Old Second Bancorp (OSBC) 10-Q 7 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 03, 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	Sep. 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	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 32,772	$ 33,805
Interest bearing deposits with financial institutions	14,730	13,529
Cash and cash equivalents	47,502	47,334
Securities available-for-sale, at fair value	533,484	531,838
Federal Home Loan Bank and Federal Reserve Bank stock	10,393	7,918
Loans held-for-sale	1,641	4,918
Loans	1,594,191	1,478,809
Less: allowance for loan losses	16,465	16,158
Net loans	1,577,726	1,462,651
Premises and equipment, net	37,971	38,977
Other real estate owned	9,024	11,916
Mortgage servicing rights, net	6,684	6,489
Goodwill and core deposit intangible	8,944	9,018
Bank-owned life insurance (BOLI)	61,403	60,332
Deferred tax assets, net	42,394	53,464
Other assets	23,241	16,333
Total assets	2,360,407	2,251,188
Deposits:
Noninterest bearing demand	556,874	513,688
Interest bearing:
Savings, NOW, and money market	947,969	950,849
Time	384,272	402,248
Total deposits	1,889,115	1,866,785
Securities sold under repurchase agreements	26,853	25,715
Other short-term borrowings	125,000	70,000
Junior subordinated debentures	57,627	57,591
Senior notes	44,033	43,998
Other liabilities	17,016	11,889
Total liabilities	2,159,644	2,075,978
Stockholders' Equity
Common stock	34,626	34,534
Additional paid-in capital	117,458	116,653
Retained earnings	145,767	129,005
Accumulated other comprehensive loss	(632)	(8,762)
Treasury stock	(96,456)	(96,220)
Total stockholders' equity	200,763	175,210
Total liabilities and stockholders' equity	$ 2,360,407	$ 2,251,188

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest and Dividend Income
Loans, including fees	$ 18,208	$ 13,496	$ 52,202	$ 39,593
Loans held-for-sale	34	48	95	115
Securities:
Taxable	2,424	3,954	7,994	12,547
Tax exempt	1,628	180	4,188	579
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock	94	83	271	251
Interest bearing deposits with financial institutions	37	64	91	98
Total interest and dividend income	22,425	17,825	64,841	53,183
Interest Expense
Savings, NOW, and money market deposits	239	193	695	577
Time deposits	1,077	931	3,081	2,622
Other short-term borrowings	224	23	482	69
Junior subordinated debentures	930	1,084	3,073	3,251
Senior notes	672		2,017
Subordinated debt		245		727
Notes payable and other borrowings		2		6
Total interest expense	3,142	2,478	9,348	7,252
Net interest and dividend income	19,283	15,347	55,493	45,931
Loan loss reserve release	300		1,050
Net interest and dividend income after release for loan losses	18,983	15,347	54,443	45,931
Noninterest Income
Trust income	1,468	1,403	4,564	4,274
Service charges on deposits	1,722	1,756	4,955	4,961
Secondary mortgage fees	195	322	594	795
Mortgage servicing rights mark to market loss	(194)	(147)	(756)	(1,921)
Mortgage servicing gain / (loss), net of changes in fair value	451	437	1,330	1,280
Net gain on sales of mortgage loans	1,095	2,177	3,715	5,031
Securities loss, net	102	(1,959)	(165)	(2,020)
Increase in cash surrender value of bank-owned life insurance	362	383	1,071	987
Debit card interchange income	1,075	1,013	3,131	3,009
(Loss) gain on disposal and transfer of fixed assets			10	(1)
Other income	1,567	1,209	3,739	3,751
Total noninterest income	7,843	6,594	22,188	20,146
Noninterest Expense
Salaries and employee benefits	10,049	9,014	31,167	26,854
Occupancy expense, net	1,482	1,500	4,510	4,427
Furniture and equipment expense	1,081	1,105	3,283	3,093
FDIC insurance	199	228	512	793
General bank insurance	246	269	780	839
Amortization of core deposit intangible	24		74
Advertising expense	255	430	1,093	1,212
Debit card interchange expense	285	363	1,033	1,186
Legal fees	162	242	450	594
Other real estate expense, net	680	426	1,928	2,043
Other expense	2,455	3,005	8,128	8,505
Total noninterest expense	16,918	16,582	52,958	49,546
Income before income taxes	9,908	5,359	23,673	16,531
Provision for income taxes	1,831	1,860	6,023	5,865
Net income	$ 8,077	$ 3,499	$ 17,650	$ 10,666
Basic earnings per share (in dollars per share)	$ 0.27	$ 0.12	$ 0.60	$ 0.36
Diluted earnings per share (in dollars per share)	$ 0.27	$ 0.12	$ 0.59	$ 0.36

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Consolidated Statements of Comprehensive Income
Net income	$ 8,077	$ 3,499	$ 17,650	$ 10,666
Unrealized holding (losses) gains on available-for-sale securities arising during the period	2,971	(616)	13,798	5,151
Related tax benefit (expense)	(1,191)	237	(5,516)	(2,071)
Holding (losses) gains after tax on available-for-sale securities	1,780	(379)	8,282	3,080
Less: Reclassification adjustment for the net (losses) gains realized during the period
Net realized (losses) gains	102	(1,959)	(165)	(2,020)
Income tax benefit (expense) on net realized gains	(42)	782	64	807
Net realized (losses) gains after tax	60	(1,177)	(101)	(1,213)
Other comprehensive (loss) income on available-for-sale securities	1,720	798	8,383	4,293
Accretion of net unrealized holding gains on held-to-maturity transferred from available-for-sale securities				5,939
Related tax expense				(2,446)
Other comprehensive income on held-to-maturity securities				3,493
Changes in fair value of derivatives used for cashflow hedges	19	(254)	(445)	(4,278)
Related tax benefit	8	102	192	1,714
Other comprehensive loss on cashflow hedges	27	(152)	(253)	(2,564)
Total other comprehensive income (loss) income	1,747	646	8,130	5,222
Total comprehensive income	$ 9,824	$ 4,145	$ 25,780	$ 15,888

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net income	$ 17,650,000	$ 10,666,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of leasehold improvement	1,760,000	1,682,000
Change in fair value of mortgage servicing rights	756,000	1,921,000
Loan loss reserve release	1,050,000
Provision for deferred tax expense	5,682,000	5,476,000
Originations of loans held-for-sale	(113,077,000)	(147,187,000)
Proceeds from sales of loans held-for-sale	119,059,000	150,247,000
Net gain on sales of mortgage loans	(3,715,000)	(5,031,000)
Net discount accretion of purchase accounting adjustment on loans	(1,115,000)
Change in current income taxes receivable (payable)	111,000	300,000
Increase in cash surrender value of bank-owned life insurance	(1,071,000)	(987,000)
Change in accrued interest receivable and other assets	(6,849,000)	(2,659,000)
Change in accrued interest payable and other liabilities	4,571,000	(246,000)
Net discount (accretion)/premium amortization on securities	1,320,000	(517,000)
Securities losses, net	165,000	2,020,000
Amortization of core deposit	74,000
Amortization of junior subordinated debentures issuance costs	36,000	36,000
Amortization of senior notes issuance costs	77,000
Stock based compensation	897,000	482,000
Net gain on sale of other real estate owned	(454,000)	(316,000)
Provision for other real estate owned losses	1,630,000	1,305,000
Net loss on disposal of fixed assets	(10,000)	1,000
Net cash provided by (used in) operating activities	28,547,000	17,193,000
Cash flows from investing activities
Proceeds from maturities and calls including pay down of securities available-for-sale	105,327,000	62,868,000
Proceeds from sales of securities available-for-sale	152,476,000	271,374,000
Purchases of securities available-for-sale	(246,971,000)	(153,252,000)
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	(2,475,000)	600,000
Net change in loans	(118,711,000)	(71,600,000)
Improvements in other real estate owned		(16,000)
Proceeds from sales of other real estate owned	5,512,000	5,247,000
Proceeds from disposition of premises and equipment	13,000
Net purchases of premises and equipment	(852,000)	(1,163,000)
Net cash (used in) provided by investing activities	(105,681,000)	117,430,000
Cash flows from financing activities
Net change in deposits	22,330,000	18,296,000
Net change in securities sold under repurchase agreements	1,138,000	12,536,000
Net change in other short-term borrowings	55,000,000	(15,000,000)
Payment of senior note issuance costs	(42,000)
Dividends paid common stock	(888,000)	(592,000)
Purchase of treasury stock	(236,000)	(254,000)
Net cash (used in) provided by financing activities	77,302,000	14,986,000
Net change in cash and cash equivalents	168,000	149,609,000
Cash and cash equivalents at beginning of period	47,334,000	40,338,000
Cash and cash equivalents at end of period	47,502,000	189,947,000
Supplemental cash flow information
Income taxes paid	230,000	160,000
Interest paid for deposits	3,802,000	3,142,000
Interest paid for borrowings	4,890,000	4,021,000
Non-cash transfer of loans to other real estate owned	3,701,000	1,223,000
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			10,666			10,666
Other comprehensive income, net of tax				5,222		5,222
Dividends declared and paid			(592)			(592)
Change in restricted stock	106	(106)
Tax effect from vesting of restricted stock		174				174
Stock based compensation		482				482
Purchase of treasury stock					(254)	(254)
Balance at Sep. 30, 2016	34,533	116,468	124,283	(7,437)	(96,220)	171,627
Balance at Dec. 31, 2016	34,534	116,653	129,005	(8,762)	(96,220)	175,210
Increase (Decrease) in Stockholders' Equity
Net income			17,650			17,650
Other comprehensive income, net of tax				8,130		8,130
Dividends declared and paid			(888)			(888)
Change in restricted stock	92	(92)
Stock based compensation		897				897
Purchase of treasury stock					(236)	(236)
Balance at Sep. 30, 2017	$ 34,626	$ 117,458	$ 145,767	$ (632)	$ (96,456)	$ 200,763

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 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 September 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 is required to 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 adopted ASU 2017-08 as a change in accounting principle in the third quarter of 2017 on a modified retrospective basis, which required the Company to reflect its adoption effective January 1, 2017. The effect of amortizing the premium over a shorter period negatively impacted the net interest margin for the first nine months of 2017, and will continue to decrease future quarterly net interest income by approximately 10 basis points a quarter until the premium, which is $25.0 million as of September 30, 2017, is fully amortized. As a result of management’s analysis, the impact of the change in accounting principle as a result of ASU 2017-08 to adjust beginning of year retained earnings was considered insignificant and, accordingly, the impact was adjusted through current period earnings. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities”. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. The Company plans to adopt ASU 2017-12 on January 1, 2018. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. While the Company continues to assess all potential impacts of the standard, we currently expect adoption to have an immaterial impact on our consolidated financial statements. Subsequent Events On October 17, 2017, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on November 6, 2017, to stockholders of record as of October 27, 2017; dividends of $296,000 were paid to stockholders on November 6, 2017.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 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	9 Months Ended
	Sep. 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 $5.6 million at September 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 September 30, 2017, and December 31, 2016. The following table summarizes the amortized cost and fair value of the securities portfolio at September 30, 2017, and December 31, 2016, and the corresponding amounts of gross unrealized gains and losses: Gross Gross Amortized Unrealized Unrealized Fair September 30, 2017 Cost Gains Losses Value Securities available-for-sale U.S. Treasuries $ 4,001 $ - $ (11) $ 3,990 U.S. government agencies 13,475 15 (39) 13,451 U.S. government agencies mortgage-backed 11,131 18 (119) 11,030 States and political subdivisions 224,648 5,173 (789) 229,032 Corporate bonds 10,823 20 (266) 10,577 Collateralized mortgage obligations 81,693 228 (1,535) 80,386 Asset-backed securities 134,542 865 (3,648) 131,759 Collateralized loan obligations 52,803 505 (49) 53,259 Total securities available-for-sale $ 533,116 $ 6,824 $ (6,456) $ 533,484 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 September 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 $ 3,400 2.60 % $ 3,405 Due after one year through five years 5,846 2.74 5,831 Due after five years through ten years 16,105 2.52 16,057 Due after ten years 227,596 2.98 231,757 252,947 2.94 257,050 Mortgage-backed and collateralized mortgage obligations 92,824 2.72 91,416 Asset-backed securities 134,542 2.41 131,759 Collateralized loan obligations 52,803 4.38 53,259 Total securities available-for-sale $ 533,116 2.91 % $ 533,484 At September 30, 2017, the Company’s investments include $110.6 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. While the program was modified several times before elimination in 2010, FFEL securities are generally guaranteed by the U.S Department of Education “DOE”) at not less than 97% of the outstanding principal amount of the loans. The guarantee will reduce to 85% if the DOE receives reimbursement requests in excess of 5% of insured loans; reimbursement will drop to 75% if reimbursement requests exceed 9% of insured loans. In addition to the U.S. Department of Education guarantee, total added credit enhancement in the form of overcollateralization and/or subordination amounted to $12.3 million, or 10.42%, of outstanding principal. The Company has invested in securities issued from three originators that individually amount to over 10% of the Company’s stockholders equity. Information regarding these three issuers and the value of the securities issued follows: September 30, 2017 Amortized Fair Issuer Cost Value GCO Education Loan Funding Corp $ 27,555 $ 26,505 Towd Point Mortgage Trust 29,544 29,445 Student Loan Marketing Assocation 25,654 25,803 Securities with unrealized losses at September 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 September 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. Treasuries 1 $ 11 $ 3,990 - $ - $ - 1 $ 11 $ 3,990 U.S. government agencies 2 39 6,701 - - - 2 39 6,701 U.S. government agencies mortgage-backed 2 13 2,089 4 106 4,096 6 119 6,185 States and political subdivisions 7 789 24,843 - - - 7 789 24,843 Corporate bonds - - - 3 266 10,078 3 266 10,078 Collateralized mortgage obligations 4 238 21,281 8 1,297 43,684 12 1,535 64,965 Asset-backed securities 1 265 4,293 9 3,383 76,725 10 3,648 81,018 Collateralized loan obligations 1 49 7,948 - - - 1 49 7,948 Total securities available-for-sale 18 $ 1,404 $ 71,145 24 $ 5,052 $ 134,583 42 $ 6,456 $ 205,728 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 nine months ended September 30, 2017 or 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. The following table presents net realized gains (losses) on securities available-for-sale for the quarters and nine months ended September 30, 2017 and 2016. Quarter Ended Nine Months Ended September 30, September 30, Securities available-for-sale 2017 2016 2017 2016 Gross realized gains on securities $ 474 $ 1,380 $ 911 $ 1,518 Gross realized losses on securities (371) (3,339) (1,076) (3,538) Securities realized gains (losses), net $ 103 $ (1,959) $ (165) $ (2,020) The majority of the net realized losses in the prior year were incurred to meet the funding needs related to the Talmer branch acquisition in late 2016.

Loans

Loans	9 Months Ended
	Sep. 30, 2017
Loans
Loans	Note 4 – Loans Major classifications of loans were as follows: September 30, 2017 December 31, 2016 Commercial $ 257,356 $ 228,113 Leases 69,305 55,451 Real estate - commercial 739,136 736,247 Real estate - construction 94,868 64,720 Real estate - residential 419,583 377,851 Consumer 2,770 3,237 Other 1 10,550 11,973 1,593,568 1,477,592 Net deferred loan costs 623 1,217 Total loans $ 1,594,191 $ 1,478,809 1 The “Other” class includes overdrafts. It is the policy of the Company to review each prospective credit prior to making a loan in order to determine if an adequate level of security or collateral has been obtained. The type of collateral, when required, will vary from liquid assets to real estate. The Company’s access to collateral, in the event of borrower default, is assured through adherence to lending laws, the Company’s lending standards and credit monitoring procedures. With selected exceptions, the Bank makes loans solely within its market area. There are no significant concentrations of loans where the customers’ ability to honor loan terms is dependent upon a single economic sector, although the real estate related categories listed above represent 78.6% and 79.7% of the portfolio at September 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 September 30, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ - $ 89 $ - $ 89 $ 257,060 $ 207 $ 257,356 $ - Leases - 685 149 834 68,275 196 69,305 156 Real estate - commercial Owner occupied general purpose 253 - 537 790 154,429 457 155,676 561 Owner occupied special purpose 513 - - 513 172,866 359 173,738 - Non-owner occupied general purpose 649 - - 649 251,933 1,165 253,747 - Non-owner occupied special purpose - 248 - 248 93,498 - 93,746 - Retail properties - - - - 45,149 1,113 46,262 - Farm - - 383 383 15,584 - 15,967 387 Real estate - construction Homebuilder - - - - 2,644 - 2,644 - Land - - - - 3,235 - 3,235 - Commercial speculative - - - - 34,817 - 34,817 - All other 63 - - 63 53,904 205 54,172 - Real estate - residential Investor - - - - 52,361 492 52,853 - Multifamily - - - - 117,544 4,757 122,301 - Owner occupied 40 - - 40 124,414 4,127 128,581 - Revolving and junior liens 732 22 100 854 113,956 1,038 115,848 103 Consumer 2 - - 2 2,760 8 2,770 - Other 1 1 - - 1 11,172 - 11,173 - Total $ 2,253 $ 1,044 $ 1,169 $ 4,466 $ 1,575,601 $ 14,124 $ 1,594,191 $ 1,207 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: September 30, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 245,603 $ 11,371 $ 382 $ - $ 257,356 Leases 68,274 - 1,031 - 69,305 Real estate - commercial Owner occupied general purpose 153,039 1,274 1,363 - 155,676 Owner occupied special purpose 172,216 1,163 359 - 173,738 Non-owner occupied general purpose 250,497 2,085 1,165 - 253,747 Non-owner occupied special purpose 90,113 - 3,633 - 93,746 Retail Properties 43,922 1,227 1,113 - 46,262 Farm 13,472 - 2,495 - 15,967 Real estate - construction Homebuilder 2,644 - - - 2,644 Land 3,235 - - - 3,235 Commercial speculative 34,817 - - - 34,817 All other 52,898 894 380 - 54,172 Real estate - residential Investor 52,205 - 648 - 52,853 Multifamily 117,544 - 4,757 - 122,301 Owner occupied 123,600 563 4,418 - 128,581 Revolving and junior liens 113,871 - 1,977 - 115,848 Consumer 2,762 - 8 - 2,770 Other 11,173 - - - 11,173 Total $ 1,551,885 $ 18,577 $ 23,729 $ - $ 1,594,191 December 31, 2016 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 214,028 $ 11,558 $ 2,527 $ - $ 228,113 Leases 53,366 976 1,109 55,451 Real estate - commercial Owner occupied general purpose 135,503 53 1,680 - 137,236 Owner occupied special purpose 172,353 5,402 385 - 178,140 Non-owner occupied general purpose 229,448 913 1,930 - 232,291 Non-owner occupied special purpose 114,293 - 4,772 - 119,065 Retail Properties 52,207 1,267 1,179 - 54,653 Farm 11,840 1,240 1,782 - 14,862 Real estate - construction Homebuilder 3,883 - - - 3,883 Land 3,029 - - - 3,029 Commercial speculative 22,654 - 74 - 22,728 All other 34,696 - 384 - 35,080 Real estate - residential Investor 55,001 - 1,096 - 56,097 Multifamily 96,502 - - - 96,502 Owner occupied 115,831 570 7,225 - 123,626 Revolving and junior liens 99,286 - 2,340 - 101,626 Consumer 3,236 - 1 - 3,237 Other 13,165 25 - - 13,190 Total $ 1,430,321 $ 22,004 $ 26,484 $ - $ 1,478,809 1 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans. The Company had $1.2 million and $1.8 million in residential real estate loans in the process of foreclosure as of September 30, 2017, and December 31, 2016, respectively. The Company also had $937,000 and $225,000 in residential real estate included in OREO as of September 30, 2017, and December 31, 2016, respectively. Impaired loans, which include nonaccrual loans and accruing troubled debt restructurings, by class of loans for the September 30, 2017 periods listed were as follows: Nine Months Ended As of September 30, 2017 September 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 207 $ 360 $ - $ 123 $ - Leases 196 227 - 281 - Commercial real estate Owner occupied general purpose 457 495 - 1,169 - Owner occupied special purpose 359 509 - 372 - Non-owner occupied general purpose 1,218 1,592 - 1,481 2 Non-owner occupied special purpose - - - 507 - Retail properties 1,113 1,199 - 1,146 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - 37 - All other 205 231 - 206 - Residential Investor 1,374 1,627 - 1,607 36 Multifamily 4,757 4,965 - 2,379 - Owner occupied 8,150 9,524 - 8,987 119 Revolving and junior liens 1,991 2,173 - 2,237 27 Consumer 8 8 - 104 - Total impaired loans with no recorded allowance 20,035 22,910 - 20,636 184 With an allowance recorded Commercial - - - - - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied - - - 402 - Revolving and junior liens 51 51 6 26 2 Consumer - - - - - Total impaired loans with a recorded allowance 51 51 6 551 2 Total impaired loans $ 20,086 $ 22,961 $ 6 $ 21,187 $ 186 Impaired loans by class of loans as of December 31, 2016, and for the nine months ended September 30, 2016, were as follows: Nine Months Ended As of December 31, 2016 September 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 326 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,412 66 Owner occupied special purpose 385 518 - 580 - Non-owner occupied general purpose 1,744 2,010 - 1,655 2 Non-owner occupied special purpose 1,013 1,649 - 506 - Retail properties 1,179 1,235 - 990 - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 80 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,864 35 Multifamily - - - - - Owner occupied 9,824 11,391 - 9,916 120 Revolving and junior liens 2,484 3,018 - 2,527 9 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 21,492 232 With an allowance recorded Commercial - - - 2 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 132 31 Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 356 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 513 31 Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 22,005 $ 263 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 TDRs is determined by calculating the present value of the TDR cash flows by discounting the original payment less an assumption for probability of default at the original note’s issue rate, and adding this amount to the present value of collateral less selling costs. 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 September 30, 2017 Nine Months Ended September 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 Owner occupied HAMP 1 1 $ 36 $ 33 1 $ 36 $ 33 Other 2 1 42 42 1 42 42 Revolving and junior liens HAMP 1 1 49 49 1 49 49 Other 2 1 49 33 7 448 418 Total 4 $ 176 $ 157 10 $ 575 $ 542 TDR Modifications TDR Modifications Quarter Ended September 30, 2016 Nine Months Ended September 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 2 - $ - $ - 2 $ 312 $ 211 Real estate - residential Owner occupied HAMP 1 - - - 1 239 235 Revolving and junior liens HAMP 1 - - 4 469 433 Other 2 1 70 70 1 70 70 Total 1 $ 70 $ 70 8 $ 1,090 $ 949 1 HAMP: Home Affordable Modification Program 2 Other: Change of terms from bankruptcy court 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 nine months ended September 30, 2017, and September 30, 2016, for loans that were restructured within the 12 month period prior to default.

Allowance for Loan Losses

Allowance for Loan Losses	9 Months Ended
	Sep. 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 nine months ended September 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 September 30, 2017 Beginning balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Charge-offs 13 98 22 19 7 82 - 241 Recoveries 6 - 43 11 459 45 6 570 (Release) Provision (104) 77 505 165 (607) (1) 265 300 Ending balance $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,421 $ 810 $ 778 $ 16,465 Nine months ended September 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 20 215 300 23 1,178 262 - 1,998 Recoveries 13 - 124 89 850 166 13 1,255 Provision (Release) 417 352 (738) 559 57 73 330 1,050 Ending balance $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,421 $ 810 $ 778 $ 16,465 Ending balance: Individually evaluated for impairment $ - $ - $ - $ - $ 6 $ - $ - $ 6 Ending balance: Collectively evaluated for impairment $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,415 $ 810 $ 778 $ 16,459 Loans: Ending balance $ 257,356 $ 69,305 $ 739,136 $ 94,868 $ 419,583 $ 2,770 $ 11,173 $ 1,594,191 Ending balance: Individually evaluated for impairment $ 207 $ 196 $ 3,147 $ 205 $ 16,323 $ 8 $ - $ 20,086 Ending balance: Collectively evaluated for impairment $ 257,149 $ 69,109 $ 735,989 $ 94,663 $ 403,260 $ 2,762 $ 11,173 $ 1,574,105 Changes in the allowance for loan losses by segment of loans based on method of impairment for three and nine months ended September 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 September 30, 2016 Beginning balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Charge-offs 76 - 792 9 220 100 - 1,197 Recoveries 10 - 27 60 199 57 5 358 Provision (Release) 141 71 753 39 (577) 118 (545) - Ending balance $ 1,495 $ 346 $ 8,942 $ 470 $ 2,335 $ 937 $ 458 $ 14,983 Nine months ended September 30, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 95 13 1,484 9 657 250 - 2,508 Recoveries 22 - 255 71 718 184 18 1,268 (Release) Provision (473) 304 1,158 143 580 (187) (1,525) - Ending balance $ 1,495 $ 346 $ 8,942 $ 470 $ 2,335 $ 937 $ 458 $ 14,983 Ending balance: Individually evaluated for impairment $ - $ - $ 264 $ - $ 250 $ - $ - $ 514 Ending balance: Collectively evaluated for impairment $ 1,495 $ 346 $ 8,678 $ 470 $ 2,085 $ 937 $ 458 $ 14,469 Loans: Ending balance $ 136,819 $ 47,215 $ 617,280 $ 28,786 $ 357,846 $ 3,325 $ 11,581 $ 1,202,852 Ending balance: Individually evaluated for impairment $ 583 $ - $ 8,426 $ 76 $ 14,038 $ - $ - $ 23,123 Ending balance: Collectively evaluated for impairment $ 136,236 $ 47,215 $ 608,854 $ 28,710 $ 343,808 $ 3,325 $ 11,581 $ 1,179,729

Other Real Estate Owned

Other Real Estate Owned	9 Months Ended
	Sep. 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 Nine Months Ended September 30, September 30, Other real estate owned 2017 2016 2017 2016 Balance at beginning of period $ 11,724 $ 16,252 $ 11,916 $ 19,141 Property additions 176 255 3,796 1,223 Property improvements - 4 - 16 Less: Proceeds from property disposals, net of participation purchase and of gains/losses 1,956 2,002 5,058 4,931 Period valuation adjustments 920 365 1,630 1,305 Balance at end of period $ 9,024 $ 14,144 $ 9,024 $ 14,144 Activity in the valuation allowance was as follows: Quarters Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Balance at beginning of period $ 8,304 $ 13,377 $ 9,982 $ 14,127 Provision for unrealized losses 920 365 1,630 1,305 Reductions taken on sales (421) (488) (2,809) (2,178) Balance at end of period $ 8,803 $ 13,254 $ 8,803 $ 13,254 Expenses related to OREO, net of lease revenue includes: Quarters Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Gain on sales, net $ (276) $ (249) $ (454) $ (316) Provision for unrealized losses 920 365 1,630 1,305 Operating expenses 221 361 1,037 1,217 Less: Lease revenue 185 51 285 163 Net OREO expense $ 680 $ 426 $ 1,928 $ 2,043

Deposits

Deposits	9 Months Ended
	Sep. 30, 2017
Deposits
Deposits	Note 7 – Deposits Major classifications of deposits were as follows: September 30, 2017 December 31, 2016 Noninterest bearing demand $ 556,874 $ 513,688 Savings 260,268 256,159 NOW accounts 417,054 419,417 Money market accounts 270,647 275,273 Certificates of deposit of less than $100,000 219,152 228,993 Certificates of deposit of $100,000 through $250,000 114,373 110,992 Certificates of deposit of more than $250,000 50,747 62,263 Total deposits $ 1,889,115 $ 1,866,785

Borrowings

Borrowings	9 Months Ended
	Sep. 30, 2017
Borrowings
Borrowings	Note 8 – Borrowings The following table is a summary of borrowings as of September 30, 2017, and December 31, 2016. Junior subordinated debentures are discussed in detail in Note 9: September 30, 2017 December 31, 2016 Securities sold under repurchase agreements $ 26,853 $ 25,715 FHLBC advances 1 125,000 70,000 Junior subordinated debentures 57,627 57,591 Senior notes 44,033 43,998 Total borrowings $ 253,513 $ 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 $26.9 million at September 30, 2017, and $25.7 million at December 31, 2016. The fair value of the pledged collateral was $41.5 million at September 30, 2017 and $43.0 million at December 31, 2016. At September 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 September 30, 2017, the Bank had $125.0 million in advances outstanding under the FHLBC as compared to $70.0 million outstanding as of December 31, 2016. As of September 30, 2017, FHLBC stock held was valued at $5.6 million, and any potential FHLBC advances were collateralized by securities with a fair value of $87.4 million and loans with a principal balance of $251.3 million, which carried a FHLBC calculated combined collateral value of $273.8 million. The Company had excess collateral of $74.5 million available to secure borrowings at September 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 notes 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 notes issuance totaled $1.0 million, and are being deferred and recorded to expense over the ten year term of the notes. The unamortized costs are included as a reduction to the balance of the senior notes on the Consolidated Balance Sheet.

Junior Subordinated Debentures

Junior Subordinated Debentures	9 Months Ended
	Sep. 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 4.30% as of September 30, 2017, 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. As of September 30, 2017, and December 31, 2016, unamortized debt issuance costs related to the junior subordinated debentures were $752,000 and $787,000 respectively, and are included as a reduction to the balance of the junior subordinated debentures on the Consolidated Balance Sheet.

Equity Compensation Plans

Equity Compensation Plans	9 Months Ended
	Sep. 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 September 30, 2017, 453,209 shares remained available for issuance under the 2014 Plan. There were no stock options granted or exercised in the third 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 nine months ended September 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 0.3 $ - Exercisable at end of period 94,500 $ 25.82 0.3 $ - 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 161,500 restricted awards issued under the 2014 Plan during the nine months ended September 30, 2017. There were 130,000 restricted awards issued during the nine months ended September 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 $925,100 and $485,000 in the first nine months of 2017 and 2016, respectively. A summary of changes in the Company’s unvested restricted awards for the nine months ended September 30, 2017, is as follows: September 30, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 161,500 11.04 Vested (91,500) 5.07 Forfeited (14,000) 7.53 Nonvested at September 30 465,000 $ 7.79 Total unrecognized compensation cost of restricted awards was $2.0 million as of September 30, 2017, which is expected to be recognized over a weighted-average period of 2.11 years. Total unrecognized compensation cost of restricted awards was $1.1 million as of September 30, 2016, which was expected to be recognized over a weighted-average period of 1.99 years.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 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 September 30 (in thousands except for share and per share data): Quarters Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,627,086 29,554,716 29,591,811 29,524,796 Net income $ 8,077 $ 3,499 $ 17,650 $ 10,666 Basic earnings per share $ 0.27 $ 0.12 $ 0.60 $ 0.36 Diluted earnings per share: Weighted-average common shares outstanding 29,627,086 29,554,716 29,591,811 29,524,796 Dilutive effect of nonvested restricted awards 1 473,967 282,228 425,081 303,221 Dilutive effect of stock options 2,556 1,238 2,473 413 Diluted average common shares outstanding 30,103,609 29,838,182 30,019,365 29,828,430 Net Income $ 8,077 $ 3,499 $ 17,650 $ 10,666 Diluted earnings per share $ 0.27 $ 0.12 $ 0.59 $ 0.36 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 967,339 900,839 977,426 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 September 30, 2017, and September 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	9 Months Ended
	Sep. 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 September 30, 2017, the Bank exceeded those thresholds. At September 30, 2017, the Bank’s Tier 1 capital leverage ratio was 10.63%, an increase of 39 basis point from December 31, 2016, and is well above the 8.00% objective. The Bank’s total capital ratio was 13.52%, an increase of 7 basis points from December 31, 2016, and also modestly 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 September 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 September 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 September 30, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 170,622 8.88 % $ 110,482 5.750 % N/A N/A Old Second Bank 243,109 12.67 110,330 5.750 $ 124,720 6.50 % Total capital to risk weighted assets Consolidated 239,269 12.46 177,627 9.250 N/A N/A Old Second Bank 259,569 13.52 177,590 9.250 191,989 10.00 Tier 1 capital to risk weighted assets Consolidated 221,579 11.54 139,207 7.250 N/A N/A Old Second Bank 243,109 12.67 139,111 7.250 153,502 8.00 Tier 1 capital to average assets Consolidated 221,579 9.69 91,467 4.00 N/A N/A Old Second Bank 243,109 10.63 91,480 4.00 114,350 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 September 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	9 Months Ended
	Sep. 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. 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 September 30, 2017, and December 31, 2016, respectively, measured by the Company at fair value on a recurring basis: September 30, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,990 $ - $ - $ 3,990 U.S. government agencies - 13,451 - 13,451 U.S. government agencies mortgage-backed - 11,030 - 11,030 States and political subdivisions - 216,672 12,360 229,032 Corporate bonds - 10,577 - 10,577 Collateralized mortgage obligations - 77,894 2,492 80,386 Asset-backed securities - 131,759 - 131,759 Collateralized loan obligations - 53,259 - 53,259 Loans held-for-sale - 1,641 - 1,641 Mortgage servicing rights - - 6,684 6,684 Interest rate swap agreements - 128 - 128 Mortgage banking derivatives - 289 - 289 Total $ 3,990 $ 516,700 $ 21,536 $ 542,226 Liabilities: Interest rate swap agreements, including risk participation agreements $ - $ 1,566 $ - $ 1,566 Total $ - $ 1,566 $ - $ 1,566 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 Interest rate swap agreements - 673 - 673 Mortgage banking derivatives - 287 - 287 Total $ - $ 512,371 $ 31,834 $ 544,205 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: Nine Months Ended September 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) 32 - (354) Included in other comprehensive income 7 (501) - Purchases, issuances, sales, and settlements Purchases - 10,994 - Issuances - - 951 Settlements (666) (20,359) (402) Ending balance September 30, 2017 $ 2,492 $ 12,360 $ 6,684 Nine Months Ended September 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) - (1,394) Included in other comprehensive income 9 - Purchases, issuances, sales, and settlements Issuances - 1,148 Settlements (78) (526) Ending balance September 30, 2016 $ - $ 5,075 The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of September 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 $ 6,684 Discounted Cash Flow Discount Rate 10.0 - 1576.2% 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 $12.4 million for state and political subdivisions representing various local municipality securities and $2.5 million of collateralized mortgage obligations at September 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 September 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 September 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: September 30, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 45 $ 45 Other real estate owned, net 2 - - 9,024 9,024 Total $ - $ - $ 9,069 $ 9,069 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 of $51,000 and a valuation allowance of $6,000 resulting in a decrease of specific allocations within the allowance for loan losses of $92,000 for the nine months ended September 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 $9.0 million, which is made up of the outstanding balance of $18.7 million, net of a valuation allowance of $8.8 million and participations of $900,000 at September 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 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	9 Months Ended
	Sep. 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: September 30, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 32,772 $ 32,772 $ 32,772 $ - $ - Interest bearing deposits with financial institutions 14,730 14,730 14,730 - - Securities available-for-sale 533,484 533,484 3,990 514,642 14,852 FHLBC and FRBC Stock 10,393 10,393 - 10,393 - Loans held-for-sale 1,641 1,641 - 1,641 - Loans, net 1,577,726 1,568,457 - - 1,568,457 Accrued interest receivable 8,669 8,669 - 8,669 - Financial liabilities: Noninterest bearing deposits $ 556,874 $ 556,874 $ 556,874 $ - $ - Interest bearing deposits 1,332,241 1,329,668 - 1,329,668 - Securities sold under repurchase agreements 26,853 26,853 - 26,853 - Other short-term borrowings 125,000 125,000 - 125,000 - Junior subordinated debentures 57,627 59,524 33,320 26,204 - Senior notes 44,033 46,958 - 46,958 - Interest rate swap agreements 1,439 1,439 - 1,439 - Borrowing interest payable 773 773 - 773 - Deposit interest payable 573 573 - 573 - 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	9 Months Ended
	Sep. 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 September 30, 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 September 30, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (1,439) (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 one correspondent financial institution at September 30, 2017. The Bank had $6.2 million in securities pledged to support interest rate swap activity with one correspondent financial institution 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 September 30, 2017, the notional amount of non-hedging interest rate swaps was $349.4 million with a weighted average maturity of 6.7 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 September 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 $ 349,367 Other Assets $ 128 Other Liabilities $ 128 Interest rate lock commitments and forward contracts 28,591 Other Assets 289 N/A - Total $ 417 $ 128 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 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 September 30, 2017, and December 31, 2016. The following table is a summary of letter of credit commitments (in thousands): September 30, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 177 $ 3,748 $ 3,925 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 7,912 7,978 83 8,498 8,581 243 11,782 12,025 220 12,671 12,891 Non-borrower: Performance standby - 422 422 95 525 620 Total letters of credit $ 243 $ 12,204 $ 12,447 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 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 is required to 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 adopted ASU 2017-08 as a change in accounting principle in the third quarter of 2017 on a modified retrospective basis, which required the Company to reflect its adoption effective January 1, 2017. The effect of amortizing the premium over a shorter period negatively impacted the net interest margin for the first nine months of 2017, and will continue to decrease future quarterly net interest income by approximately 10 basis points a quarter until the premium, which is $25.0 million as of September 30, 2017, is fully amortized. As a result of management’s analysis, the impact of the change in accounting principle as a result of ASU 2017-08 to adjust beginning of year retained earnings was considered insignificant and, accordingly, the impact was adjusted through current period earnings. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities”. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. The Company plans to adopt ASU 2017-12 on January 1, 2018. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. While the Company continues to assess all potential impacts of the standard, we currently expect adoption to have an immaterial impact on our consolidated financial statements.
Subsequent Events	On October 17, 2017, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on November 6, 2017, to stockholders of record as of October 27, 2017; dividends of $296,000 were paid to stockholders on November 6, 2017

Securities (Tables)

Securities (Tables)	9 Months Ended
	Sep. 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 September 30, 2017 Cost Gains Losses Value Securities available-for-sale U.S. Treasuries $ 4,001 $ - $ (11) $ 3,990 U.S. government agencies 13,475 15 (39) 13,451 U.S. government agencies mortgage-backed 11,131 18 (119) 11,030 States and political subdivisions 224,648 5,173 (789) 229,032 Corporate bonds 10,823 20 (266) 10,577 Collateralized mortgage obligations 81,693 228 (1,535) 80,386 Asset-backed securities 134,542 865 (3,648) 131,759 Collateralized loan obligations 52,803 505 (49) 53,259 Total securities available-for-sale $ 533,116 $ 6,824 $ (6,456) $ 533,484 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 $ 3,400 2.60 % $ 3,405 Due after one year through five years 5,846 2.74 5,831 Due after five years through ten years 16,105 2.52 16,057 Due after ten years 227,596 2.98 231,757 252,947 2.94 257,050 Mortgage-backed and collateralized mortgage obligations 92,824 2.72 91,416 Asset-backed securities 134,542 2.41 131,759 Collateralized loan obligations 52,803 4.38 53,259 Total securities available-for-sale $ 533,116 2.91 % $ 533,484
Schedule of amortized cost and fair value of securities that exceed 10% of stockholders equity	The Company has invested in securities issued from three originators that individually amount to over 10% of the Company’s stockholders equity. Information regarding these three issuers and the value of the securities issued follows: September 30, 2017 Amortized Fair Issuer Cost Value GCO Education Loan Funding Corp $ 27,555 $ 26,505 Towd Point Mortgage Trust 29,544 29,445 Student Loan Marketing Assocation 25,654 25,803
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 September 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. Treasuries 1 $ 11 $ 3,990 - $ - $ - 1 $ 11 $ 3,990 U.S. government agencies 2 39 6,701 - - - 2 39 6,701 U.S. government agencies mortgage-backed 2 13 2,089 4 106 4,096 6 119 6,185 States and political subdivisions 7 789 24,843 - - - 7 789 24,843 Corporate bonds - - - 3 266 10,078 3 266 10,078 Collateralized mortgage obligations 4 238 21,281 8 1,297 43,684 12 1,535 64,965 Asset-backed securities 1 265 4,293 9 3,383 76,725 10 3,648 81,018 Collateralized loan obligations 1 49 7,948 - - - 1 49 7,948 Total securities available-for-sale 18 $ 1,404 $ 71,145 24 $ 5,052 $ 134,583 42 $ 6,456 $ 205,728 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)	9 Months Ended
	Sep. 30, 2017
Loans
Schedule of major classifications of loans	September 30, 2017 December 31, 2016 Commercial $ 257,356 $ 228,113 Leases 69,305 55,451 Real estate - commercial 739,136 736,247 Real estate - construction 94,868 64,720 Real estate - residential 419,583 377,851 Consumer 2,770 3,237 Other 1 10,550 11,973 1,593,568 1,477,592 Net deferred loan costs 623 1,217 Total loans $ 1,594,191 $ 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 September 30, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ - $ 89 $ - $ 89 $ 257,060 $ 207 $ 257,356 $ - Leases - 685 149 834 68,275 196 69,305 156 Real estate - commercial Owner occupied general purpose 253 - 537 790 154,429 457 155,676 561 Owner occupied special purpose 513 - - 513 172,866 359 173,738 - Non-owner occupied general purpose 649 - - 649 251,933 1,165 253,747 - Non-owner occupied special purpose - 248 - 248 93,498 - 93,746 - Retail properties - - - - 45,149 1,113 46,262 - Farm - - 383 383 15,584 - 15,967 387 Real estate - construction Homebuilder - - - - 2,644 - 2,644 - Land - - - - 3,235 - 3,235 - Commercial speculative - - - - 34,817 - 34,817 - All other 63 - - 63 53,904 205 54,172 - Real estate - residential Investor - - - - 52,361 492 52,853 - Multifamily - - - - 117,544 4,757 122,301 - Owner occupied 40 - - 40 124,414 4,127 128,581 - Revolving and junior liens 732 22 100 854 113,956 1,038 115,848 103 Consumer 2 - - 2 2,760 8 2,770 - Other 1 1 - - 1 11,172 - 11,173 - Total $ 2,253 $ 1,044 $ 1,169 $ 4,466 $ 1,575,601 $ 14,124 $ 1,594,191 $ 1,207 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	September 30, 2017 Special Pass Mention Substandard 1 Doubtful Total Commercial $ 245,603 $ 11,371 $ 382 $ - $ 257,356 Leases 68,274 - 1,031 - 69,305 Real estate - commercial Owner occupied general purpose 153,039 1,274 1,363 - 155,676 Owner occupied special purpose 172,216 1,163 359 - 173,738 Non-owner occupied general purpose 250,497 2,085 1,165 - 253,747 Non-owner occupied special purpose 90,113 - 3,633 - 93,746 Retail Properties 43,922 1,227 1,113 - 46,262 Farm 13,472 - 2,495 - 15,967 Real estate - construction Homebuilder 2,644 - - - 2,644 Land 3,235 - - - 3,235 Commercial speculative 34,817 - - - 34,817 All other 52,898 894 380 - 54,172 Real estate - residential Investor 52,205 - 648 - 52,853 Multifamily 117,544 - 4,757 - 122,301 Owner occupied 123,600 563 4,418 - 128,581 Revolving and junior liens 113,871 - 1,977 - 115,848 Consumer 2,762 - 8 - 2,770 Other 11,173 - - - 11,173 Total $ 1,551,885 $ 18,577 $ 23,729 $ - $ 1,594,191 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	Nine Months Ended As of September 30, 2017 September 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 207 $ 360 $ - $ 123 $ - Leases 196 227 - 281 - Commercial real estate Owner occupied general purpose 457 495 - 1,169 - Owner occupied special purpose 359 509 - 372 - Non-owner occupied general purpose 1,218 1,592 - 1,481 2 Non-owner occupied special purpose - - - 507 - Retail properties 1,113 1,199 - 1,146 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - 37 - All other 205 231 - 206 - Residential Investor 1,374 1,627 - 1,607 36 Multifamily 4,757 4,965 - 2,379 - Owner occupied 8,150 9,524 - 8,987 119 Revolving and junior liens 1,991 2,173 - 2,237 27 Consumer 8 8 - 104 - Total impaired loans with no recorded allowance 20,035 22,910 - 20,636 184 With an allowance recorded Commercial - - - - - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied - - - 402 - Revolving and junior liens 51 51 6 26 2 Consumer - - - - - Total impaired loans with a recorded allowance 51 51 6 551 2 Total impaired loans $ 20,086 $ 22,961 $ 6 $ 21,187 $ 186 Impaired loans by class of loans as of December 31, 2016, and for the nine months ended September 30, 2016, were as follows: Nine Months Ended As of December 31, 2016 September 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ 240 $ 388 $ - $ 326 $ - Leases 366 371 - - - Commercial real estate Owner occupied general purpose 1,881 2,131 - 2,412 66 Owner occupied special purpose 385 518 - 580 - Non-owner occupied general purpose 1,744 2,010 - 1,655 2 Non-owner occupied special purpose 1,013 1,649 - 506 - Retail properties 1,179 1,235 - 990 - Farm - - - 636 - Construction Homebuilder - - - - - Land - - - - - Commercial speculative 74 81 - 80 - All other 207 221 - - - Residential Investor 1,841 2,308 - 1,864 35 Multifamily - - - - - Owner occupied 9,824 11,391 - 9,916 120 Revolving and junior liens 2,484 3,018 - 2,527 9 Consumer - - - - - Total impaired loans with no recorded allowance 21,238 25,321 - 21,492 232 With an allowance recorded Commercial - - - 2 - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose 246 595 246 132 31 Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Multifamily - - - - - Owner occupied 803 853 803 356 - Revolving and junior liens - - - 23 - Consumer - - - - - Total impaired loans with a recorded allowance 1,049 1,448 1,049 513 31 Total impaired loans $ 22,287 $ 26,769 $ 1,049 $ 22,005 $ 263
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 September 30, 2017 Nine Months Ended September 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 Owner occupied HAMP 1 1 $ 36 $ 33 1 $ 36 $ 33 Other 2 1 42 42 1 42 42 Revolving and junior liens HAMP 1 1 49 49 1 49 49 Other 2 1 49 33 7 448 418 Total 4 $ 176 $ 157 10 $ 575 $ 542 TDR Modifications TDR Modifications Quarter Ended September 30, 2016 Nine Months Ended September 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 2 - $ - $ - 2 $ 312 $ 211 Real estate - residential Owner occupied HAMP 1 - - - 1 239 235 Revolving and junior liens HAMP 1 - - 4 469 433 Other 2 1 70 70 1 70 70 Total 1 $ 70 $ 70 8 $ 1,090 $ 949 1 HAMP: Home Affordable Modification Program 2

Allowance for Loan Losses (Tabl

Allowance for Loan Losses (Tables)	9 Months Ended
	Sep. 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 nine months ended September 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 September 30, 2017 Beginning balance $ 2,150 $ 791 $ 8,107 $ 857 $ 2,576 $ 848 $ 507 $ 15,836 Charge-offs 13 98 22 19 7 82 - 241 Recoveries 6 - 43 11 459 45 6 570 (Release) Provision (104) 77 505 165 (607) (1) 265 300 Ending balance $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,421 $ 810 $ 778 $ 16,465 Nine months ended September 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,692 $ 833 $ 435 $ 16,158 Charge-offs 20 215 300 23 1,178 262 - 1,998 Recoveries 13 - 124 89 850 166 13 1,255 Provision (Release) 417 352 (738) 559 57 73 330 1,050 Ending balance $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,421 $ 810 $ 778 $ 16,465 Ending balance: Individually evaluated for impairment $ - $ - $ - $ - $ 6 $ - $ - $ 6 Ending balance: Collectively evaluated for impairment $ 2,039 $ 770 $ 8,633 $ 1,014 $ 2,415 $ 810 $ 778 $ 16,459 Loans: Ending balance $ 257,356 $ 69,305 $ 739,136 $ 94,868 $ 419,583 $ 2,770 $ 11,173 $ 1,594,191 Ending balance: Individually evaluated for impairment $ 207 $ 196 $ 3,147 $ 205 $ 16,323 $ 8 $ - $ 20,086 Ending balance: Collectively evaluated for impairment $ 257,149 $ 69,109 $ 735,989 $ 94,663 $ 403,260 $ 2,762 $ 11,173 $ 1,574,105 Changes in the allowance for loan losses by segment of loans based on method of impairment for three and nine months ended September 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 September 30, 2016 Beginning balance $ 1,420 $ 275 $ 8,954 $ 380 $ 2,933 $ 862 $ 998 $ 15,822 Charge-offs 76 - 792 9 220 100 - 1,197 Recoveries 10 - 27 60 199 57 5 358 Provision (Release) 141 71 753 39 (577) 118 (545) - Ending balance $ 1,495 $ 346 $ 8,942 $ 470 $ 2,335 $ 937 $ 458 $ 14,983 Nine months ended September 30, 2016 Beginning balance $ 2,041 $ 55 $ 9,013 $ 265 $ 1,694 $ 1,190 $ 1,965 $ 16,223 Charge-offs 95 13 1,484 9 657 250 - 2,508 Recoveries 22 - 255 71 718 184 18 1,268 (Release) Provision (473) 304 1,158 143 580 (187) (1,525) - Ending balance $ 1,495 $ 346 $ 8,942 $ 470 $ 2,335 $ 937 $ 458 $ 14,983 Ending balance: Individually evaluated for impairment $ - $ - $ 264 $ - $ 250 $ - $ - $ 514 Ending balance: Collectively evaluated for impairment $ 1,495 $ 346 $ 8,678 $ 470 $ 2,085 $ 937 $ 458 $ 14,469 Loans: Ending balance $ 136,819 $ 47,215 $ 617,280 $ 28,786 $ 357,846 $ 3,325 $ 11,581 $ 1,202,852 Ending balance: Individually evaluated for impairment $ 583 $ - $ 8,426 $ 76 $ 14,038 $ - $ - $ 23,123 Ending balance: Collectively evaluated for impairment $ 136,236 $ 47,215 $ 608,854 $ 28,710 $ 343,808 $ 3,325 $ 11,581 $ 1,179,729

Other Real Estate Owned (Tables

Other Real Estate Owned (Tables)	9 Months Ended
	Sep. 30, 2017
Other Real Estate Owned
Schedule of activity in the other real estate owned (OREO) portfolio, net of valuation reserve	Quarters Ended Nine Months Ended September 30, September 30, Other real estate owned 2017 2016 2017 2016 Balance at beginning of period $ 11,724 $ 16,252 $ 11,916 $ 19,141 Property additions 176 255 3,796 1,223 Property improvements - 4 - 16 Less: Proceeds from property disposals, net of participation purchase and of gains/losses 1,956 2,002 5,058 4,931 Period valuation adjustments 920 365 1,630 1,305 Balance at end of period $ 9,024 $ 14,144 $ 9,024 $ 14,144
Schedule of activity in valuation allowance	Quarters Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Balance at beginning of period $ 8,304 $ 13,377 $ 9,982 $ 14,127 Provision for unrealized losses 920 365 1,630 1,305 Reductions taken on sales (421) (488) (2,809) (2,178) Balance at end of period $ 8,803 $ 13,254 $ 8,803 $ 13,254
Schedule of expenses related to foreclosed assets, net of lease revenue	Quarters Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Gain on sales, net $ (276) $ (249) $ (454) $ (316) Provision for unrealized losses 920 365 1,630 1,305 Operating expenses 221 361 1,037 1,217 Less: Lease revenue 185 51 285 163 Net OREO expense $ 680 $ 426 $ 1,928 $ 2,043

Deposits (Tables)

Deposits (Tables)	9 Months Ended
	Sep. 30, 2017
Deposits
Schedule of major classifications of deposits	September 30, 2017 December 31, 2016 Noninterest bearing demand $ 556,874 $ 513,688 Savings 260,268 256,159 NOW accounts 417,054 419,417 Money market accounts 270,647 275,273 Certificates of deposit of less than $100,000 219,152 228,993 Certificates of deposit of $100,000 through $250,000 114,373 110,992 Certificates of deposit of more than $250,000 50,747 62,263 Total deposits $ 1,889,115 $ 1,866,785

Borrowings (Tables)

Borrowings (Tables)	9 Months Ended
	Sep. 30, 2017
Borrowings
Summary of borrowings and junior subordinated debentures	September 30, 2017 December 31, 2016 Securities sold under repurchase agreements $ 26,853 $ 25,715 FHLBC advances 1 125,000 70,000 Junior subordinated debentures 57,627 57,591 Senior notes 44,033 43,998 Total borrowings $ 253,513 $ 197,304

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	9 Months Ended
	Sep. 30, 2017
Equity Compensation Plans
Summary of stock option activity in Incentive Plan	A summary of stock option activity in the Plans for the nine months ended September 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 0.3 $ - Exercisable at end of period 94,500 $ 25.82 0.3 $ -
Summary of changes in nonvested shares of restricted share rights	September 30, 2017 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 409,000 $ 5.89 Granted 161,500 11.04 Vested (91,500) 5.07 Forfeited (14,000) 7.53 Nonvested at September 30 465,000 $ 7.79

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Per Share
Schedule of Earnings Per Share	Quarters Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic earnings per share: Weighted-average common shares outstanding 29,627,086 29,554,716 29,591,811 29,524,796 Net income $ 8,077 $ 3,499 $ 17,650 $ 10,666 Basic earnings per share $ 0.27 $ 0.12 $ 0.60 $ 0.36 Diluted earnings per share: Weighted-average common shares outstanding 29,627,086 29,554,716 29,591,811 29,524,796 Dilutive effect of nonvested restricted awards 1 473,967 282,228 425,081 303,221 Dilutive effect of stock options 2,556 1,238 2,473 413 Diluted average common shares outstanding 30,103,609 29,838,182 30,019,365 29,828,430 Net Income $ 8,077 $ 3,499 $ 17,650 $ 10,666 Diluted earnings per share $ 0.27 $ 0.12 $ 0.59 $ 0.36 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 900,839 967,339 900,839 977,426 1 Includes the common stock equivalents for restricted share rights that are dilutive.

Regulatory & Capital Matters (T

Regulatory & Capital Matters (Tables)	9 Months Ended
	Sep. 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 September 30, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 170,622 8.88 % $ 110,482 5.750 % N/A N/A Old Second Bank 243,109 12.67 110,330 5.750 $ 124,720 6.50 % Total capital to risk weighted assets Consolidated 239,269 12.46 177,627 9.250 N/A N/A Old Second Bank 259,569 13.52 177,590 9.250 191,989 10.00 Tier 1 capital to risk weighted assets Consolidated 221,579 11.54 139,207 7.250 N/A N/A Old Second Bank 243,109 12.67 139,111 7.250 153,502 8.00 Tier 1 capital to average assets Consolidated 221,579 9.69 91,467 4.00 N/A N/A Old Second Bank 243,109 10.63 91,480 4.00 114,350 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 September 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)	9 Months Ended
	Sep. 30, 2017
Fair Value Measurements
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis	September 30, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,990 $ - $ - $ 3,990 U.S. government agencies - 13,451 - 13,451 U.S. government agencies mortgage-backed - 11,030 - 11,030 States and political subdivisions - 216,672 12,360 229,032 Corporate bonds - 10,577 - 10,577 Collateralized mortgage obligations - 77,894 2,492 80,386 Asset-backed securities - 131,759 - 131,759 Collateralized loan obligations - 53,259 - 53,259 Loans held-for-sale - 1,641 - 1,641 Mortgage servicing rights - - 6,684 6,684 Interest rate swap agreements - 128 - 128 Mortgage banking derivatives - 289 - 289 Total $ 3,990 $ 516,700 $ 21,536 $ 542,226 Liabilities: Interest rate swap agreements, including risk participation agreements $ - $ 1,566 $ - $ 1,566 Total $ - $ 1,566 $ - $ 1,566 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 Interest rate swap agreements - 673 - 673 Mortgage banking derivatives - 287 - 287 Total $ - $ 512,371 $ 31,834 $ 544,205 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	Nine Months Ended September 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) 32 - (354) Included in other comprehensive income 7 (501) - Purchases, issuances, sales, and settlements Purchases - 10,994 - Issuances - - 951 Settlements (666) (20,359) (402) Ending balance September 30, 2017 $ 2,492 $ 12,360 $ 6,684 Nine Months Ended September 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) - (1,394) Included in other comprehensive income 9 - Purchases, issuances, sales, and settlements Issuances - 1,148 Settlements (78) (526) Ending balance September 30, 2016 $ - $ 5,075
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 September 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 $ 6,684 Discounted Cash Flow Discount Rate 10.0 - 1576.2% 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 %
Schedule of assets measured at fair value on a nonrecurring basis	September 30, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 45 $ 45 Other real estate owned, net 2 - - 9,024 9,024 Total $ - $ - $ 9,069 $ 9,069 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 of $51,000 and a valuation allowance of $6,000 resulting in a decrease of specific allocations within the allowance for loan losses of $92,000 for the nine months ended September 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 $9.0 million, which is made up of the outstanding balance of $18.7 million, net of a valuation allowance of $8.8 million and participations of $900,000 at September 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 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)	9 Months Ended
	Sep. 30, 2017
Fair Values of Financial Instruments
Schedule of carrying amount and estimated fair values of financial instruments	September 30, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 32,772 $ 32,772 $ 32,772 $ - $ - Interest bearing deposits with financial institutions 14,730 14,730 14,730 - - Securities available-for-sale 533,484 533,484 3,990 514,642 14,852 FHLBC and FRBC Stock 10,393 10,393 - 10,393 - Loans held-for-sale 1,641 1,641 - 1,641 - Loans, net 1,577,726 1,568,457 - - 1,568,457 Accrued interest receivable 8,669 8,669 - 8,669 - Financial liabilities: Noninterest bearing deposits $ 556,874 $ 556,874 $ 556,874 $ - $ - Interest bearing deposits 1,332,241 1,329,668 - 1,329,668 - Securities sold under repurchase agreements 26,853 26,853 - 26,853 - Other short-term borrowings 125,000 125,000 - 125,000 - Junior subordinated debentures 57,627 59,524 33,320 26,204 - Senior notes 44,033 46,958 - 46,958 - Interest rate swap agreements 1,439 1,439 - 1,439 - Borrowing interest payable 773 773 - 773 - Deposit interest payable 573 573 - 573 - 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)	9 Months Ended
	Sep. 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 September 30, 2017 December 31, 2016 Notional amount $ 25,774 $ 25,774 Unrealized loss (1,439) (994)
Schedule of derivatives not designated as hedging instruments	The following table presents derivatives not designated as hedging instruments as of September 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 $ 349,367 Other Assets $ 128 Other Liabilities $ 128 Interest rate lock commitments and forward contracts 28,591 Other Assets 289 N/A - Total $ 417 $ 128 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
Schedule of financial instrument commitments	September 30, 2017 December 31, 2016 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 177 $ 3,748 $ 3,925 $ 137 $ 4,047 $ 4,184 Commercial standby - 122 122 - 126 126 Performance standby 66 7,912 7,978 83 8,498 8,581 243 11,782 12,025 220 12,671 12,891 Non-borrower: Performance standby - 422 422 95 525 620 Total letters of credit $ 243 $ 12,204 $ 12,447 $ 315 $ 13,196 $ 13,511

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Dividend (Details)	Nov. 06, 2017USD ($)	Oct. 17, 2017$ / shares	Sep. 30, 2017USD ($)
Summary of Significant Accounting Policies
Decrease in future quarterly net interest income (in basis points)			10
Debt Instrument, Unamortized Premium			$ 25,000,000
Dividends Payable, Amount Per Share | $ / shares		$ 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	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Securities
Pretax realized losses on sale of available-for-sale securities	$ 371	$ 3,339	$ 1,076	$ 3,538
FHLB and FRB Stock
FHLBC stock	5,600		5,600		$ 3,100
FRB stock	$ 4,800		$ 4,800		$ 4,800

Securities - Amortized Cost and

Securities - Amortized Cost and Fair Value (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)item	Sep. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Securities Available-for-Sale
Amortized Cost	$ 533,116		$ 545,433
Gross Unrealized Gains	6,824		1,011
Gross Unrealized Losses	(6,456)		(14,606)
Fair Value	533,484		531,838
Other disclosures
Purchases	246,971	$ 153,252
Sales	$ 152,476	$ 271,374
Number of originators | item	3
U.S. Treasury
Securities Available-for-Sale
Amortized Cost	$ 4,001
Gross Unrealized Losses	(11)
Fair Value	3,990
U.S. government agencies
Securities Available-for-Sale
Amortized Cost	13,475		42,511
Gross Unrealized Gains	15
Gross Unrealized Losses	(39)		(977)
Fair Value	13,451		41,534
States and political subdivisions
Securities Available-for-Sale
Amortized Cost	224,648		68,718
Gross Unrealized Gains	5,173		258
Gross Unrealized Losses	(789)		(273)
Fair Value	229,032		68,703
Corporate bonds
Securities Available-for-Sale
Amortized Cost	10,823		10,957
Gross Unrealized Gains	20		9
Gross Unrealized Losses	(266)		(336)
Fair Value	10,577		10,630
Collateralized mortgage obligations
Securities Available-for-Sale
Amortized Cost	81,693		174,352
Gross Unrealized Gains	228		374
Gross Unrealized Losses	(1,535)		(3,799)
Fair Value	80,386		170,927
Asset-backed securities
Securities Available-for-Sale
Amortized Cost	134,542		146,391
Gross Unrealized Gains	865		341
Gross Unrealized Losses	(3,648)		(8,325)
Fair Value	131,759		138,407
FFEL
Other disclosures
Asset-backed securities	$ 110,600
Percentage of outstanding principal amount of loans guaranteed by US Department of Education	97
Percentage of total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal	10.42
FFEL | Reimbursement requests greater than 5 %
Other disclosures
Percentage of outstanding principal amount of loans guaranteed by US Department of Education	85
Percent of insured loan	5
FFEL | Reimbursement requests greater than 9 %
Other disclosures
Percentage of outstanding principal amount of loans guaranteed by US Department of Education	75
Percent of insured loan	9
Collateralized loan obligations
Securities Available-for-Sale
Amortized Cost	$ 52,803		102,504
Gross Unrealized Gains	505		29
Gross Unrealized Losses	(49)		(896)
Fair Value	53,259		$ 101,637
U.S. government agency mortgage-backed
Securities Available-for-Sale
Amortized Cost	11,131
Gross Unrealized Gains	18
Gross Unrealized Losses	(119)
Fair Value	11,030
GCO Education Loan Funding Corp
Securities Available-for-Sale
Amortized Cost	27,555
Fair Value	$ 26,505
GCO Education Loan Funding Corp | Stockholders' Equity
Other disclosures
Credit risk as a percentage of benchmark	10.00%
Towd Point Mortgage Trust
Securities Available-for-Sale
Amortized Cost	$ 29,544
Fair Value	$ 29,445
Towd Point Mortgage Trust | Stockholders' Equity
Other disclosures
Credit risk as a percentage of benchmark	10.00%
Student Loan Marketing Assocation
Securities Available-for-Sale
Amortized Cost	$ 25,654
Fair Value	$ 25,803

Securities - Contractural Matur

Securities - Contractural Maturities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Securities Available-for-Sale, Amortized Cost
Due in one year or less	$ 3,400
Due after one year through five years	5,846
Due after five years through ten years	16,105
Due after ten years	227,596
Debt securities excluding securities not due at a single maturity date	252,947
Total	$ 533,116	$ 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)	2.74%
Due after five years through ten years (as a percent)	2.52%
Due after ten years (as a percent)	2.98%
Debt securities (as a percent)	2.94%
Total (as a percent)	2.91%
Securities Available-for-Sale, Fair Value
Due in one year or less	$ 3,405
Due after one year through five years	5,831
Due after five years through ten years	16,057
Due after ten years	231,757
Debt securities	257,050
Fair Value	533,484	531,838
Collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Total	81,693	174,352
Securities Available-for-Sale, Fair Value
Fair Value	80,386	170,927
Asset-backed securities
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	134,542
Total	$ 134,542	146,391
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.41%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 131,759
Fair Value	131,759	138,407
Collateralized loan obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	52,803
Total	$ 52,803	102,504
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	4.38%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 53,259
Fair Value	53,259	$ 101,637
Mortgage-backed and collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 92,824
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	2.72%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 91,416

Securities - Unrealized Loss Po

Securities - Unrealized Loss Positions (Details) $ in Thousands	Sep. 30, 2017USD ($)security	Dec. 31, 2016USD ($)security
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	18	44
Greater than 12 months in an unrealized loss position | security	24	34
Total | security	42	78
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 1,404	$ 5,143
Greater than 12 months in an unrealized loss position	5,052	9,463
Total	6,456	14,606
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	71,145	216,050
Greater than 12 months in an unrealized loss position	134,583	213,060
Total	$ 205,728	$ 429,110
U.S. Treasury
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	1
Total | security	1
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 11
Total	11
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	3,990
Total	$ 3,990
U.S. government agencies
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	2	11
Greater than 12 months in an unrealized loss position | security		1
Total | security	2	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 39	$ 957
Greater than 12 months in an unrealized loss position		20
Total	39	977
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	6,701	40,636
Greater than 12 months in an unrealized loss position		898
Total	$ 6,701	$ 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	2
Greater than 12 months in an unrealized loss position | security	4
Total | security	6
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 13
Greater than 12 months in an unrealized loss position	106
Total	119
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	2,089
Greater than 12 months in an unrealized loss position	4,096
Total	$ 6,185
States and political subdivisions
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	7	12
Total | security	7	12
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 789	$ 273
Total	789	273
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	24,843	35,241
Total	$ 24,843	$ 35,241
Corporate bonds
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	3	2
Total | security	3	3
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position		$ 183
Greater than 12 months in an unrealized loss position	$ 266	153
Total	266	336
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position		4,817
Greater than 12 months in an unrealized loss position	10,078	5,328
Total	$ 10,078	$ 10,145
Collateralized mortgage obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	4	16
Greater than 12 months in an unrealized loss position | security	8	7
Total | security	12	23
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 238	$ 3,402
Greater than 12 months in an unrealized loss position	1,297	397
Total	1,535	3,799
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	21,281	117,752
Greater than 12 months in an unrealized loss position	43,684	18,109
Total	$ 64,965	$ 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	9	12
Total | security	10	16
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 265	$ 328
Greater than 12 months in an unrealized loss position	3,383	7,997
Total	3,648	8,325
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	4,293	17,604
Greater than 12 months in an unrealized loss position	76,725	107,112
Total	$ 81,018	$ 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	$ 49
Greater than 12 months in an unrealized loss position		$ 896
Total	49	896
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	7,948
Greater than 12 months in an unrealized loss position		81,613
Total	$ 7,948	$ 81,613

Securities - Realized Gain (Los

Securities - Realized Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Securities
Sales			$ 152,476	$ 271,374
Gross realized gains on securities	$ 474	$ 1,380	911	1,518
Gross realized losses on securities	(371)	(3,339)	(1,076)	(3,538)
Securities (losses) gains, net	103	(1,959)	(165)	(2,020)
Income tax benefit (expense) on net realized gains	$ (42)	$ 782	$ 64	$ 807

Loans - Major Classifications (

Loans - Major Classifications (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Loans
Total loans, gross	$ 1,593,568	$ 1,477,592
Net deferred loan fees	623	1,217
Total Loans	1,594,191	1,478,809	$ 1,202,852
Other
Loans
Total loans, gross	10,550	11,973
Commercial
Loans
Total loans, gross	257,356	228,113
Total Loans	257,356	228,113	136,819
Real estate - commercial
Loans
Total loans, gross	739,136	736,247
Total Loans	739,136		617,280
Real estate - commercial | Construction Loans
Loans
Total loans, gross	94,868	64,720
Total Loans	94,868		28,786
Real estate - residential
Loans
Total loans, gross	419,583	377,851
Total Loans	419,583		357,846
Consumer
Loans
Total loans, gross	2,770	3,237
Total Loans	2,770	3,237	3,325
Lease financing receivables
Loans
Total loans, gross	69,305	55,451
Total Loans	$ 69,305	$ 55,451	$ 47,215

Loans - Major Classifications -

Loans - Major Classifications - Loan Concentrations (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 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	78.60%
Talmer
Loans
Loans			$ 221

Loans - Aging Analysis (Details

Loans - Aging Analysis (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Aged analysis of past due loans
Total Past Due	$ 4,466	$ 5,139
Current	1,575,601	1,458,387
Nonaccrual	14,124	15,283
Total Loans	1,594,191	1,478,809	$ 1,202,852
Recorded Investment 90 days or Greater Past Due and Accruing	1,207
30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	2,253	3,959
60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	1,044	1,180
90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	1,169
Multifamily
Aged analysis of past due loans
Current	117,544	96,502
Nonaccrual	4,757
Total Loans	122,301	96,502
Commercial
Aged analysis of past due loans
Total Past Due	89	131
Current	257,060	227,742
Nonaccrual	207	240
Total Loans	257,356	228,113	136,819
Commercial | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		57
Commercial | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	89	74
Lease financing receivables
Aged analysis of past due loans
Total Past Due	834	286
Current	68,275	54,799
Nonaccrual	196	366
Total Loans	69,305	55,451	47,215
Recorded Investment 90 days or Greater Past Due and Accruing	156
Lease financing receivables | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	685	286
Lease financing receivables | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	149
Real estate - commercial
Aged analysis of past due loans
Total Loans	739,136		617,280
Real estate - commercial | Owner occupied general purpose
Aged analysis of past due loans
Total Past Due	790	758
Current	154,429	135,599
Nonaccrual	457	879
Total Loans	155,676	137,236
Recorded Investment 90 days or Greater Past Due and Accruing	561
Real estate - commercial | Owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	253	758
Real estate - commercial | Owner occupied general purpose | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	537
Real estate - commercial | Owner occupied special purpose
Aged analysis of past due loans
Total Past Due	513
Current	172,866	177,755
Nonaccrual	359	385
Total Loans	173,738	178,140
Real estate - commercial | Owner occupied special purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	513
Real estate - commercial | Non-owner occupied general purpose
Aged analysis of past due loans
Total Past Due	649	1,046
Current	251,933	229,315
Nonaccrual	1,165	1,930
Total Loans	253,747	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	649	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
Total Past Due	248
Current	93,498	118,052
Nonaccrual		1,013
Total Loans	93,746	119,065
Real estate - commercial | Non-owner occupied special purpose | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	248
Real estate - commercial | Retail properties
Aged analysis of past due loans
Current	45,149	53,474
Nonaccrual	1,113	1,179
Total Loans	46,262	54,653
Real estate - commercial | Farm
Aged analysis of past due loans
Total Past Due	383	1,353
Current	15,584	13,509
Total Loans	15,967	14,862
Recorded Investment 90 days or Greater Past Due and Accruing	387
Real estate - commercial | Farm | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		1,353
Real estate - commercial | Farm | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	383
Real estate - residential
Aged analysis of past due loans
Total Loans	419,583		357,846
Real estate - residential | Investor
Aged analysis of past due loans
Total Past Due		237
Current	52,361	54,924
Nonaccrual	492	936
Total Loans	52,853	56,097
Real estate - residential | Investor | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		237
Real estate - residential | Owner occupied
Aged analysis of past due loans
Total Past Due	40	274
Current	124,414	116,900
Nonaccrual	4,127	6,452
Total Loans	128,581	123,626
Real estate - residential | Owner occupied | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	40	274
Real estate - residential | Revolving and junior liens
Aged analysis of past due loans
Total Past Due	854	630
Current	113,956	99,374
Nonaccrual	1,038	1,622
Total Loans	115,848	101,626
Recorded Investment 90 days or Greater Past Due and Accruing	103
Real estate - residential | Revolving and junior liens | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	732	225
Real estate - residential | Revolving and junior liens | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	22	405
Real estate - residential | Revolving and junior liens | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	100
Consumer
Aged analysis of past due loans
Total Past Due	2	46
Current	2,760	3,191
Nonaccrual	8
Total Loans	2,770	3,237	3,325
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	1	14
Current	11,172	13,176
Total Loans	11,173	13,190	11,581
All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	1	14
Construction Loans | Real estate - commercial
Aged analysis of past due loans
Total Loans	94,868		$ 28,786
Construction Loans | Real estate - commercial | Homebuilder
Aged analysis of past due loans
Current	2,644	3,883
Total Loans	2,644	3,883
Construction Loans | Real estate - commercial | Land
Aged analysis of past due loans
Current	3,235	3,029
Total Loans	3,235	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Aged analysis of past due loans
Current	34,817	22,654
Nonaccrual		74
Total Loans	34,817	22,728
Construction Loans | Real estate - commercial | All other
Aged analysis of past due loans
Total Past Due	63	364
Current	53,904	34,509
Nonaccrual	205	207
Total Loans	54,172	35,080
Construction Loans | Real estate - commercial | All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	$ 63	$ 364

Loans - Inclusion (Details)

Loans - Inclusion (Details)	9 Months Ended
	Sep. 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	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Loans by risk rating
Total Loans	$ 1,594,191	$ 1,478,809	$ 1,202,852
Multifamily
Loans by risk rating
Total Loans	122,301	96,502
Commercial
Loans by risk rating
Total Loans	257,356	228,113	136,819
Lease financing receivables
Loans by risk rating
Total Loans	69,305	55,451	47,215
Real estate - commercial
Loans by risk rating
Total Loans	739,136		617,280
Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	155,676	137,236
Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	173,738	178,140
Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	253,747	232,291
Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	93,746	119,065
Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	46,262	54,653
Real estate - commercial | Farm
Loans by risk rating
Total Loans	15,967	14,862
Real estate - residential
Loans by risk rating
Total Loans	419,583		357,846
Real estate - residential | Investor
Loans by risk rating
Total Loans	52,853	56,097
Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	128,581	123,626
Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	115,848	101,626
Consumer
Loans by risk rating
Total Loans	2,770	3,237	3,325
All other
Loans by risk rating
Total Loans	11,173	13,190	11,581
Pass
Loans by risk rating
Total Loans	1,551,885	1,430,321
Pass | Multifamily
Loans by risk rating
Total Loans	117,544	96,502
Pass | Commercial
Loans by risk rating
Total Loans	245,603	214,028
Pass | Lease financing receivables
Loans by risk rating
Total Loans	68,274	53,366
Pass | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	153,039	135,503
Pass | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	172,216	172,353
Pass | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	250,497	229,448
Pass | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	90,113	114,293
Pass | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	43,922	52,207
Pass | Real estate - commercial | Farm
Loans by risk rating
Total Loans	13,472	11,840
Pass | Real estate - residential | Investor
Loans by risk rating
Total Loans	52,205	55,001
Pass | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	123,600	115,831
Pass | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	113,871	99,286
Pass | Consumer
Loans by risk rating
Total Loans	2,762	3,236
Pass | All other
Loans by risk rating
Total Loans	11,173	13,165
Special Mention
Loans by risk rating
Total Loans	18,577	22,004
Special Mention | Commercial
Loans by risk rating
Total Loans	11,371	11,558
Special Mention | Lease financing receivables
Loans by risk rating
Total Loans		976
Special Mention | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	1,274	53
Special Mention | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	1,163	5,402
Special Mention | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	2,085	913
Special Mention | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,227	1,267
Special Mention | Real estate - commercial | Farm
Loans by risk rating
Total Loans		1,240
Special Mention | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	563	570
Special Mention | All other
Loans by risk rating
Total Loans		25
Substandard
Loans by risk rating
Total Loans	23,729	26,484
Substandard | Multifamily
Loans by risk rating
Total Loans	4,757
Substandard | Commercial
Loans by risk rating
Total Loans	382	2,527
Substandard | Lease financing receivables
Loans by risk rating
Total Loans	1,031	1,109
Substandard | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	1,363	1,680
Substandard | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	359	385
Substandard | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	1,165	1,930
Substandard | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	3,633	4,772
Substandard | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,113	1,179
Substandard | Real estate - commercial | Farm
Loans by risk rating
Total Loans	2,495	1,782
Substandard | Real estate - residential | Investor
Loans by risk rating
Total Loans	648	1,096
Substandard | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	4,418	7,225
Substandard | Real estate - residential | Revolving and junior liens
Loans by risk rating
Total Loans	1,977	2,340
Substandard | Consumer
Loans by risk rating
Total Loans	8	1
Construction Loans | Real estate - commercial
Loans by risk rating
Total Loans	94,868		$ 28,786
Construction Loans | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	2,644	3,883
Construction Loans | Real estate - commercial | Land
Loans by risk rating
Total Loans	3,235	3,029
Construction Loans | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	34,817	22,728
Construction Loans | Real estate - commercial | All other
Loans by risk rating
Total Loans	54,172	35,080
Construction Loans | Pass | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	2,644	3,883
Construction Loans | Pass | Real estate - commercial | Land
Loans by risk rating
Total Loans	3,235	3,029
Construction Loans | Pass | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	34,817	22,654
Construction Loans | Pass | Real estate - commercial | All other
Loans by risk rating
Total Loans	52,898	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		74
Construction Loans | Substandard | Real estate - commercial | All other
Loans by risk rating
Total Loans	$ 380	$ 384

Loans - Repossessed Assets (Det

Loans - Repossessed Assets (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	$ 1,200,000
Other real estate owned	9,024,000	$ 11,724,000	$ 11,916,000	$ 14,144,000	$ 16,252,000	$ 19,141,000
Real estate - residential
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	1,200,000		1,800,000
Other real estate owned	$ 937,000		$ 225,000

Loans - Impaired Loans - Record

Loans - Impaired Loans - Recorded Investment, Unpaid Principal Balance and Related Allowance (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Recorded Investment
With no related allowance recorded	$ 20,035	$ 21,238
With an allowance recorded	51	1,049
Total impaired loans	20,086	22,287
Unpaid Principal Balance
With no related allowance recorded	22,910	25,321
With an allowance recorded	51	1,448
Total impaired loans	22,961	26,769
Related Allowance
With an allowance recorded	6	1,049
Commercial
Recorded Investment
With no related allowance recorded	207	240
Unpaid Principal Balance
With no related allowance recorded	360	388
Lease financing receivables
Recorded Investment
With no related allowance recorded	196	366
Unpaid Principal Balance
With no related allowance recorded	227	371
Real estate - commercial | Owner occupied general purpose
Recorded Investment
With no related allowance recorded	457	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	359	385
Unpaid Principal Balance
With no related allowance recorded	509	518
Real estate - commercial | Non-owner occupied general purpose
Recorded Investment
With no related allowance recorded	1,218	1,744
With an allowance recorded		246
Unpaid Principal Balance
With no related allowance recorded	1,592	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	1,113	1,179
Unpaid Principal Balance
With no related allowance recorded	1,199	1,235
Real estate - residential | Investor
Recorded Investment
With no related allowance recorded	1,374	1,841
Unpaid Principal Balance
With no related allowance recorded	1,627	2,308
Real estate - residential | Multifamily
Recorded Investment
With no related allowance recorded	4,757
Unpaid Principal Balance
With no related allowance recorded	4,965
Real estate - residential | Owner occupied
Recorded Investment
With no related allowance recorded	8,150	9,824
With an allowance recorded		803
Unpaid Principal Balance
With no related allowance recorded	9,524	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	1,991	2,484
With an allowance recorded	51
Unpaid Principal Balance
With no related allowance recorded	2,173	3,018
With an allowance recorded	51
Related Allowance
With an allowance recorded	6
Consumer
Recorded Investment
With no related allowance recorded	8
Unpaid Principal Balance
With no related allowance recorded	8
Construction Loans | Real estate - commercial | Commercial speculative
Recorded Investment
With no related allowance recorded		74
Unpaid Principal Balance
With no related allowance recorded		81
Construction Loans | Real estate - commercial | All other
Recorded Investment
With no related allowance recorded	205	207
Unpaid Principal Balance
With no related allowance recorded	$ 231	$ 221

Loans - Impaired Loans - Averag

Loans - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Average Recorded Investment
With no related allowance recorded	$ 20,636	$ 21,492
With an allowance recorded	551	513
Total impaired loans	21,187	22,005
Interest Income Recognized
With no related allowance recorded	184	232
With an allowance recorded	2	31
Total impaired loans	186	263
Commercial
Average Recorded Investment
With no related allowance recorded	123	326
With an allowance recorded		2
Lease financing receivables
Average Recorded Investment
With no related allowance recorded	281
Real estate - commercial | Owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,169	2,412
Interest Income Recognized
With no related allowance recorded		66
Real estate - commercial | Owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	372	580
Real estate - commercial | Non-owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,481	1,655
With an allowance recorded	123	132
Interest Income Recognized
With no related allowance recorded	2	2
With an allowance recorded		31
Real estate - commercial | Non-owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	507	506
Real estate - commercial | Retail properties
Average Recorded Investment
With no related allowance recorded	1,146	990
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	1,607	1,864
Interest Income Recognized
With no related allowance recorded	36	35
Real estate - residential | Multifamily
Average Recorded Investment
With no related allowance recorded	2,379
Real estate - residential | Owner occupied
Average Recorded Investment
With no related allowance recorded	8,987	9,916
With an allowance recorded	402	356
Interest Income Recognized
With no related allowance recorded	119	120
Real estate - residential | Revolving and junior liens
Average Recorded Investment
With no related allowance recorded	2,237	2,527
With an allowance recorded	26	23
Interest Income Recognized
With no related allowance recorded	27	9
With an allowance recorded	2
Consumer
Average Recorded Investment
With no related allowance recorded	104
Construction Loans | Real estate - commercial | Commercial speculative
Average Recorded Investment
With no related allowance recorded	37	$ 80
Construction Loans | Real estate - commercial | All other
Average Recorded Investment
With no related allowance recorded	$ 206

Loans - TDR (Details)

Loans - TDR (Details)	3 Months Ended			9 Months Ended
	Sep. 30, 2017USD ($)contract	Sep. 30, 2016USD ($)contract	Mar. 31, 2016USD ($)contract	Sep. 30, 2017USD ($)contract	Sep. 30, 2016USD ($)contract	Dec. 31, 2016USD ($)
Troubled debt restructurings - modified during the period
# of contracts | contract	4			10	8
Pre-modification recorded investment	$ 176,000	$ 70,000		$ 575,000	$ 1,090,000
Post-modification recorded investment	157,000	$ 70,000		542,000	949,000
TDR's defaulted
# of contracts | contract		1
Pre-modification outstanding recorded investment during the period				0	$ 0
Other information
Total Past Due	4,466,000			4,466,000		$ 5,139,000
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					$ 211,000
Real estate - commercial | Owner occupied special purpose
Other information
Total Past Due	513,000			513,000
Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	790,000			790,000		758,000
Real estate - commercial | Non-owner occupied general purpose
Other information
Total Past Due	649,000			649,000		1,046,000
Real estate - residential | Investor
Other information
Total Past Due						237,000
Real estate - residential | Owner occupied
Other information
Total Past Due	$ 40,000			$ 40,000		274,000
Real estate - residential | Owner occupied | Other
Troubled debt restructurings - modified during the period
# of contracts | contract	1			1
Pre-modification recorded investment	$ 42,000			$ 42,000
Post-modification recorded investment	$ 42,000			$ 42,000
Real estate - residential | Owner occupied | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract	1			1	1
Pre-modification recorded investment	$ 36,000			$ 36,000	$ 239,000
Post-modification recorded investment	33,000			33,000	$ 235,000
Real estate - residential | Revolving and junior liens
Other information
Total Past Due	$ 854,000			$ 854,000		630,000
Real estate - residential | Revolving and junior liens | Other
Troubled debt restructurings - modified during the period
# of contracts | contract	1		1	7	1
Pre-modification recorded investment	$ 49,000		$ 70,000	$ 448,000	$ 70,000
Post-modification recorded investment	$ 33,000		$ 70,000	$ 418,000	$ 70,000
Real estate - residential | Revolving and junior liens | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract	1			1	4
Pre-modification recorded investment	$ 49,000			$ 49,000	$ 469,000
Post-modification recorded investment	49,000			49,000	$ 433,000
Commercial
Other information
Total Past Due	89,000			89,000		$ 131,000
90 Days or Greater Past Due
Other information
Total Past Due	1,169,000			1,169,000
90 Days or Greater Past Due | Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	537,000			537,000
90 Days or Greater Past Due | Real estate - residential | Revolving and junior liens
Other information
Total Past Due	$ 100,000			$ 100,000

Allowance for Loan Losses (Deta

Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Allowance for loan losses:
Beginning Balance	$ 15,836	$ 15,822	$ 16,158	$ 16,223
Charge-offs	241	1,197	1,998	2,508
Recoveries	570	358	1,255	1,268
Provision (release)	300		1,050
Ending Balance	16,465	14,983	16,465	14,983
Ending balance: Individually evaluated for impairment	6	514	6	514
Ending balance: Collectively evaluated for impairment	16,459	14,469	16,459	14,469
Loans:
Ending balance	1,594,191	1,202,852	1,594,191	1,202,852	$ 1,478,809
Ending balance: Individually evaluated for impairment	20,086	23,123	20,086	23,123
Ending balance: Collectively evaluated for impairment	1,574,105	1,179,729	1,574,105	1,179,729
Commercial
Allowance for loan losses:
Beginning Balance	2,150	1,420	1,629	2,041
Charge-offs	13	76	20	95
Recoveries	6	10	13	22
Provision (release)	(104)	141	417	(473)
Ending Balance	2,039	1,495	2,039	1,495
Ending balance: Collectively evaluated for impairment	2,039	1,495	2,039	1,495
Loans:
Ending balance	257,356	136,819	257,356	136,819	228,113
Ending balance: Individually evaluated for impairment	207	583	207	583
Ending balance: Collectively evaluated for impairment	257,149	136,236	257,149	136,236
Lease financing receivables
Allowance for loan losses:
Beginning Balance	791	275	633	55
Charge-offs	98		215	13
Provision (release)	77	71	352	304
Ending Balance	770	346	770	346
Ending balance: Collectively evaluated for impairment	770	346	770	346
Loans:
Ending balance	69,305	47,215	69,305	47,215	55,451
Ending balance: Individually evaluated for impairment	196		196
Ending balance: Collectively evaluated for impairment	69,109	47,215	69,109	47,215
Real estate - commercial
Allowance for loan losses:
Beginning Balance	8,107	8,954	9,547	9,013
Charge-offs	22	792	300	1,484
Recoveries	43	27	124	255
Provision (release)	505	753	(738)	1,158
Ending Balance	8,633	8,942	8,633	8,942
Ending balance: Individually evaluated for impairment		264		264
Ending balance: Collectively evaluated for impairment	8,633	8,678	8,633	8,678
Loans:
Ending balance	739,136	617,280	739,136	617,280
Ending balance: Individually evaluated for impairment	3,147	8,426	3,147	8,426
Ending balance: Collectively evaluated for impairment	735,989	608,854	735,989	608,854
Real estate - residential
Allowance for loan losses:
Beginning Balance	2,576	2,933	2,692	1,694
Charge-offs	7	220	1,178	657
Recoveries	459	199	850	718
Provision (release)	(607)	(577)	57	580
Ending Balance	2,421	2,335	2,421	2,335
Ending balance: Individually evaluated for impairment	6	250	6	250
Ending balance: Collectively evaluated for impairment	2,415	2,085	2,415	2,085
Loans:
Ending balance	419,583	357,846	419,583	357,846
Ending balance: Individually evaluated for impairment	16,323	14,038	16,323	14,038
Ending balance: Collectively evaluated for impairment	403,260	343,808	403,260	343,808
Consumer
Allowance for loan losses:
Beginning Balance	848	862	833	1,190
Charge-offs	82	100	262	250
Recoveries	45	57	166	184
Provision (release)	(1)	118	73	(187)
Ending Balance	810	937	810	937
Ending balance: Collectively evaluated for impairment	810	937	810	937
Loans:
Ending balance	2,770	3,325	2,770	3,325	3,237
Ending balance: Individually evaluated for impairment	8		8
Ending balance: Collectively evaluated for impairment	2,762	3,325	2,762	3,325
All other
Allowance for loan losses:
Beginning Balance	507	998	435	1,965
Recoveries	6	5	13	18
Provision (release)	265	(545)	330	(1,525)
Ending Balance	778	458	778	458
Ending balance: Collectively evaluated for impairment	778	458	778	458
Loans:
Ending balance	11,173	11,581	11,173	11,581	$ 13,190
Ending balance: Collectively evaluated for impairment	11,173	11,581	11,173	11,581
Construction Loans | Real estate - commercial
Allowance for loan losses:
Beginning Balance	857	380	389	265
Charge-offs	19	9	23	9
Recoveries	11	60	89	71
Provision (release)	165	39	559	143
Ending Balance	1,014	470	1,014	470
Ending balance: Collectively evaluated for impairment	1,014	470	1,014	470
Loans:
Ending balance	94,868	28,786	94,868	28,786
Ending balance: Individually evaluated for impairment	205	76	205	76
Ending balance: Collectively evaluated for impairment	$ 94,663	$ 28,710	$ 94,663	$ 28,710

Other Real Estate Owned (Detail

Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Activity in the other real estate owned (OREO) portfolio, net of valuation reserve
Balance at beginning of period	$ 11,724	$ 16,252	$ 11,916	$ 19,141
Property additions	176	255	3,796	1,223
Property improvements		4		16
Less: Property disposals, net of gains/losses	1,956	2,002	5,058	4,931
Less: Period valuation adjustments	920	365	1,630	1,305
Balance at end of period	9,024	14,144	9,024	14,144
Activity in the valuation allowance
Balance at beginning of period	8,304	13,377	9,982	14,127
Provision for unrealized losses	920	365	1,630	1,305
Reductions taken on sales	(421)	(488)	(2,809)	(2,178)
Balance at end of period	8,803	13,254	8,803	13,254
Expenses related to foreclosed assets, net of lease revenue
Gain on sales, net	(276)	(249)	(454)	(316)
Provision for unrealized losses	920	365	1,630	1,305
Operating expenses	221	361	1,037	1,217
Less: Lease revenue	185	51	285	163
Expenses related to OREO, net of lease revenue	$ 680	$ 426	$ 1,928	$ 2,043

Deposits - Components and Matur

Deposits - Components and Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Deposits
Noninterest bearing demand	$ 556,874	$ 513,688
Savings	260,268	256,159
NOW accounts	417,054	419,417
Money market accounts	270,647	275,273
Certificates of deposit of less than $100,000	219,152	228,993
Certificates of deposit of $100,000 up to $250,000	114,373	110,992
Certificates of deposit of $250,000 or more	50,747	62,263
Total deposits	$ 1,889,115	$ 1,866,785

Borrowings - Summary (Details)

Borrowings - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Borrowings
Senior Notes	$ 44,033	$ 43,998
Total borrowings	253,513	197,304
Securities sold under repurchase agreements
Borrowings
Total borrowings	26,853	25,715
FHLBC advances
Borrowings
Total borrowings	125,000	70,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,627	$ 57,591

Borrowings - Additional informa

Borrowings - Additional information (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2016USD ($)	Sep. 30, 2017USD ($)item
Borrowings
Semi annual interest rate	5.75%
Bank owned FHLBC stock	$ 3,100,000	$ 5,600,000
Subordinated Debt.	45,000,000
Senior debt	500,000
Senior notes issuance and cash on hand	45,000,000
Senior notes	$ 43,998,000	44,033,000
Debt Instrument, Term	10 years
Interest rate term	5 years
Senior note debt issuance costs	$ 1,000,000
Total borrowings	$ 197,304,000	253,513,000
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	26,900,000
Fair value of the pledged collateral	43,000,000	$ 41,500,000
Number of customers having secured balances exceeding specified percentage of stockholders equity | item		0
Total borrowings	25,715,000	$ 26,853,000
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	$ 125,000,000
Bank owned FHLBC stock		5,600,000
Fair value of securities collateralized		87,400,000
Principal balance of loans collateralized		251,300,000
Combined collateral value		273,800,000
Amount available for additional borrowings		74,500,000
Total borrowings	70,000,000	125,000,000
Junior subordinated debentures
Borrowings
Total borrowings	$ 57,591,000	$ 57,627,000

Junior Subordinated Debentures

Junior Subordinated Debentures - Issuance (Details) - USD ($) $ in Thousands	1 Months Ended				9 Months Ended
	Jun. 30, 2017	Apr. 30, 2007	Jul. 31, 2003	Jun. 30, 2003	Sep. 30, 2017	Dec. 31, 2016
Junior subordinated debentures
Junior subordinated debentures					$ 57,627	$ 57,591
Junior Suordinated Debentures issuance cost						1,000
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)	4.30%
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
Junior subordinated debentures
Junior Suordinated Debentures issuance cost					$ 752	$ 787
Junior subordinated debentures | Old Second Capital Trust I
Junior subordinated debentures
Junior subordinated debentures					32,600
Junior subordinated debentures | Old Second Capital Trust II
Junior subordinated debentures
Junior subordinated debentures					$ 25,800

Equity Compensation Plans - Opt

Equity Compensation Plans - Options (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Total compensation cost			$ 925,100,000	$ 485,000,000
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)			3 months 18 days
Exercisable at end of period			3 months 18 days

Equity Compensation Plans - Sum

Equity Compensation Plans - Summary of stock option activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Stock based compensation	$ 897	$ 482
2014 Plan
Equity Compensation Plans
Number of shares authorized			975,000	600,000	375,000
Number of shares issuable	453,209

Equity Compensation Plans - Res

Equity Compensation Plans - Restricted Stock and RSUs (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 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)	161,500	130,000
Vested (in shares)	(91,500)
Forfeited (in shares)	(14,000)
Nonvested at the end of the period (in shares)	465,000
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 5.89
Granted (in dollars per share)	11.04
Vested (in dollars per share)	5.07
Forfeited (in dollars per share)	7.53
Nonvested at the end of the period (in dollars per share)	$ 7.79
Additional information
Total unrecognized compensation cost of restricted awards	$ 2	$ 1.1
Expected weighted-average period for recognition of unrecognized compensation	2 years 1 month 10 days	1 year 11 months 27 days

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Basic earnings per share:
Weighted-average common shares outstanding	29,627,086		29,554,716	29,591,811	29,524,796
Net income	$ 8,077		$ 3,499	$ 17,650	$ 10,666
Basic earnings per share (in dollars per share)	$ 0.27		$ 0.12	$ 0.60	$ 0.36
Diluted earnings per share:
Weighted-average common shares outstanding	29,627,086		29,554,716	29,591,811	29,524,796
Diluted average common shares outstanding	30,103,609		29,838,182	30,019,365	29,828,430
Diluted earnings per share (in dollars per share)	$ 0.27		$ 0.12	$ 0.59	$ 0.36
Warrant term		10 years
Antidilutive options and warrants
Diluted earnings per share:
Dilutive effect of nonvested restricted awards (in shares)	2,556		1,238	2,473	413
One 10 year warrant	900,839		967,339	900,839	977,426
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
Warrant term	10 years		10 years
Restricted stock and restricted stock units
Diluted earnings per share:
Dilutive effect of nonvested restricted awards (in shares)	473,967		282,228	425,081	303,221

Regulatory & Capital Matters (D

Regulatory & Capital Matters (Details)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	9.69%	8.90%
Risk-based capital ratio (as a percent)	12.46%	12.29%
Old Second National Bank
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	10.63%	10.24%
Risk-based capital ratio (as a percent)	13.52%	13.45%
Tier One leverage ratio, basis point increase (as a percent)	0.39%
Risk-based capital ratio, basis point decrease (as a percent)	0.07%
Minimum | Old Second National Bank
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	Sep. 30, 2017	Dec. 31, 2016
Common equity tier 1 capital to risk weighted assets
Actual	$ 170,622	$ 154,537
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 110,482	$ 90,411
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	8.88%	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	$ 239,269	$ 216,769
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 177,627	$ 152,126
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	12.46%	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	$ 221,579	$ 191,988
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 139,207	$ 116,904
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	11.54%	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	$ 221,579	$ 191,988
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 91,467	$ 86,287
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	9.69%	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	$ 243,109	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	110,330	90,456
Minimum Required to Be Well Capitalized	$ 124,720	$ 114,724
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.67%	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	$ 259,569	$ 237,306
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	177,590	152,176
Minimum Required to Be Well Capitalized	$ 191,989	$ 176,436
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	13.52%	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	$ 243,109	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	139,111	116,930
Minimum Required to Be Well Capitalized	$ 153,502	$ 141,199
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.67%	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	$ 243,109	$ 221,153
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	91,480	86,388
Minimum Required to Be Well Capitalized	$ 114,350	$ 107,985
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	10.63%	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 64

Regulatory & Capital Matters - Dividend Restrictions and Deferrals (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 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 ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Assets:
Securities available-for-sale	$ 533,484	$ 531,838
Mortgage servicing rights	6,684	6,489
U.S. Treasury
Assets:
Securities available-for-sale	3,990
U.S. government agencies
Assets:
Securities available-for-sale	13,451	41,534
U.S. government agency mortgage-backed
Assets:
Securities available-for-sale	11,030
States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Purchases	10,994
Assets:
Securities available-for-sale	229,032	68,703
Corporate bonds
Assets:
Securities available-for-sale	10,577	10,630
Collateralized mortgage obligations
Assets:
Securities available-for-sale	80,386	170,927
Asset-backed securities
Assets:
Securities available-for-sale	131,759	138,407
Collateralized loan obligations
Assets:
Securities available-for-sale	53,259	101,637
Level 1
Assets:
Securities available-for-sale	3,990
Level 2
Assets:
Securities available-for-sale	514,642	506,493
Loans held-for-sale	1,641	4,918
Liabilities:
Other liabilities	1,439	994
Level 3
Assets:
Securities available-for-sale	14,852	25,345
Recurring
Assets:
Total financial assets	542,226	544,205
Liabilities:
Total	1,566	1,667
Recurring | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	1,641	4,918
Mortgage servicing rights	6,684	6,489
Recurring | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,566	1,667
Recurring | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	128	673
Recurring | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	289	287
Recurring | U.S. Treasury | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	3,990
Recurring | U.S. government agencies | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	13,451
Recurring | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	11,030	41,534
Recurring | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	229,032	68,703
Recurring | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	10,577	10,630
Recurring | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	80,386	170,927
Recurring | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	131,759	138,407
Recurring | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	53,259	101,637
Recurring | Level 1
Assets:
Total financial assets	3,990
Recurring | Level 1 | U.S. Treasury | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	3,990
Recurring | Level 2
Assets:
Total financial assets	516,700	512,371
Liabilities:
Total	1,566	1,667
Recurring | Level 2 | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	1,641	4,918
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	1,566	1,667
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	128	673
Recurring | Level 2 | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	289	287
Recurring | Level 2 | U.S. government agencies | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	13,451
Recurring | Level 2 | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	11,030	41,534
Recurring | Level 2 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	216,672	46,477
Recurring | Level 2 | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	10,577	10,630
Recurring | Level 2 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	77,894	167,808
Recurring | Level 2 | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	131,759	138,407
Recurring | Level 2 | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	53,259	101,637
Recurring | Level 3
Assets:
Total financial assets	21,536	31,834
Recurring | Level 3 | Finite-Lived Intangible Assets [Member]
Assets:
Mortgage servicing rights	6,684	6,489
Recurring | Level 3 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,360	22,226
Recurring | Level 3 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	$ 2,492	$ 3,119

Fair Value Measurements - Chang

Fair Value Measurements - Changes in Level 3 (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Collateralized loan obligations
Changes in Level 3
Beginning balance	$ 3,119
Total gains or losses
Included in other comprehensive income	7
Purchases, issuances, sales, and settlements
Settlements	(666)
Ending balance	2,492
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	32
States and political subdivisions
Changes in Level 3
Beginning balance	22,226	$ 111
Total gains or losses
Included in other comprehensive income	(501)	9
Purchases, issuances, sales, and settlements
Purchases	10,994
Settlements	(20,359)	(78)
Ending balance	12,360	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)		(1,394)
Purchases, issuances, sales, and settlements
Issuances	951	1,148
Settlements	(402)	(526)
Ending balance	6,684	$ 5,075
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	$ (354)

Fair Value Measurements - Quant

Fair Value Measurements - Quantitative and Qualitative Information (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 6,684	$ 6,489
Minimum
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)		10.00%
Maximum
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)		17.00%
Weighted Average
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)		10.20%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 6,684
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Minimum
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)	10.00%
Prepayment speed (as a percent)	7.00%	6.50%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Maximum
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)	1576.20%
Prepayment speed (as a percent)	68.30%	77.80%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Weighted Average
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)	10.20%
Prepayment speed (as a percent)	10.00%	9.60%

Fair Value Measurements - Nonre

Fair Value Measurements - Nonrecurring (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Assets and liabilities measured at fair value
Valuation allowance	$ 6,000	$ 1,049,000
Carrying value of other real estate owned	9,024,000	11,916,000	$ 11,724,000	$ 14,144,000	$ 16,252,000	$ 19,141,000
OREO Valuation allowance	8,803,000	9,982,000	$ 8,304,000	$ 13,254,000	$ 13,377,000	$ 14,127,000
Nonrecurring
Assets and liabilities measured at fair value
Total	9,069,000	11,916,000
Nonrecurring | Impaired loans
Assets and liabilities measured at fair value
Total	45,000
Valuation allowance	6,000	1,000,000
Increase (decrease) of specific allocations within the provision for loan losses	92,000	1,000,000
Nonrecurring | Impaired loans | Carrying Amount
Assets and liabilities measured at fair value
Total	51,000
Nonrecurring | Other real estate owned
Assets and liabilities measured at fair value
Total	9,024,000	11,916,000
Carrying value of other real estate owned	9,000,000	11,900,000
Outstanding balance	18,700,000	23,500,000
OREO Valuation allowance	8,800,000	10,000,000
OREO participations	900,000,000,000	1,600,000
Nonrecurring | Level 3
Assets and liabilities measured at fair value
Total	9,069,000	11,916,000
Nonrecurring | Level 3 | Impaired loans
Assets and liabilities measured at fair value
Total	45,000
Nonrecurring | Level 3 | Other real estate owned
Assets and liabilities measured at fair value
Total	$ 9,024,000	$ 11,916,000

Fair Values of Financial Inst69

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Financial assets:
Cash and due from banks	$ 32,772	$ 33,805
Interest bearing deposits with financial institutions	14,730	13,529
Securities available-for-sale	533,484	531,838
FHLBC and FRBC Stock	10,393	7,918
Bank-owned life insurance	61,403	60,332
Financial liabilities:
Noninterest bearing deposits	556,874	513,688
Other short-term borrowings	125,000	70,000
Junior subordinated debentures	57,627	57,591
Carrying Amount
Financial assets:
Cash and due from banks	32,772	33,805
Interest bearing deposits with financial institutions	14,730	13,529
Securities available-for-sale	533,484	531,838
FHLBC and FRBC Stock	10,393	7,918
Loans held for sale	1,641	4,918
Loans, net	1,577,726	1,462,651
Accrued interest receivable	8,669	5,928
Financial liabilities:
Noninterest bearing deposits	556,874	513,688
Interest bearing deposits	1,332,241	1,353,097
Securities sold under repurchase agreements	26,853	25,715
Other short-term borrowings	125,000	70,000
Junior subordinated debentures	57,627	57,591
Subordinated debenture	44,033	43,998
Interest rate swap	1,439	994
Borrowing interest payable	773	202
Deposit interest payable	573	599
Total Fair Value
Financial assets:
Cash and due from banks	32,772	33,805
Interest bearing deposits with financial institutions	14,730	13,529
Securities available-for-sale	533,484	531,838
FHLBC and FRBC Stock	10,393	7,918
Loans held for sale	1,641	4,918
Loans, net	1,568,457	1,453,429
Accrued interest receivable	8,669	5,928
Financial liabilities:
Noninterest bearing deposits	556,874	513,688
Interest bearing deposits	1,329,668	1,351,000
Securities sold under repurchase agreements	26,853	25,715
Other short-term borrowings	125,000	70,000
Junior subordinated debentures	59,524	55,163
Subordinated debenture	46,958	43,998
Interest rate swap	1,439	994
Borrowing interest payable	773	202
Deposit interest payable	573	599
Level 1
Financial assets:
Cash and due from banks	32,772	33,805
Interest bearing deposits with financial institutions	14,730	13,529
Securities available-for-sale	3,990
Financial liabilities:
Noninterest bearing deposits	556,874	513,688
Junior subordinated debentures	33,320	32,404
Level 2
Financial assets:
Securities available-for-sale	514,642	506,493
FHLBC and FRBC Stock	10,393	7,918
Loans held for sale	1,641	4,918
Accrued interest receivable	8,669	5,928
Financial liabilities:
Interest bearing deposits	1,329,668	1,351,000
Securities sold under repurchase agreements	26,853	25,715
Other short-term borrowings	125,000	70,000
Junior subordinated debentures	26,204	22,759
Subordinated debenture	46,958	43,998
Interest rate swap	1,439	994
Borrowing interest payable	773	202
Deposit interest payable	573	599
Level 3
Financial assets:
Securities available-for-sale	14,852	25,345
Loans, net	$ 1,568,457	$ 1,453,429

Financial Instruments with Of70

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Interest Rate Derivatives (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017USD ($)item	Dec. 31, 2016USD ($)
Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Asset Derivatives, Fair Value	$ 417	$ 960
Liability Derivatives, Fair Value	128	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	(1,439)	(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	1
Weighted average maturity	6 years 8 months 12 days	7 years 3 months 18 days
Notional or Contractual Amount	$ 349,367	$ 85,807
Asset Derivatives, Fair Value	128	673
Liability Derivatives, Fair Value	128	673
Commitments | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Notional or Contractual Amount	28,591	31,980
Asset Derivatives, Fair Value	$ 289	$ 287

Financial Instruments with Of71

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Company's contractual commitments due to letters of credit
Total letters of credit	$ 12,447	$ 13,511
Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	243	315
Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,204	13,196
Borrower
Company's contractual commitments due to letters of credit
Total letters of credit	12,025	12,891
Borrower | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	243	220
Borrower | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	11,782	12,671
Borrower | Financial standby
Company's contractual commitments due to letters of credit
Total letters of credit	3,925	4,184
Borrower | Financial standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	177	137
Borrower | Financial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	3,748	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	7,978	8,581
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	7,912	8,498
Nonborrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	422	620
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	$ 525