 Mortgage servicing rights - - 6,528 6,528 Other assets (Interest rate swap agreements) - 385 - 385 Other assets (Mortgage banking derivatives) - 319 - 319 Total $ - $ 551,345 $ 29,554 $ 580,899 Liabilities: Other liabilities (Interest rate swap agreements, including risk participation agreements) $ - $ 1,843 $ - $ 1,843 Total $ - $ 1,843 $ - $ 1,843 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	Six Months Ended June 30, 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) 23 - (280) Included in other comprehensive income (1) (289) - Purchases, issuances, sales, and settlements Purchases - 10,456 - Issuances - - 601 Settlements (463) (12,045) (282) Ending balance June 30, 2017 $ 2,678 $ 20,348 $ 6,528 Six Months Ended June 30, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ 111 $ 5,847 Transfers out of Level 3 (42) - Total gains or losses Included in earnings (or changes in net assets) - (1,464) Included in other comprehensive income 9 - Purchases, issuances, sales, and settlements Issuances - 625 Settlements (78) (310) Ending balance June 30, 2016 $ - $ 4,698
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 June 30, 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 $ 6,528 Discounted Cash Flow Discount Rate 10.0 - 206.3% 10.2 % Prepayment Speed 7.0 - 68.3% 10.0 % 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 $20.3 million for state and political subdivisions representing various local municipality securities and $2.7 million of collateralized mortgage obligations at June 30, 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 state and political subdivisions securities balance in Level 3 fair value at June 30, 2016, was zero; the securities were transferred to Level 3 in the fourth quarter of 2016. 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	June 30, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 142 $ 142 Other real estate owned, net 2 - - 11,724 11,724 Total $ - $ - $ 11,866 $ 11,866 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 $98,000 resulting in a decrease of specific allocations within the allowance for loan losses of $705,000 for the six months ended June 30, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.7 million, which is made up of the outstanding balance of $21.6 million, net of a valuation allowance of $8.3 million and participations of $1.6 million, at June 30, 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 million for the year ended 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)	6 Months Ended
	Jun. 30, 2017
Fair Values of Financial Instruments
Schedule of carrying amount and estimated fair values of financial instruments	June 30, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 32,614 $ 32,614 $ 32,614 $ - $ - Interest bearing deposits with financial institutions 18,483 18,483 18,483 - - Securities available-for-sale 568,227 568,227 - 545,201 23,026 FHLBC and FRBC Stock 8,593 8,593 - 8,593 - Loans held-for-sale 5,440 5,440 - 5,440 - Loans, net 1,523,811 1,519,216 - - 1,519,216 Accrued interest receivable 7,569 7,569 - 7,569 - Financial liabilities: Noninterest bearing deposits $ 546,463 $ 546,463 $ 546,463 $ - $ - Interest bearing deposits 1,363,682 1,375,085 - 1,375,085 - Securities sold under repurchase agreements 36,361 36,361 - 36,361 - Other short-term borrowings 75,000 75,000 - 75,000 - Junior subordinated debentures 57,615 60,534 33,472 27,062 - Senior notes 44,008 46,258 - 46,258 - Interest rate swap agreements 1,458 1,458 - 1,458 - Borrowing interest payable 89 89 - 89 - Deposit interest payable 611 611 - 611 - 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)	6 Months Ended
	Jun. 30, 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 June 30, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (1,458) (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 $ 101,613 Other Assets $ 385 Other Liabilities $ 385 Interest rate lock commitments and forward contracts 37,142 Other Assets 319 N/A - Total $ 704 $ 385 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	June 30, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 167 $ 3,979 $ 4,146 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 8,315 8,381 83 8,499 8,582 233 12,416 12,649 220 12,672 12,892 Non-borrower: Performance standby - 422 422 95 524 619 Total letters of credit $ 233 $ 12,838 $ 13,071 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Dividend (Details) - USD ($)	Aug. 07, 2017	Jul. 18, 2017
Summary of Significant Accounting Policies
Dividends Payable, Amount Per Share		$ 0.01
Payments of Dividends	$ 296,000

Acquisitions (Details)

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

Securities - Investment Portfol

Securities - Investment Portfolio (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2007
Securities
Available-for-sale Securities	$ 568,227	$ 531,838
FHLB and FRB Stock
FHLBC stock	$ 3,800	$ 3,100
FRB stock			$ 4,800

Securities - Amortized Cost and

Securities - Amortized Cost and Fair Value (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Securities Available-for-Sale
Amortized Cost	$ 571,208		$ 545,433
Gross Unrealized Gains	5,557		1,011
Gross Unrealized Losses	(8,538)		(14,606)
Fair Value	568,227		531,838
Other disclosures
Purchases	205,755	$ 122,700
Sales	100,856	$ 44,993
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	222,098		68,718
Gross Unrealized Gains	4,472		258
Gross Unrealized Losses	(1,052)		(273)
Fair Value	225,518		68,703
Corporate bonds
Securities Available-for-Sale
Amortized Cost	12,807		10,957
Gross Unrealized Gains	58		9
Gross Unrealized Losses	(249)		(336)
Fair Value	12,616		10,630
Collateralized mortgage obligations
Securities Available-for-Sale
Amortized Cost	102,717		174,352
Gross Unrealized Gains	159		374
Gross Unrealized Losses	(1,963)		(3,799)
Fair Value	100,913		170,927
Asset-backed securities
Securities Available-for-Sale
Amortized Cost	144,812		146,391
Gross Unrealized Gains	557		341
Gross Unrealized Losses	(4,984)		(8,325)
Fair Value	140,385		138,407
FFEL
Other disclosures
Asset-backed securities	$ 119,300
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	$ 13,400
Percentage of total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal	10.43
Collateralized loan obligations
Securities Available-for-Sale
Amortized Cost	$ 67,735		102,504
Gross Unrealized Gains	305		29
Gross Unrealized Losses	(91)		(896)
Fair Value	67,949		$ 101,637
U.S. government agency mortgage-backed
Securities Available-for-Sale
Amortized Cost	21,039
Gross Unrealized Gains	6
Gross Unrealized Losses	(199)
Fair Value	20,846
GCO Education Loan Funding Corp
Other disclosures
Additions to total securities portfolio	27,500
Securities pledged to secure deposits and for other purposes	$ 26,000

Securities - Contractural Matur

Securities - Contractural Maturities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Securities Available-for-Sale, Amortized Cost
Due in one year or less	$ 11,600
Due after one year through five years	1,847
Due after five years through ten years	18,178
Due after ten years	203,280
Debt securities excluding securities not due at a single maturity date	234,905
Total	$ 571,208	$ 545,433
Securities Available-for-Sale, Weighted Average Yield
Due in one year or less (as a percent)	2.60%
Due after one year through five years (as a percent)	4.65%
Due after five years through ten years (as a percent)	2.88%
Due after ten years (as a percent)	3.01%
Debt securities (as a percent)	2.99%
Total (as a percent)	2.82%
Securities Available-for-Sale, Fair Value
Due in one year or less	$ 11,636
Due after one year through five years	1,844
Due after five years through ten years	18,202
Due after ten years	206,452
Debt securities	238,134
Fair Value	568,227	531,838
Collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Total	102,717	174,352
Securities Available-for-Sale, Fair Value
Fair Value	100,913	170,927
Asset-backed securities
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	144,812
Total	$ 144,812	146,391
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.21%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 140,385
Fair Value	140,385	138,407
Collateralized loan obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	67,735
Total	$ 67,735	102,504
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	4.01%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 67,949
Fair Value	67,949	$ 101,637
Mortgage-backed and collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 123,756
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.54%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 121,759

Securities - Unrealized Loss Po

Securities - Unrealized Loss Positions (Details) $ in Thousands	Jun. 30, 2017USD ($)security	Dec. 31, 2016USD ($)security
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	25	44
Greater than 12 months in an unrealized loss position | security	19	34
Total | security	44	78
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 3,479	$ 5,143
Greater than 12 months in an unrealized loss position	5,059	9,463
Total	8,538	14,606
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	116,201	216,050
Greater than 12 months in an unrealized loss position	123,663	213,060
Total	$ 239,864	$ 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	8
Greater than 12 months in an unrealized loss position | security	1
Total | security	9
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 178
Greater than 12 months in an unrealized loss position	21
Total	199
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	17,764
Greater than 12 months in an unrealized loss position	805
Total	$ 18,569
States and political subdivisions
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	4	12
Total | security	4	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 1,052	$ 273
Total	1,052	273
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	16,372	35,241
Total	$ 16,372	$ 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	$ 108	$ 183
Greater than 12 months in an unrealized loss position	141	153
Total	249	336
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	4,892	4,817
Greater than 12 months in an unrealized loss position	5,205	5,328
Total	$ 10,097	$ 10,145
Collateralized mortgage obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	10	16
Greater than 12 months in an unrealized loss position | security	4	7
Total | security	14	23
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 1,776	$ 3,402
Greater than 12 months in an unrealized loss position	187	397
Total	1,963	3,799
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	64,987	117,752
Greater than 12 months in an unrealized loss position	10,898	18,109
Total	$ 75,885	$ 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	12	12
Total | security	13	16
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 274	$ 328
Greater than 12 months in an unrealized loss position	4,710	7,997
Total	4,984	8,325
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	4,281	17,604
Greater than 12 months in an unrealized loss position	106,755	107,112
Total	$ 111,036	$ 124,716
Collateralized loan obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	1
Greater than 12 months in an unrealized loss position | security		12
Total | security	1	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 91
Greater than 12 months in an unrealized loss position		$ 896
Total	91	896
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	7,905
Greater than 12 months in an unrealized loss position		81,613
Total	$ 7,905	$ 81,613

Loans - Major Classifications (

Loans - Major Classifications (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Loans
Total loans, gross	$ 1,538,969	$ 1,477,592
Net deferred loan fees	678	1,217
Total Loans	1,539,647	1,478,809	$ 1,161,151
Overdraft
Loans
Total loans, gross	316	436
Other
Loans
Total loans, gross	10,943	11,537
Commercial
Loans
Total loans, gross	256,760	228,113
Total Loans	256,760	228,113	127,709
Real estate - commercial
Loans
Total loans, gross	706,103	736,247
Total Loans	706,103		600,942
Real estate - commercial | Construction Loans
Loans
Total loans, gross	93,661	64,720
Total Loans	93,661		22,204
Real estate - residential
Loans
Total loans, gross	398,170	377,851
Total Loans	398,170		352,595
Consumer
Loans
Total loans, gross	2,878	3,237
Total Loans	2,878	3,237	2,966
Lease financing receivables
Loans
Total loans, gross	70,138	55,451
Total Loans	$ 70,138	$ 55,451	$ 42,013

Loans - Major Classifications -

Loans - Major Classifications - Loan Concentrations (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 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	77.80%
Talmer
Loans
Loans			$ 221

Loans - Aging Analysis (Details

Loans - Aging Analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Aged analysis of past due loans
Total Past Due	$ 6,088	$ 5,139
Current	1,518,876	1,458,387
Nonaccrual	14,683	15,283
Total Loans	1,539,647	1,478,809	$ 1,161,151
30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	5,640	3,959
60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	448	1,180
Multifamily
Aged analysis of past due loans
Total Past Due	1,390
Current	92,896	96,502
Nonaccrual	4,824
Total Loans	99,110	96,502
Multifamily | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	1,390
Commercial
Aged analysis of past due loans
Total Past Due	21	131
Current	256,523	227,742
Nonaccrual	216	240
Total Loans	256,760	228,113	127,709
Commercial | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	21	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	898	286
Current	68,780	54,799
Nonaccrual	460	366
Total Loans	70,138	55,451	42,013
Lease financing receivables | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	898
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	706,103		600,942
Real estate - commercial | Owner occupied general purpose
Aged analysis of past due loans
Total Past Due	629	758
Current	139,964	135,599
Nonaccrual	460	879
Total Loans	141,053	137,236
Real estate - commercial | Owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	629	758
Real estate - commercial | Owner occupied special purpose
Aged analysis of past due loans
Current	170,186	177,755
Nonaccrual	366	385
Total Loans	170,552	178,140
Real estate - commercial | Non-owner occupied general purpose
Aged analysis of past due loans
Total Past Due	835	1,046
Current	215,423	229,315
Nonaccrual	1,085	1,930
Total Loans	217,343	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	835	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	116,218	118,052
Nonaccrual		1,013
Total Loans	116,218	119,065
Real estate - commercial | Retail properties
Aged analysis of past due loans
Current	44,781	53,474
Nonaccrual	1,144	1,179
Total Loans	45,925	54,653
Real estate - commercial | Farm
Aged analysis of past due loans
Total Past Due	1,305	1,353
Current	13,707	13,509
Total Loans	15,012	14,862
Real estate - commercial | Farm | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	1,305	1,353
Real estate - residential
Aged analysis of past due loans
Total Loans	398,170		352,595
Real estate - residential | Investor
Aged analysis of past due loans
Total Past Due	98	237
Current	59,113	54,924
Nonaccrual	686	936
Total Loans	59,897	56,097
Real estate - residential | Investor | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	3	237
Real estate - residential | Investor | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	95
Real estate - residential | Owner occupied
Aged analysis of past due loans
Total Past Due	279	274
Current	119,355	116,900
Nonaccrual	4,187	6,452
Total Loans	123,821	123,626
Real estate - residential | Owner occupied | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		274
Real estate - residential | Owner occupied | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	279
Real estate - residential | Revolving and junior liens
Aged analysis of past due loans
Total Past Due	631	630
Current	113,685	99,374
Nonaccrual	1,026	1,622
Total Loans	115,342	101,626
Real estate - residential | Revolving and junior liens | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	557	225
Real estate - residential | Revolving and junior liens | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	74	405
Consumer
Aged analysis of past due loans
Total Past Due	2	46
Current	2,867	3,191
Nonaccrual	9
Total Loans	2,878	3,237	2,966
Consumer | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	2	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	11,937	13,176
Total Loans	11,937	13,190	12,722
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	93,661		$ 22,204
Construction Loans | Real estate - commercial | Homebuilder
Aged analysis of past due loans
Current	1,947	3,883
Total Loans	1,947	3,883
Construction Loans | Real estate - commercial | Land
Aged analysis of past due loans
Current	2,870	3,029
Total Loans	2,870	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Aged analysis of past due loans
Current	31,268	22,654
Nonaccrual	68	74
Total Loans	31,336	22,728
Construction Loans | Real estate - commercial | All other
Aged analysis of past due loans
Total Past Due		364
Current	57,356	34,509
Nonaccrual	152	207
Total Loans	$ 57,508	35,080
Construction Loans | Real estate - commercial | All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		$ 364

Loans - Inclusion (Details)

Loans - Inclusion (Details)	6 Months Ended
	Jun. 30, 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	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Loans by risk rating
Total Loans	$ 1,539,647	$ 1,478,809	$ 1,161,151
Multifamily
Loans by risk rating
Total Loans	99,110	96,502
Commercial
Loans by risk rating
Total Loans	256,760	228,113	127,709
Lease financing receivables
Loans by risk rating
Total Loans	70,138	55,451	42,013
Real estate - commercial
Loans by risk rating
Total Loans	706,103		600,942
Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	141,053	137,236
Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	170,552	178,140
Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	217,343	232,291
Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	116,218	119,065
Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	45,925	54,653
Real estate - commercial | Farm
Loans by risk rating
Total Loans	15,012	14,862
Real estate - residential
Loans by risk rating
Total Loans	398,170		352,595
Real estate - residential | Investor
Loans by risk rating
Total Loans	59,897	56,097
Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	123,821	123,626
Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	115,342	101,626
Consumer
Loans by risk rating
Total Loans	2,878	3,237	2,966
All other
Loans by risk rating
Total Loans	11,937	13,190	12,722
Pass
Loans by risk rating
Total Loans	1,486,585	1,430,321
Pass | Multifamily
Loans by risk rating
Total Loans	94,286	96,502
Pass | Commercial
Loans by risk rating
Total Loans	238,814	214,028
Pass | Lease financing receivables
Loans by risk rating
Total Loans	68,780	53,366
Pass | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	136,655	135,503
Pass | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	165,945	172,353
Pass | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	215,604	229,448
Pass | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	112,543	114,293
Pass | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	43,535	52,207
Pass | Real estate - commercial | Farm
Loans by risk rating
Total Loans	12,494	11,840
Pass | Real estate - residential | Investor
Loans by risk rating
Total Loans	59,054	55,001
Pass | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	118,320	115,831
Pass | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	113,379	99,286
Pass | Consumer
Loans by risk rating
Total Loans	2,869	3,236
Pass | All other
Loans by risk rating
Total Loans	11,937	13,165
Special Mention
Loans by risk rating
Total Loans	30,577	22,004
Special Mention | Commercial
Loans by risk rating
Total Loans	17,691	11,558
Special Mention | Lease financing receivables
Loans by risk rating
Total Loans	898	976
Special Mention | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	3,174	53
Special Mention | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	4,241	5,402
Special Mention | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	654	913
Special Mention | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,246	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	566	570
Special Mention | All other
Loans by risk rating
Total Loans		25
Substandard
Loans by risk rating
Total Loans	22,485	26,484
Substandard | Multifamily
Loans by risk rating
Total Loans	4,824
Substandard | Commercial
Loans by risk rating
Total Loans	255	2,527
Substandard | Lease financing receivables
Loans by risk rating
Total Loans	460	1,109
Substandard | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	1,224	1,680
Substandard | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	366	385
Substandard | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	1,085	1,930
Substandard | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	3,675	4,772
Substandard | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,144	1,179
Substandard | Real estate - commercial | Farm
Loans by risk rating
Total Loans	1,305	1,782
Substandard | Real estate - residential | Investor
Loans by risk rating
Total Loans	843	1,096
Substandard | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	4,935	7,225
Substandard | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	1,963	2,340
Substandard | Consumer
Loans by risk rating
Total Loans	9	1
Construction Loans | Real estate - commercial
Loans by risk rating
Total Loans	93,661		$ 22,204
Construction Loans | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	1,947	3,883
Construction Loans | Real estate - commercial | Land
Loans by risk rating
Total Loans	2,870	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	31,336	22,728
Construction Loans | Real estate - commercial | All other
Loans by risk rating
Total Loans	57,508	35,080
Construction Loans | Pass | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	1,947	3,883
Construction Loans | Pass | Real estate - commercial | Land
Loans by risk rating
Total Loans	2,870	3,029
Construction Loans | Pass | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	31,267	22,654
Construction Loans | Pass | Real estate - commercial | All other
Loans by risk rating
Total Loans	56,286	34,696
Construction Loans | Special Mention | Real estate - commercial | All other
Loans by risk rating
Total Loans	894
Construction Loans | Substandard | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	69	74
Construction Loans | Substandard | Real estate - commercial | All other
Loans by risk rating
Total Loans	$ 328	$ 384

Loans - Repossessed Assets (Det

Loans - Repossessed Assets (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	$ 991,000
Other real estate owned	11,724,000	$ 13,481,000	$ 11,916,000	$ 16,252,000	$ 17,745,000	$ 19,141,000
Real estate - residential
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	991,000,000,000		1,800,000
Other real estate owned	$ 986,000		$ 225,000

Loans - Impaired Loans - Record

Loans - Impaired Loans - Recorded Investment, Unpaid Principal Balance and Related Allowance (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Recorded Investment
With no related allowance recorded	$ 20,358	$ 21,238
With an allowance recorded	240	1,049
Total impaired loans	20,598	22,287
Unpaid Principal Balance
With no related allowance recorded	23,280	25,321
With an allowance recorded	240	1,448
Total impaired loans	23,520	26,769
Related Allowance
With an allowance recorded	98	1,049
Commercial
Recorded Investment
With no related allowance recorded	216	240
Unpaid Principal Balance
With no related allowance recorded	368	388
Lease financing receivables
Recorded Investment
With no related allowance recorded	220	366
With an allowance recorded	240
Unpaid Principal Balance
With no related allowance recorded	245	371
With an allowance recorded	240
Related Allowance
With an allowance recorded	98
Real estate - commercial | Owner occupied general purpose
Recorded Investment
With no related allowance recorded	460	1,881
Unpaid Principal Balance
With no related allowance recorded	495	2,131
Real estate - commercial | Owner occupied special purpose
Recorded Investment
With no related allowance recorded	366	385
Unpaid Principal Balance
With no related allowance recorded	510	518
Real estate - commercial | Non-owner occupied general purpose
Recorded Investment
With no related allowance recorded	1,143	1,744
With an allowance recorded		246
Unpaid Principal Balance
With no related allowance recorded	1,425	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	1,144	1,179
Unpaid Principal Balance
With no related allowance recorded	1,209	1,235
Real estate - residential | Investor
Recorded Investment
With no related allowance recorded	1,576	1,841
Unpaid Principal Balance
With no related allowance recorded	2,065	2,308
Real estate - residential | Multifamily
Recorded Investment
With no related allowance recorded	4,824
Unpaid Principal Balance
With no related allowance recorded	4,965
Real estate - residential | Owner occupied
Recorded Investment
With no related allowance recorded	8,209	9,824
With an allowance recorded		803
Unpaid Principal Balance
With no related allowance recorded	9,543	11,391
With an allowance recorded		853
Related Allowance
With an allowance recorded		803
Real estate - residential | Revolving and junior liens
Recorded Investment
With no related allowance recorded	1,971	2,484
Unpaid Principal Balance
With no related allowance recorded	2,211	3,018
Consumer
Recorded Investment
With no related allowance recorded	9
Unpaid Principal Balance
With no related allowance recorded	9
Construction Loans | Real estate - commercial | Commercial speculative
Recorded Investment
With no related allowance recorded	68	74
Unpaid Principal Balance
With no related allowance recorded	79	81
Construction Loans | Real estate - commercial | All other
Recorded Investment
With no related allowance recorded	152	207
Unpaid Principal Balance
With no related allowance recorded	$ 156	$ 221

Loans - Impaired Loans - Averag

Loans - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Average Recorded Investment
With no related allowance recorded	$ 20,798	$ 21,425
With an allowance recorded	645	1,377
Total impaired loans	21,443	22,802
Interest Income Recognized
With no related allowance recorded	101	153
Total impaired loans	101	153
Commercial
Average Recorded Investment
With no related allowance recorded	128	299
With an allowance recorded		1
Lease financing receivables
Average Recorded Investment
With no related allowance recorded	293
With an allowance recorded	120
Real estate - commercial | Owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,170	2,494
Interest Income Recognized
With no related allowance recorded		44
Real estate - commercial | Owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	376	650
Real estate - commercial | Non-owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,443	1,573
With an allowance recorded	123	306
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	507
With an allowance recorded		825
Real estate - commercial | Retail properties
Average Recorded Investment
With no related allowance recorded	1,161	1,017
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	1,708	1,879
Interest Income Recognized
With no related allowance recorded	20	23
Real estate - residential | Multifamily
Average Recorded Investment
With no related allowance recorded	2,412
Real estate - residential | Owner occupied
Average Recorded Investment
With no related allowance recorded	9,016	10,124
With an allowance recorded	402	222
Interest Income Recognized
With no related allowance recorded	65	79
Real estate - residential | Revolving and junior liens
Average Recorded Investment
With no related allowance recorded	2,227	2,673
With an allowance recorded		23
Interest Income Recognized
With no related allowance recorded	15	6
Consumer
Average Recorded Investment
With no related allowance recorded	105
Construction Loans | Real estate - commercial | Commercial speculative
Average Recorded Investment
With no related allowance recorded	72	$ 80
Construction Loans | Real estate - commercial | All other
Average Recorded Investment
With no related allowance recorded	$ 180

Loans - TDR (Details)

Loans - TDR (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)contract	Jun. 30, 2016USD ($)contract	Jun. 30, 2017USD ($)contract	Jun. 30, 2016USD ($)contract	Dec. 31, 2016USD ($)
Troubled debt restructurings - modified during the period
# of contracts | contract	2		6	7
Pre-modification recorded investment	$ 155,000	$ 39,000	$ 399,000	$ 1,020,000
Post-modification recorded investment	147,000	$ 39,000	388,000	895,000
TDR's defaulted
# of contracts | contract		1
Pre-modification outstanding recorded investment during the period			0	$ 0
Other information
Total Past Due	$ 6,088,000		$ 6,088,000		$ 5,139,000
Other
Troubled debt restructurings - modified during the period
# of contracts | contract	2		6
Pre-modification recorded investment	$ 155,000		$ 399,000
Post-modification recorded investment	147,000		388,000
HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract				4
Pre-modification recorded investment		$ 39,000		$ 469,000
Post-modification recorded investment		$ 39,000		$ 438,000
TDR's defaulted
# of contracts | contract		1
Real estate - commercial | Other
Troubled debt restructurings - modified during the period
# of contracts | contract				2
Pre-modification recorded investment				$ 312,000
Post-modification recorded investment				$ 220,000
Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	629,000		629,000		758,000
Real estate - commercial | Non-owner occupied general purpose
Other information
Total Past Due	835,000		835,000		1,046,000
Real estate - residential | Investor
Other information
Total Past Due	98,000		98,000		237,000
Real estate - residential | Owner occupied
Other information
Total Past Due	279,000		279,000		274,000
Real estate - residential | Owner occupied | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract				1
Pre-modification recorded investment				$ 239,000
Post-modification recorded investment				$ 237,000
Real estate - residential | Revolving and junior liens
Other information
Total Past Due	631,000		631,000		630,000
Commercial
Other information
Total Past Due	$ 21,000		$ 21,000		$ 131,000

Allowance for Loan Losses (Deta

Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Allowance for loan losses:
Beginning Balance	$ 15,741	$ 16,246	$ 16,158	$ 16,223
Charge-offs	1,066	936	1,757	1,311
Recoveries	411	512	685	910
Provision (release)	750		750
Ending Balance	15,836	15,822	15,836	15,822
Ending balance: Individually evaluated for impairment	98	758	98	758
Ending balance: Collectively evaluated for impairment	15,738	15,064	15,738	15,064
Loans:
Ending balance	1,539,647	1,161,151	1,539,647	1,161,151	$ 1,478,809
Ending balance: Individually evaluated for impairment	20,598	24,718	20,598	24,718
Ending balance: Collectively evaluated for impairment	1,519,049	1,136,433	1,519,049	1,136,433
Commercial
Allowance for loan losses:
Beginning Balance	1,672	2,173	1,629	2,041
Charge-offs	6	8	7	19
Recoveries	5	8	7	12
Provision (release)	479	(753)	521	(614)
Ending Balance	2,150	1,420	2,150	1,420
Ending balance: Collectively evaluated for impairment	2,150	1,420	2,150	1,420
Loans:
Ending balance	256,760	127,709	256,760	127,709	228,113
Ending balance: Individually evaluated for impairment	216	528	216	528
Ending balance: Collectively evaluated for impairment	256,544	127,181	256,544	127,181
Lease financing receivables
Allowance for loan losses:
Beginning Balance	603	184	633	55
Charge-offs			117	13
Provision (release)	188	91	275	233
Ending Balance	791	275	791	275
Ending balance: Individually evaluated for impairment	98		98
Ending balance: Collectively evaluated for impairment	693	275	693	275
Loans:
Ending balance	70,138	42,013	70,138	42,013	55,451
Ending balance: Individually evaluated for impairment	460		460
Ending balance: Collectively evaluated for impairment	69,678	42,013	69,678	42,013
Real estate - commercial
Allowance for loan losses:
Beginning Balance	7,831	8,793	9,547	9,013
Charge-offs	4	690	278	692
Recoveries	46	145	81	228
Provision (release)	234	706	(1,243)	405
Ending Balance	8,107	8,954	8,107	8,954
Ending balance: Individually evaluated for impairment		752		752
Ending balance: Collectively evaluated for impairment	8,107	8,202	8,107	8,202
Loans:
Ending balance	706,103	600,942	706,103	600,942
Ending balance: Individually evaluated for impairment	3,113	9,604	3,113	9,604
Ending balance: Collectively evaluated for impairment	702,990	591,338	702,990	591,338
Real estate - residential
Allowance for loan losses:
Beginning Balance	3,056	1,664	2,692	1,694
Charge-offs	976	171	1,171	437
Recoveries	249	290	391	519
Provision (release)	247	1,150	664	1,157
Ending Balance	2,576	2,933	2,576	2,933
Ending balance: Individually evaluated for impairment		6		6
Ending balance: Collectively evaluated for impairment	2,576	2,927	2,576	2,927
Loans:
Ending balance	398,170	352,595	398,170	352,595
Ending balance: Individually evaluated for impairment	16,580	14,508	16,580	14,508
Ending balance: Collectively evaluated for impairment	381,590	338,087	381,590	338,087
Consumer
Allowance for loan losses:
Beginning Balance	764	1,081	833	1,190
Charge-offs	80	67	180	150
Recoveries	46	56	121	127
Provision (release)	118	(208)	74	(305)
Ending Balance	848	862	848	862
Ending balance: Collectively evaluated for impairment	848	862	848	862
Loans:
Ending balance	2,878	2,966	2,878	2,966	3,237
Ending balance: Individually evaluated for impairment	9		9
Ending balance: Collectively evaluated for impairment	2,869	2,966	2,869	2,966
All other
Allowance for loan losses:
Beginning Balance	837	2,101	435	1,965
Recoveries	5	7	7	13
Provision (release)	(335)	(1,110)	65	(980)
Ending Balance	507	998	507	998
Ending balance: Collectively evaluated for impairment	507	998	507	998
Loans:
Ending balance	11,937	12,722	11,937	12,722	$ 13,190
Ending balance: Collectively evaluated for impairment	11,937	12,722	11,937	12,722
Construction Loans | Real estate - commercial
Allowance for loan losses:
Beginning Balance	978	250	389	265
Charge-offs			4
Recoveries	60	6	78	11
Provision (release)	(181)	124	394	104
Ending Balance	857	380	857	380
Ending balance: Collectively evaluated for impairment	857	380	857	380
Loans:
Ending balance	93,661	22,204	93,661	22,204
Ending balance: Individually evaluated for impairment	220	78	220	78
Ending balance: Collectively evaluated for impairment	$ 93,441	$ 22,126	$ 93,441	$ 22,126

Other Real Estate Owned (Detail

Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Activity in the other real estate owned (OREO) portfolio, net of valuation reserve
Balance at beginning of period	$ 13,481	$ 17,745	$ 11,916	$ 19,141
Property additions	204	586	3,620	968
Property improvements				12
Less: Property disposals, net of gains/losses	1,569	1,590	3,102	2,929
Less: Period valuation adjustments	392	489	710	940
Balance at end of period	11,724	16,252	11,724	16,252
Activity in the valuation allowance
Balance at beginning of period	9,659	14,399	9,982	14,127
Provision for unrealized losses	392	489	710	940
Reductions taken on sales	(1,747)	(1,511)	(2,388)	(1,690)
Balance at end of period	8,304	13,377	8,304	13,377
Expenses related to foreclosed assets, net of lease revenue
Gain on sales, net	(104)	(25)	(178)	(67)
Provision for unrealized losses	392	489	710	940
Operating expenses	293	420	816	856
Less: Lease revenue	42	5	100	112
Expenses related to OREO, net of lease revenue	$ 539	$ 879	$ 1,248	$ 1,617

Deposits - Components and Matur

Deposits - Components and Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Deposits
Noninterest bearing demand	$ 546,463	$ 513,688
Savings	265,643	256,159
NOW accounts	429,205	419,417
Money market accounts	276,867	275,273
Certificates of deposit of less than $100,000	221,806	228,993
Certificates of deposit of $100,000 up to $250,000	115,279	110,992
Certificates of deposit of $250,000 or more	54,882	62,263
Total deposits	$ 1,910,145	$ 1,866,785

Borrowings - Summary (Details)

Borrowings - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Borrowings
Total borrowings	$ 212,984	$ 197,304
Securities sold under repurchase agreements
Borrowings
Total borrowings	36,361	25,715
FHLBC advances
Borrowings
Total borrowings	75,000	70,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,615	$ 57,591

Borrowings - Additional informa

Borrowings - Additional information (Details)	3 Months Ended	6 Months Ended
	Dec. 31, 2016USD ($)	Jun. 30, 2017USD ($)item
Borrowings
Semi annual interest rate	5.75%
Bank owned FHLBC stock	$ 3,100,000	$ 3,800,000
Subordinated Debt.	45,000,000
Senior debt	500,000
Senior notes issuance and cash on hand	45,000,000
Senior notes	$ 43,998,000	44,008,000
Debt Instrument, Term	10 years
Interest rate term	5 years
Senior note debt issuance costs	$ 1,000,000
Total borrowings	$ 197,304,000	212,984,000
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	$ 25,700,000	36,400,000
Fair value of the pledged collateral	43,000,000	$ 44,400,000
Number of customers having secured balances exceeding specified percentage of stockholders equity | item		0
Total borrowings	25,715,000	$ 36,361,000
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	70,000,000	$ 75,000,000
Bank owned FHLBC stock		3,800,000
Fair value of securities collateralized		100,000,000
Principal balance of loans collateralized		176,700,000
Combined collateral value		205,600,000
Amount available for additional borrowings		94,300,000
Total borrowings	70,000,000	75,000,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,591,000	$ 57,615,000

Junior Subordinated Debentures

Junior Subordinated Debentures - Issuance (Details) - USD ($) $ in Thousands	1 Months Ended				6 Months Ended
	Jun. 30, 2017	Apr. 30, 2007	Jul. 31, 2003	Jun. 30, 2003	Jun. 30, 2017	Dec. 31, 2016
Junior subordinated debentures
Junior subordinated debentures	$ 57,615				$ 57,615	$ 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 rate of trust preferred securities (as a percent)	4.34%
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				$ 32,600
Junior subordinated debentures | Old Second Capital Trust II
Junior subordinated debentures
Junior subordinated debentures	$ 25,800				$ 25,800

Equity Compensation Plans - Opt

Equity Compensation Plans - Options (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Total compensation cost			$ 645,000	$ 325,000
2014 Plan
Equity Compensation Plans
Number of shares authorized					975,000	600,000	375,000
Stock options
Equity Compensation Plans
Granted (in shares)	0	0
Term of stock options granted			10 years
Total unrecognized compensation cost	$ 0		$ 0
Shares
Beginning outstanding (in shares)			94,500
Ending outstanding (in shares)	94,500		94,500
Exercisable at end of period (in shares)	94,500		94,500
Weighted Average Exercise Price
Beginning outstanding (in dollars per share)			$ 25.82
Ending outstanding (in dollars per share)	$ 25.82		25.82
Exercisable at end of period (in dollars per share)	$ 25.82		$ 25.82
Weighted Average Remaining Contractual Term (years)
Ending outstanding (in years)			7 months 6 days
Exercisable at end of period			7 months 6 days

Equity Compensation Plans - Sum

Equity Compensation Plans - Summary of stock option activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Stock based compensation	$ 625	$ 325
2014 Plan
Equity Compensation Plans
Number of shares authorized			975,000	600,000	375,000
Number of shares issuable	443,209

Equity Compensation Plans - Res

Equity Compensation Plans - Restricted Stock and RSUs (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 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)	158,500	120,000
Vested (in shares)	(91,500)
Forfeited (in shares)	(1,000)
Nonvested at the end of the period (in shares)	475,000
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 5.89
Granted (in dollars per share)	11.02
Vested (in dollars per share)	5.07
Forfeited (in dollars per share)	5.38
Nonvested at the end of the period (in dollars per share)	$ 7.76
Additional information
Total unrecognized compensation cost of restricted awards	$ 2.3	$ 1.2
Expected weighted-average period for recognition of unrecognized compensation	2 years 3 months 22 days	2 years 1 month 28 days

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Basic earnings per share:
Weighted-average common shares outstanding		29,587,095	29,535,915	29,573,881	29,509,672
Net income	$ 5,457	$ 5,457	$ 3,845	$ 10,029	$ 7,167
Basic earnings per share (in dollars per share)	$ 0.19	$ 0.19	$ 0.13	$ 0.34	$ 0.24
Diluted earnings per share:
Weighted-average common shares outstanding		29,587,095	29,535,915	29,573,881	29,509,672
Diluted average common shares outstanding		30,015,905	29,841,239	29,976,544	29,823,504
Diluted earnings per share (in dollars per share)	$ 0.18	$ 0.18	$ 0.13	$ 0.33	$ 0.24
Antidilutive options and warrants
Diluted earnings per share:
Dilutive effect of nonvested restricted awards (in shares)		2,546		2,431
One 10 year warrant	900,839		977,839	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	$ 13.43	$ 13.43
Restricted stock and restricted stock units
Diluted earnings per share:
Dilutive effect of nonvested restricted awards (in shares)		426,264	305,324	400,232	313,832

Regulatory & Capital Matters (D

Regulatory & Capital Matters (Details)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	9.09%	8.90%
Risk-based capital ratio (as a percent)	12.14%	12.29%
Old Second National Bank
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	10.23%	10.24%
Risk-based capital ratio (as a percent)	13.30%	13.45%
Tier One leverage ratio, basis point increase (as a percent)	0.01%
Risk-based capital ratio, basis point decrease (as a percent)	0.15%
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	Jun. 30, 2017	Dec. 31, 2016
Common equity tier 1 capital to risk weighted assets
Actual	$ 161,114	$ 154,537
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 108,352	$ 90,411
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	8.55%	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	$ 228,754	$ 216,769
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 174,298	$ 152,126
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	12.14%	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	$ 208,397	$ 191,988
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 136,607	$ 116,904
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	11.06%	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	$ 208,397	$ 191,988
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 91,704	$ 86,287
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	9.09%	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	$ 234,644	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	108,283	90,456
Minimum Required to Be Well Capitalized	$ 122,407	$ 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	$ 250,475	$ 237,306
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	174,203	152,176
Minimum Required to Be Well Capitalized	$ 188,327	$ 176,436
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	13.30%	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	$ 234,644	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	136,530	116,930
Minimum Required to Be Well Capitalized	$ 150,654	$ 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	$ 234,644	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	91,747	86,388
Minimum Required to Be Well Capitalized	$ 114,684	$ 107,985
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	10.23%	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	6 Months Ended
	Jun. 30, 2017	Jun. 30, 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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 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	568,227,000		$ 568,227,000		$ 531,838,000
Mortgage servicing rights	6,528,000		6,528,000		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	20,846,000		20,846,000
States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Purchases			10,456,000
Assets:
Securities available-for-sale	225,518,000		225,518,000		68,703,000
Corporate bonds
Assets:
Securities available-for-sale	12,616,000		12,616,000		10,630,000
Collateralized mortgage obligations
Assets:
Securities available-for-sale	100,913,000		100,913,000		170,927,000
Asset-backed securities
Assets:
Securities available-for-sale	140,385,000		140,385,000		138,407,000
Collateralized loan obligations
Assets:
Securities available-for-sale	67,949,000		67,949,000		101,637,000
Level 2
Assets:
Securities available-for-sale	545,201,000		545,201,000		506,493,000
Loans held-for-sale	5,440,000		5,440,000		4,918,000
Liabilities:
Other liabilities	1,458,000		1,458,000		994,000
Level 3
Assets and liabilities measured at fair value on a recurring basis
Purchases				$ 0
Assets:
Securities available-for-sale	23,026,000		23,026,000		25,345,000
Recurring
Assets:
Total financial assets	580,899,000		580,899,000		544,205,000
Liabilities:
Total	1,843,000		1,843,000		1,667,000
Recurring | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	5,440,000		5,440,000		4,918,000
Mortgage servicing rights	6,528,000		6,528,000		6,489,000
Recurring | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,843,000		1,843,000		1,667,000
Recurring | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	385,000		385,000		673,000
Recurring | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	319,000		319,000		287,000
Recurring | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	20,846,000		20,846,000		41,534,000
Recurring | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	225,518,000		225,518,000		68,703,000
Recurring | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,616,000		12,616,000		10,630,000
Recurring | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	100,913,000		100,913,000		170,927,000
Recurring | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	140,385,000		140,385,000		138,407,000
Recurring | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	67,949,000		67,949,000		101,637,000
Recurring | Level 2
Assets:
Total financial assets	551,345,000		551,345,000		512,371,000
Liabilities:
Total	1,843,000		1,843,000		1,667,000
Recurring | Level 2 | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	5,440,000		5,440,000		4,918,000
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,843,000		1,843,000		1,667,000
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	385,000		385,000		673,000
Recurring | Level 2 | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	319,000		319,000		287,000
Recurring | Level 2 | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	20,846,000		20,846,000		41,534,000
Recurring | Level 2 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	205,170,000		205,170,000		46,477,000
Recurring | Level 2 | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,616,000		12,616,000		10,630,000
Recurring | Level 2 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	98,235,000		98,235,000		167,808,000
Recurring | Level 2 | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	140,385,000		140,385,000		138,407,000
Recurring | Level 2 | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	67,949,000		67,949,000		101,637,000
Recurring | Level 3
Assets:
Total financial assets	29,554,000		29,554,000		31,834,000
Recurring | Level 3 | Finite-Lived Intangible Assets [Member]
Assets:
Mortgage servicing rights	6,528,000		6,528,000		6,489,000
Recurring | Level 3 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	20,348,000		20,348,000		22,226,000
Recurring | Level 3 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	$ 2,678,000		$ 2,678,000		$ 3,119,000

Fair Value Measurements - Chang

Fair Value Measurements - Changes in Level 3 (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Collateralized loan obligations
Changes in Level 3
Beginning balance	$ 3,119
Total gains or losses
Included in other comprehensive income	(1)
Purchases, issuances, sales, and settlements
Settlements	(463)
Ending balance	2,678
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	23
States and political subdivisions
Changes in Level 3
Beginning balance	22,226	$ 111
Total gains or losses
Included in other comprehensive income	(289)	9
Purchases, issuances, sales, and settlements
Purchases	10,456
Settlements	(12,045)	(78)
Ending balance	20,348	0
Transfers out of Level 3		(42)
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)		(1,464)
Purchases, issuances, sales, and settlements
Issuances	601	625
Settlements	(282)	(310)
Ending balance	6,528	$ 4,698
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	$ (280)

Fair Value Measurements - Quant

Fair Value Measurements - Quantitative and Qualitative Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 6,528,000	$ 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	6,528,000	$ 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)	7.00%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Maximum
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 206.3	17
Discount rate (as a percent)	68.30%
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)	10.00%

Fair Value Measurements - Nonre

Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Assets and liabilities measured at fair value
Valuation allowance	$ 98	$ 1,049
Carrying value of other real estate owned	11,724	11,916	$ 13,481	$ 16,252	$ 17,745	$ 19,141
OREO Valuation allowance	8,304	9,982	$ 9,659	$ 13,377	$ 14,399	$ 14,127
Nonrecurring
Assets and liabilities measured at fair value
Total	11,866	11,916
Nonrecurring | Impaired loans
Assets and liabilities measured at fair value
Total	142
Valuation allowance	98	1,000
Increase (decrease) of specific allocations within the provision for loan losses	705	1,000
Nonrecurring | Other real estate owned
Assets and liabilities measured at fair value
Total	11,724	11,916
Carrying value of other real estate owned	11,700	11,900
Outstanding balance	21,600	23,500
OREO Valuation allowance	8,300	10,000
OREO participations	1,600	1,600
Nonrecurring | Level 3
Assets and liabilities measured at fair value
Total	11,866	11,916
Nonrecurring | Level 3 | Impaired loans
Assets and liabilities measured at fair value
Total	142
Nonrecurring | Level 3 | Other real estate owned
Assets and liabilities measured at fair value
Total	$ 11,724	$ 11,916

Fair Values of Financial Inst68

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financial assets:
Cash and due from banks	$ 32,614	$ 33,805
Interest bearing deposits with financial institutions	18,483	13,529
Securities available-for-sale	568,227	531,838
FHLBC and FRBC Stock	8,593	7,918
Bank-owned life insurance	61,041	60,332
Financial liabilities:
Noninterest bearing deposits	546,463	513,688
Other short-term borrowings	75,000	70,000
Junior subordinated debentures	57,615	57,591
Carrying Amount
Financial assets:
Cash and due from banks	32,614	33,805
Interest bearing deposits with financial institutions	18,483	13,529
Securities available-for-sale	568,227	531,838
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	5,440	4,918
Loans, net	1,523,811	1,462,651
Accrued interest receivable	7,569	5,928
Financial liabilities:
Noninterest bearing deposits	546,463	513,688
Interest bearing deposits	1,363,682	1,353,097
Securities sold under repurchase agreements	36,361	25,715
Other short-term borrowings	75,000	70,000
Junior subordinated debentures	57,615	57,591
Subordinated debenture	44,008	43,998
Interest rate swap	1,458	994
Borrowing interest payable	89	202
Deposit interest payable	611	599
Total Fair Value
Financial assets:
Cash and due from banks	32,614	33,805
Interest bearing deposits with financial institutions	18,483	13,529
Securities available-for-sale	568,227	531,838
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	5,440	4,918
Loans, net	1,519,216	1,453,429
Accrued interest receivable	7,569	5,928
Financial liabilities:
Noninterest bearing deposits	546,463	513,688
Interest bearing deposits	1,375,085	1,351,000
Securities sold under repurchase agreements	36,361	25,715
Other short-term borrowings	75,000	70,000
Junior subordinated debentures	60,534	55,163
Subordinated debenture	46,258	43,998
Interest rate swap	1,458	994
Borrowing interest payable	89	202
Deposit interest payable	611	599
Level 1
Financial assets:
Cash and due from banks	32,614	33,805
Interest bearing deposits with financial institutions	18,483	13,529
Financial liabilities:
Noninterest bearing deposits	546,463	513,688
Junior subordinated debentures	33,472	32,404
Level 2
Financial assets:
Securities available-for-sale	545,201	506,493
FHLBC and FRBC Stock	8,593	7,918
Loans held for sale	5,440	4,918
Accrued interest receivable	7,569	5,928
Financial liabilities:
Interest bearing deposits	1,375,085	1,351,000
Securities sold under repurchase agreements	36,361	25,715
Other short-term borrowings	75,000	70,000
Junior subordinated debentures	27,062	22,759
Subordinated debenture	46,258	43,998
Interest rate swap	1,458	994
Borrowing interest payable	89	202
Deposit interest payable	611	599
Level 3
Financial assets:
Securities available-for-sale	23,026	25,345
Loans, net	$ 1,519,216	$ 1,453,429

Financial Instruments with Of69

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Interest Rate Derivatives (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017USD ($)item	Dec. 31, 2016USD ($)item
Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Asset Derivatives, Fair Value	$ 704	$ 960
Liability Derivatives, Fair Value	385	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	(1,458)	(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	$ 4,200	$ 6,200
Number of correspondent financial institutions where investment securities are pledged | item	2	2
Weighted average maturity	7 years 2 months 12 days	7 years 3 months 18 days
Notional or Contractual Amount	$ 101,613	$ 85,807
Asset Derivatives, Fair Value	385	673
Liability Derivatives, Fair Value	385	673
Commitments | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Notional or Contractual Amount	37,142	31,980
Asset Derivatives, Fair Value	$ 319	$ 287

Financial Instruments with Of70

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Commitments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Company's contractual commitments due to letters of credit
Total letters of credit	$ 13,071	$ 13,511
Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	233	315
Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,838	13,196
Borrower
Company's contractual commitments due to letters of credit
Total letters of credit	12,649	12,892
Borrower | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	233	220
Borrower | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,416	12,672
Borrower | Financial standby
Company's contractual commitments due to letters of credit
Total letters of credit	4,146	4,184
Borrower | Financial standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	167	137
Borrower | Financial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	3,979	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	8,381	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	8,315	8,499
Nonborrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	422	619
Nonborrower | Performance standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit		95
Nonborrower | Performance standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	$ 422	$ 524