Old Second Bancorp (OSBC) 10-Q 7 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 03, 2018
Document and Entity Information
Entity Registrant Name	OLD SECOND BANCORP INC
Entity Central Index Key	357,173
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
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		29,747,078
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets
Cash and due from banks	$ 34,161	$ 37,444
Interest bearing deposits with financial institutions	31,147	18,389
Cash and cash equivalents	65,308	55,833
Securities available-for-sale, at fair value	543,644	541,439
Federal Home Loan Bank and Federal Reserve Bank stock	9,093	10,168
Loans held-for-sale	5,206	4,067
Loans	1,849,162	1,617,622
Less: allowance for loan losses	19,321	17,461
Net loans	1,829,841	1,600,161
Premises and equipment, net	42,532	37,628
Other real estate owned	8,912	8,371
Mortgage servicing rights, net	7,812	6,944
Goodwill and core deposit intangible	22,074	8,922
Bank-owned life insurance (BOLI)	61,159	61,764
Deferred tax assets, net	27,812	25,356
Other assets	26,355	22,776
Total assets	2,649,748	2,383,429
Deposits:
Noninterest bearing demand	620,807	572,404
Interest bearing:
Savings, NOW, and money market	1,058,295	967,750
Time	482,749	382,771
Total deposits	2,161,851	1,922,925
Securities sold under repurchase agreements	54,038	29,918
Other short-term borrowings	76,625	115,000
Junior subordinated debentures	57,662	57,639
Senior notes	44,108	44,058
Notes payable and other borrowings	23,496
Other liabilities	22,154	13,539
Total liabilities	2,439,934	2,183,079
Stockholders' Equity
Common stock	34,717	34,626
Additional paid-in capital	118,082	117,742
Retained earnings	157,796	142,959
Accumulated other comprehensive loss	(4,487)	1,479
Treasury stock	(96,294)	(96,456)
Total stockholders' equity	209,814	200,350
Total liabilities and stockholders' equity	$ 2,649,748	$ 2,383,429

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
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	34,716,589	34,625,734
Common stock, Shares outstanding	29,747,078	29,627,086
Treasury stock, Shares	4,969,511	4,998,648

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Interest and Dividend Income
Loans, including fees	$ 22,512	$ 17,385	$ 41,248	$ 33,994
Loans held-for-sale	35	37	55	61
Securities:
Taxable	2,392	2,607	4,562	5,570
Tax exempt	2,114	1,648	4,175	2,560
Dividends from FHLBC and FRBC stock	111	92	217	177
Interest bearing deposits with financial institutions	97	31	146	54
Total interest and dividend income	27,261	21,800	50,403	42,416
Interest Expense
Savings, NOW, and money market deposits	501	233	845	456
Time deposits	1,444	1,025	2,619	2,004
Securities sold under repurchase agreements	104	4	183	6
Other short-term borrowings	276	146	605	252
Junior subordinated debentures	927	1,059	1,854	2,143
Senior notes	672	672	1,344	1,345
Notes payable and other borrowings	95		95
Total interest expense	4,019	3,139	7,545	6,206
Net interest and dividend income	23,242	18,661	42,858	36,210
Release for loan and lease losses	1,450	750	728	750
Net interest and dividend income after (release) provisions for loan losses	21,792	17,911	42,130	35,460
Noninterest Income
Trust income	1,645	1,638	3,140	3,096
Service charges on deposits	1,769	1,615	3,361	3,233
Secondary mortgage fees	195	223	357	399
Mortgage servicing rights mark to market loss	(105)	(429)	200	(562)
Mortgage servicing income	627	444	1,079	879
Net gain on sales of mortgage loans	1,240	1,473	2,157	2,620
Securities gains (losses), net	312	(131)	347	(267)
Increase in cash surrender value of BOLI	351	350	599	709
Death benefit realized on bank-owned life insurance			1,026
Debit card interchange income	1,132	1,081	2,144	2,056
Losses on disposal and transfer of fixed assets, net		12		10
Other income	1,366	1,041	2,627	2,172
Total noninterest income	8,532	7,317	17,037	14,345
Noninterest Expense
Salaries and employee benefits	12,355	10,545	22,562	21,118
Occupancy, furniture and equipment	1,652	1,462	3,210	3,028
Computer and data processing	2,741	1,112	4,085	2,202
FDIC insurance	165	165	321	313
General bank insurance	299	264	550	534
Amortization of core deposit intangible	97	25	118	50
Advertising expense	492	452	833	838
Debit card interchange expense	301	399	582	748
Legal fees	286	184	445	288
Other real estate expense, net	429	539	602	1,248
Other expense	3,469	2,839	6,332	5,673
Total noninterest expense	22,286	17,986	39,640	36,040
Income before income taxes	8,038	7,242	19,527	13,765
Provision for income taxes	1,777	2,096	3,777	4,192
Net income available to common stockholders	$ 6,261	$ 5,146	$ 15,750	$ 9,573
Basic earnings per share (in dollars per share)	$ 0.21	$ 0.17	$ 0.53	$ 0.32
Diluted earnings per share (in dollars per share)	$ 0.21	$ 0.17	$ 0.52	$ 0.32

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Consolidated Statements of Comprehensive Income
Net income	$ 6,261	$ 5,146	$ 15,750	$ 9,573
Unrealized holding (losses) gains on available-for-sale securities arising during the period	(1,391)	6,596	(10,199)	10,827
Related tax benefit (expense)	392	(2,650)	2,876	(4,325)
Holding (losses) gains after tax on available-for-sale securities	(999)	3,946	(7,323)	6,502
Less: Reclassification adjustment for the net gains (losses) realized during the period
Net realized gains (losses)	312	(131)	347	(267)
Income tax (expense) benefit on net realized gains (losses)	(88)	52	(98)	106
Net realized gains (losses) after tax	(224)	79	(249)	161
Other comprehensive (loss) income on available-for-sale securities	(1,223)	4,025	(7,572)	6,663
Changes in fair value of derivatives used for cashflow hedges	515	(613)	1,794	(464)
Related tax benefit	(145)	245	(507)	184
Other comprehensive income on cashflow hedges	370	(368)	1,287	(280)
Total other comprehensive (loss) income	(853)	3,657	(6,285)	6,383
Total comprehensive income	$ 5,408	$ 8,803	$ 9,465	$ 15,956

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net income	$ 5,146	$ 15,750	$ 9,573
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of leasehold improvement		1,142	1,193
Change in fair value of mortgage servicing rights	429	(200)	562
Release for loan and lease losses	750	728	750
Provision for deferred tax expense		3,468	4,052
Originations of loans held-for-sale		(72,820)	(75,079)
Proceeds from sales of loans held-for-sale		73,187	76,649
Net gain on sales of mortgage loans	(1,473)	(2,157)	(2,620)
Net premium amortization/discount (accretion) of purchase accounting adjustments on loans		(776)	(680)
Change in current income taxes receivable		197	(89)
Increase in cash surrender value of BOLI	(350)	(599)	(709)
Change in accrued interest receivable and other assets		(1,075)	1,665
Change in accrued interest payable and other liabilities		8,195	16,894
Net premium amortization/discount (accretion) on securities		1,388	773
Securities (gains) losses, net	131	(347)	267
Amortization of core deposit	25	118	50
Amortization of junior subordinated debentures issuance costs		23	24
Amortization of senior notes issuance costs		50	52
Stock based compensation		1,098	625
Net gains on sale of other real estate owned	(104)	(104)	(178)
Provision for other real estate owned valuation losses	392	366	710
Net losses on disposal and transfer of fixed assets			(11)
Loss on transfer of premises to other real estate owned			1
Net cash provided by operating activities		27,632	34,474
Cash flows from investing activities
Proceeds from maturities and calls including pay down of securities available-for-sale		20,136	78,564
Proceeds from sales of securities available-for-sale	36,468	92,746	100,856
Purchases of securities available-for-sale		(54,550)	(205,755)
Net disbursements/proceeds from sales (purchases) of FHLBC stock		2,624	(675)
Net change in loans		(4,418)	(64,755)
Proceeds from clains on BOLI, net of premiums paid		1,204
Improvements in other real estate owned		(59)
Proceeds from sales of other real estate owned, net of participation purchase		2,068	3,280
Proceeds from disposition of premises and equipment			13
Net purchases of premises and equipment		(710)	(375)
Cash paid for acquisition, net of cash and cash equivalent retained		(35,711)
Net cash provided by (used in) investing activities		23,330	(88,847)
Cash flows from financing activities
Net change in deposits		(9,587)	43,360
Net change in securities sold under repurchase agreements		18,497	10,646
Net change in other short-term borrowings		(49,298)	5,000
Payment of senior note issuance costs			(42)
Dividends paid common stock		(594)	(592)
Purchase of treasury stock		(505)	(236)
Net cash (used in) provided by financing activities		(41,487)	58,136
Net change in cash and cash equivalents		9,475	3,763
Cash and cash equivalents at beginning of period		55,833	47,334
Cash and cash equivalents at end of period	51,097	65,308	$ 51,097
Supplemental cash flow information
Income taxes paid	230	100
Interest paid for deposits	2,448	3,295
Interest paid for borrowings	3,787	3,960
Non-cash transfer of loans to other real estate owned	3,525	$ 2,380
Non-cash transfer of premises to other real estate owned	$ 95

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, 2016	$ 34,534	$ 116,653	$ 129,005	$ (8,762)	$ (96,220)	$ 175,210
Increase (Decrease) in Stockholders' Equity
Net income			9,573			9,573
Other comprehensive income, net of tax				6,383		6,383
Dividends declared and paid			(592)			(592)
Vesting of restricted stock	92	(92)
Stock based compensation		625				625
Purchase of treasury stock					(236)	(236)
Balance at Jun. 30, 2017	34,626	117,186	137,986	(2,379)	(96,456)	190,963
Balance at Dec. 31, 2017	34,626	117,742	142,959	1,479	(96,456)	200,350
Increase (Decrease) in Stockholders' Equity
Net income			15,750			15,750
Other comprehensive income, net of tax				(6,285)		(6,285)
Dividends declared and paid			(594)			(594)
Vesting of restricted stock	91	(758)			667
Cumulative effect of change in accounting principle			(319)	319
Stock based compensation		1,098				1,098
Purchase of treasury stock					(505)	(505)
Balance at Jun. 30, 2018	$ 34,717	$ 118,082	$ 157,796	$ (4,487)	$ (96,294)	$ 209,814

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 1 – Summary of Significant Accounting Policies The accounting policies followed in the preparation of the interim consolidated financial statements are consistent with those used in the preparation of the annual financial information. The interim consolidated financial statements reflect all normal and recurring adjustments that are necessary, in the opinion of management, for a fair statement of results for the interim period presented. Results for the period ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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, 2017. 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. 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, 2017. 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. In addition to the significant accounting policies presented in our Form 10-K, as noted above, as a result of our acquisition of Greater Chicago Financial Corp. (“(GCFC”), and its wholly-owned subsidiary, ABC Bank, that closed in the second quarter of 2018, the Company has implemented accounting policies regarding purchased loans. Loans purchased as a result of a business combination are recorded at estimated fair value on the acquisition date, with no carryover of the related allowance for loan and lease losses recorded by the acquiree at the time of purchase. These loans are segregated into two classifications upon purchase: 1) purchased non-credit impaired (“non-PCI”) loans, accounted for in accordance with FASB ASC Subtopic 310-20 “ Nonrefundable Fees and Costs ” (“ASC 310-20”), which have a discount attributable in part to credit quality. Premiums and discounts created when ASC 310-20 loans are recorded at their fair values at acquisition are amortized over the remaining terms of the loans as an adjustment to the related loan’s yield; and 2) purchased credit impaired (“PCI”) loans, accounted for under FASB ASC Subtopic 310-30, “ Loans and Debt Securities Acquired with Deteriorated Credit Quality ” (“ASC 310-30”) as they display signs of credit deterioration. Interest income, through accretion of the difference between the carrying value of the loans and the expected cash flows, is recognized on the acquired loans accounted for under ASC 310-30. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, ” which deferred the effective date of ASU 2014-09 for an additional year. ASU 2015-14 was effective for annual reporting periods beginning after December 15, 2017. The amendments could 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 was 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 performed an analysis of the impact of adoption of this ASU, reviewing revenue recorded from service charges on deposit accounts, asset management fees, gains (losses) on other real estate owned, and debit card interchange fees. Certain revenue received, such as service charges on deposit accounts and interchange fees, is recorded immediately or as the service is performed. Asset management fees recorded by the Company take the form of wealth management income and brokerage income, and both types of fees are recorded after services are rendered, with no contractual requirement of refund to a customer based on non-achievement of fund performance objectives. Finally, the methodology used to record revenue from gains (losses) due to the sale of other real estate owned is not anticipated to change, as the Company currently records income or expense only upon consummation of the sale, and any revenue recorded stemming from seller financed transactions is reviewed for deferral, as appropriate. The Company adopted ASU 2014-09 and related issuances on January 1, 2018, with no cumulative effect adjustment to opening retained earnings required upon implementation of this standard. In January 2016, the FASB issued ASU No. 2016-01 “ Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities .” The objective of the issuance is to provide users of financial statements with more decision–useful information, by making targeted improvements to GAAP. These targeted improvements included revisions to the methodology of accounting for equity investments, eliminating certain disclosures on fair value assumptions for financial instruments measured at amortized cost, and requiring public business entities to use the exit price notion, as defined in ASC 820, for the measurement of the fair value of financial instruments. This standard was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this standard as of January 1, 2018. Adoption of this standard resulted in the Company’s use of an exit price rather than an entrance price to determine the fair value of loans and deposits not already measured at fair value on a non-recurring basis in the consolidated balance sheet disclosures; see Note 14–Fair Value of Financial Instruments for further information regarding the valuation processes. 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 in the process of identifying all lease arrangements, methodology of tracking, and practical expedients that may be applied, such as the cumulative effect adjustment in equity upon adoption as of January 1, 2019, compared to a retroactive adoption. We will continue to assess the impact of ASU 2016-02 on our accounting and disclosures. 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 historical data by loan pools and collateral classifications, and completing model option evaluations 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 will continue to decrease future quarterly net interest income over the call period until the premium 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 2017 earnings. Net interest income, net income and diluted earnings per share (“EPS”) were previously reported as $22.1 million, $5.5 million, and $0.18 for the quarter ended June 30, 2017, and $42.9 million, $10.0 million, and $0.33 for the six months ended June 30, 2017. The effect of the adoption of ASU 2017-08 resulted in the currently reported totals of net interest income, net income and diluted EPS of $21.8 million, $5.1 million, and $0.17 for the quarter ended June 30, 2017, and $42.4 million, $9.6 million, and $0.32 for the six months ended June 30, 2017. In August 2017, the FASB issued ASU No. 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 adopted ASU 2017-12 on January 1, 2018, on a modified retrospective basis. FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. As the Company does not currently have any derivative financial instruments subject to master netting agreements, there was no impact to the balance sheet. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income .” This ASU was issued in response to the enactment of tax bill H.R.1 “Tax Cuts and Jobs Act”, which resulted in “stranding” the tax effects of items within accumulated other comprehensive income related to the adjustment of deferred taxes due to the reduction of the federal corporate income tax rate. The amendments proposed allow the reclassification of these stranded tax effects to retained earnings, and were effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate tax rate is recognized. The Company adopted ASU 2018-02 as of January 1, 2018, and a reclassification of $319,000, net, was recorded, which increased accumulated other comprehensive income and reduced retained earnings with the adoption of the accounting standard. Subsequent Events On July 17, 2018, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on August 6, 2018, to stockholders of record as of July 27, 2018; dividends of $297,000 were paid to stockholders on August 6, 2018.

Acquisitions

Acquisitions	6 Months Ended
	Jun. 30, 2018
Acquisitions
Acquisitions	Note 2 – Acquisitions On April 20, 2018, the Company acquired Greater Chicago Financial Corp. (“GCFC”), and its wholly owned subsidiary, ABC Bank, which operates four branches in the Chicago metro area. In addition to the acquisition price of $41.1 million, the Company retired the convertible and nonconvertible debentures held by GCFC upon acquisition, which totaled $6.6 million, including interest due. The purchase and the debentures’ retirement were funded with the Company’s cash on hand, and all GCFC common stock was retired and cancelled simultaneous with the close of the transaction. The Company acquired $227.6 million of loans, net of purchase accounting adjustments, and $248.5 million of deposits, net of purchase accounting adjustments for time deposits. Purchase accounting adjustments recorded in the second quarter of 2018 include a loan valuation mark of $11.2 million, a core deposit intangible of $3.1 million, a fixed asset valuation adjustment of $1.5 million, and goodwill of $9.9 million. In addition, a deferred tax asset of $3.5 million was recorded as of the date of acquisition based on analysis of the fair value of assets acquired, less liabilities assumed. None of the $9.9 million recorded as goodwill is expected to be deductible for tax purposes. Acquisition related costs incurred by the Company for the six months ended June 30, 2018, totaled $3.4 million, pretax, and included $1.2 million of salaries and employee benefits related expenses, and $1.8 million of data processing, computer and ATM related conversion costs. The assets and liabilities associated with the acquisition of GCFC were recorded in the Consolidated Balance Sheets at estimated fair value as of the acquisition date. In many cases the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change, as noted below. The following allocation is based on the information that was available to make preliminary estimates of the fair value and may change as additional information becomes available and additional analyses are completed. While the Company believes that information provided a reasonable basis for estimating the fair values, it expects that it could obtain additional information and evidence during the measurement period that may result in changes to the estimated fair value amounts. This measurement period ends on the earlier of one year after the acquisition date or the date we receive the information about the facts and circumstances that existed at the acquisition date. Subsequent adjustments are, and if necessary, will be prospectively reflected in future filings, and may impact loans, other assets, notes payable and other borrowings, deferred tax assets, net, and goodwill. The below table summarizes the assets acquired, less the liabilities assumed, related to the GCFC/ABC Bank acquisition. All amounts are listed at their estimated fair values as of date of acquisition, and have been accounted for under the acquisition method of accounting. GCFC/ABC Bank Acquisition Summary As of Date of Acquisition April 20, 2018 Assets Cash and due from banks $ 6,669 Interest bearing deposits with financial institutions 500 Securities available-for-sale, at fair value 72,091 Federal funds sold 4,300 FHLBC stock 1,549 Loans 227,594 Premises and equipment 5,339 Other real estate owned 432 Goodwill and core deposit intangible 12,957 Deferred tax assets, net 3,456 Other assets 2,083 Total assets $ 336,970 Liabilities Noninterest bearing demand $ 58,005 Savings, NOW and money market 91,494 Time 98,999 Total deposits 248,498 Securities sold under repurchase agreements 5,624 Other short-term borrowings 10,875 Notes payable and other borrowings 23,544 Other liabilities 1,249 Total liabilities 289,790 Cash consideration paid 47,180 Total Liabilities Assumed and Cash Consideration Paid for Acquisition $ 336,970 Loans acquired in the GCFC acquisition were initially recorded at fair value with no separate allowance for loan losses. The Company reviewed the loans at acquisition to determine which should be considered PCI loans, defining impaired loans as those that were either not accruing interest or exhibited credit risk factors consistent with nonperforming loans at the acquisition date, or non-PCI loans, as addressed in the Company’s significant accounting policies. The following table represents the acquired loans as of date of acquisition and as of June 30, 2018: April 20, 2018 June 30, 2018 ABC Bank Acquired Loans PCI Non-PCI PCI Non-PCI Fair Value $ 11,360 $ 216,306 $ 11,214 $ 208,929 Contractually required principal and interest payment 19,447 219,488 18,989 211,341 Best estimate of contractual cash flows not expected to be collected 6,537 2,511 6,402 2,119 Best estimate of contractual cash flows expected to be collected 12,910 216,977 12,587 209,222

Securities

Securities	6 Months Ended
	Jun. 30, 2018
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 $4.3 million at June 30, 2018, and $5.4 million at December 31, 2017. FRBC stock was recorded at $4.8 million at both June 30, 2018, and December 31, 2017. The following table summarizes the amortized cost and fair value of the securities portfolio at June 30, 2018, and December 31, 2017, and the corresponding amounts of gross unrealized gains and losses: Gross Gross Amortized Unrealized Unrealized Fair June 30, 2018 Cost Gains Losses Value Securities available-for-sale U.S. Treasuries $ 4,004 $ - $ (128) $ 3,876 U.S. government agencies 12,369 - (153) 12,216 U.S. government agencies mortgage-backed 14,011 - (604) 13,407 States and political subdivisions 279,007 1,640 (4,535) 276,112 Corporate bonds 685 21 (6) 700 Collateralized mortgage obligations 63,778 60 (2,406) 61,432 Asset-backed securities 110,053 1,011 (1,801) 109,263 Collateralized loan obligations 66,489 223 (74) 66,638 Total securities available-for-sale $ 550,396 $ 2,955 $ (9,707) $ 543,644 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2017 Cost Gains Losses Value Securities available-for-sale U.S. Treasury $ 4,002 $ - $ (55) $ 3,947 U.S. government agencies 13,062 8 (9) 13,061 U.S. government agencies mortgage-backed 12,372 7 (165) 12,214 States and political subdivisions 272,240 7,116 (1,264) 278,092 Corporate bonds 823 21 (11) 833 Collateralized mortgage obligations 66,892 202 (1,155) 65,939 Asset-backed securities 113,983 862 (1,913) 112,932 Collateralized loan obligations 54,271 251 (101) 54,421 Total securities available-for-sale $ 537,645 $ 8,467 $ (4,673) $ 541,439 The fair value, amortized cost and weighted average yield of debt securities at June 30, 2018, 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 $ 10,550 2.10 % $ 10,540 Due after one year through five years 4,689 2.20 4,576 Due after five years through ten years 5,343 3.27 5,413 Due after ten years 275,483 2.98 272,375 296,065 2.94 292,904 Mortgage-backed and collateralized mortgage obligations 77,789 3.11 74,839 Asset-backed securities 110,053 3.23 109,263 Collateralized loan obligations 66,489 4.34 66,638 Total securities available-for-sale $ 550,396 3.19 % $ 543,644 At June 30, 2018, the Company’s investments included $92.5 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 DOE guarantee, total added credit enhancement in the form of overcollateralization and/or subordination amounted to $10.9 million, or 11.44%, 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: June 30, 2018 Amortized Fair Issuer Cost Value GCO Education Loan Funding Corp $ 27,685 $ 26,754 Towd Point Mortgage Trust 28,966 28,080 Student Loan Marketing Association 25,780 26,176 Securities with unrealized losses at June 30, 2018, and December 31, 2017, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands except for number of securities): Less than 12 months 12 months or more June 30, 2018 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 $ 128 $ 3,876 - $ - $ - 1 $ 128 $ 3,876 U.S. government agencies 4 153 12,216 - - - 4 153 12,216 U.S. government agencies mortgage-backed 7 356 8,968 5 248 4,439 12 604 13,407 States and political subdivisions 43 3,264 141,455 2 1,271 3,849 45 4,535 145,304 Corporate bonds - - - 1 6 198 1 6 198 Collateralized mortgage obligations 3 399 20,353 9 2,007 37,782 12 2,406 58,135 Asset-backed securities 3 65 8,451 6 1,736 56,539 9 1,801 64,990 Collateralized loan obligations 3 60 17,364 1 14 7,986 4 74 25,350 Total securities available-for-sale 64 $ 4,425 $ 212,683 24 $ 5,282 $ 110,793 88 $ 9,707 $ 323,476 Less than 12 months 12 months or more December 31, 2017 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. Treasuries 1 $ 55 $ 3,947 - $ - $ - 1 $ 55 $ 3,947 U.S. government agencies 2 9 6,550 - - - 2 9 6,550 U.S. government agencies mortgage-backed 4 24 5,501 5 141 4,843 9 165 10,344 States and political subdivisions 13 1,237 45,985 1 27 1,512 14 1,264 47,497 Corporate bonds - - - 1 11 332 1 11 332 Collateralized mortgage obligations 3 31 11,534 8 1,124 40,219 11 1,155 51,753 Asset-backed securities - - - 7 1,913 61,745 7 1,913 61,745 Collateralized loan obligations 3 101 29,313 - - - 3 101 29,313 Total securities available-for-sale 26 $ 1,457 $ 102,830 22 $ 3,216 $ 108,651 48 $ 4,673 $ 211,481 Recognition of other-than-temporary impairment was not necessary as of the three and six months ended June 30, 2018. 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 three and six months ended June 30, 2018 and 2017. Three Months Ended Six Months Ended June 30, June 30, Securities available-for-sale 2018 2017 2018 2017 Proceeds from sales of securities $ 90,224 $ 36,468 $ 92,746 $ 100,856 Gross realized gains on securities 312 71 347 437 Gross realized losses on securities - (202) - (704) Securities realized gains (losses), net $ 312 $ (131) $ 347 $ (267) Income tax (expense) benefit on net realized gains (losses) (88) 52 (98) 106 The majority of the net realized losses in the prior year were incurred as the portfolio was repositioned during 2017 to invest in higher yielding tax exempt municipal securities. Securities valued at $311.4 million as of June 30, 2018, an increase from $301.0 million at year-end 2017, were pledged to secure deposits and borrowings, and for other purposes.

Loans

Loans	6 Months Ended
	Jun. 30, 2018
Loans
Loans	Note 4 – Loans Major classifications of loans were as follows: June 30, 2018 December 31, 2017 Commercial $ 299,536 $ 272,851 Leases 66,687 68,325 Real estate - commercial 808,264 750,991 Real estate - construction 115,486 85,162 Real estate - residential 404,908 313,397 Home equity lines of credit "HELOC" 127,986 112,833 Other 1 13,969 13,384 Total loans, excluding deferred loan costs and PCI loans 1,836,836 1,616,942 Net deferred loan costs 1,112 680 Total loans, excluding PCI loans 1,837,948 1,617,622 PCI loans, net of purchase accounting adjustments 11,214 - Total loans $ 1,849,162 $ 1,617,622 1 The “Other” class includes consumer and 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 78.8% and 78.0% of the portfolio at June 30, 2018, and December 31, 2017, respectively. The PCI loans, net of purchase accounting adjustments, reflect purchase credit impaired loans as of June 30, 2018, related to the Company’s second quarter acquisition of ABC Bank. Aged analysis of past due loans by class of loans was as follows: Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and June 30, 2018 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 210 $ - $ - $ 210 $ 299,326 $ - $ 299,536 $ - Leases - - - - 66,687 - 66,687 - Real estate - commercial Owner occupied general purpose 903 - 450 1,353 172,922 823 175,098 477 Owner occupied special purpose 1,981 - - 1,981 194,604 426 197,011 - Non-owner occupied general purpose 3,282 - 174 3,456 279,599 39 283,094 178 Non-owner occupied special purpose - - - - 87,704 3,099 90,803 - Retail properties - - - - 47,582 - 47,582 - Farm - - - - 14,676 - 14,676 - Real estate - construction Homebuilder - - - - 7,649 - 7,649 - Land - - - - 9,168 - 9,168 - Commercial speculative - - - - 39,730 - 39,730 - All other 59 - 442 501 58,245 193 58,939 475 Real estate - residential Investor 466 108 38 612 72,896 371 73,879 40 Multifamily 232 - - 232 191,883 - 192,115 - Owner occupied 710 208 - 918 134,265 3,731 138,914 - HELOC 599 172 49 820 126,443 723 127,986 50 Other 1 39 - - 39 15,026 16 15,081 - Total, excluding PCI loans $ 8,481 $ 488 $ 1,153 $ 10,122 $ 1,818,405 $ 9,421 $ 1,837,948 $ 1,220 PCI loans, net of purchase accounting adjustments 387 - - 387 7,850 2,977 11,214 Total $ 8,868 $ 488 $ 1,153 $ 10,509 $ 1,826,255 $ 12,398 $ 1,849,162 $ 1,220 Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 995 $ 275 $ - $ 1,270 $ 271,581 $ - $ 272,851 $ - Leases - - - - 68,147 178 68,325 - Real estate - commercial Owner occupied general purpose 1,136 - - 1,136 144,267 455 145,858 - Owner occupied special purpose 226 - - 226 170,546 342 171,114 - Non-owner occupied general purpose - 593 - 593 273,203 1,163 274,959 - Non-owner occupied special purpose - - 248 248 92,923 - 93,171 254 Retail properties - - - - 49,538 1,081 50,619 - Farm - - - - 15,270 - 15,270 - Real estate - construction Homebuilder 129 - - 129 2,221 - 2,350 - Land 1,124 - - 1,124 1,319 - 2,443 - Commercial speculative - - - - 32,028 - 32,028 - All other - - - - 48,140 201 48,341 - Real estate - residential Investor - - - - 55,248 372 55,620 - Multifamily - - - - 125,049 4,723 129,772 - Owner occupied 74 - - 74 123,257 4,674 128,005 - HELOC 491 278 - 769 110,872 1,192 112,833 - Other 1 37 - - 37 14,019 7 14,063 - Total $ 4,212 $ 1,146 $ 248 $ 5,606 $ 1,597,628 $ 14,388 $ 1,617,622 $ 254 1 The “Other” class includes consumer, 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 Bank will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Credits that are not covered by the definitions above are pass credits, which are not considered to be adversely rated. Credit Quality Indicators by class of loans were as follows: June 30, 2018 Special Pass Mention Substandard 2 Doubtful Total Commercial $ 298,512 $ 631 $ 393 $ - $ 299,536 Leases 66,148 - 539 - 66,687 Real estate - commercial Owner occupied general purpose 166,962 4,915 3,221 - 175,098 Owner occupied special purpose 195,009 254 1,748 - 197,011 Non-owner occupied general purpose 275,728 4,899 2,467 - 283,094 Non-owner occupied special purpose 87,704 - 3,099 - 90,803 Retail Properties 45,755 - 1,827 - 47,582 Farm 13,428 - 1,248 - 14,676 Real estate - construction Homebuilder 7,649 - - - 7,649 Land 9,168 - - - 9,168 Commercial speculative 39,730 - - - 39,730 All other 56,443 2,130 366 - 58,939 Real estate - residential Investor 72,759 91 1,029 - 73,879 Multifamily 188,813 - 3,302 - 192,115 Owner occupied 133,485 1 5,428 - 138,914 HELOC 126,353 - 1,633 - 127,986 Other 1 15,063 - 18 - 15,081 Total, excluding PCI loans $ 1,798,709 $ 12,921 $ 26,318 $ - $ 1,837,948 PCI loans, net of purchase accounting adjustments - - 11,214 - 11,214 Total $ 1,798,709 $ 12,921 $ 37,532 $ - $ 1,849,162 December 31, 2017 Special Pass Mention Substandard 2 Doubtful Total Commercial $ 270,889 $ 1,962 $ - $ - $ 272,851 Leases 67,500 - 825 - 68,325 Real estate - commercial Owner occupied general purpose 142,843 1,927 1,088 - 145,858 Owner occupied special purpose 169,621 1,152 341 - 171,114 Non-owner occupied general purpose 271,731 2,065 1,163 - 274,959 Non-owner occupied special purpose 89,582 - 3,589 - 93,171 Retail Properties 48,321 1,217 1,081 - 50,619 Farm 11,755 1,029 2,486 - 15,270 Real estate - construction Homebuilder 2,350 - - - 2,350 Land 2,443 - - - 2,443 Commercial speculative 32,028 - - - 32,028 All other 46,913 1,052 376 - 48,341 Real estate - residential Investor 55,172 - 448 - 55,620 Multifamily 125,049 - 4,723 - 129,772 Owner occupied 122,178 561 5,266 - 128,005 HELOC 110,934 - 1,899 - 112,833 Other 1 14,043 - 20 - 14,063 Total $ 1,583,352 $ 10,965 $ 23,305 $ - $ 1,617,622 1 The “Other” class includes consumer, overdrafts and net deferred costs. 2 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans. The Company had $942,000 and $1.3 million in residential real estate loans in the process of foreclosure as of June 30, 2018, and December 31, 2017, respectively. The following tables set forth the recorded investments, unpaid principal balance and related allowance, excluding purchased credit-impaired loans, by class of loans for the June 30, 2018, periods: Six Months Ended As of June 30, 2018 June 30, 2018 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ - $ - $ - $ - $ - Leases - - - 89 - Commercial real estate Owner occupied general purpose 911 985 - 683 3 Owner occupied special purpose 426 546 - 384 - Non-owner occupied general purpose 39 81 - 601 - Non-owner occupied special purpose - - - - - Retail properties - - - 541 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other 193 226 - 197 - Residential Investor 371 468 - 371 - Multifamily - - - 2,362 - Owner occupied 4,244 5,769 - 4,726 18 HELOC 741 860 - 933 1 Other 1 16 16 - 11 - Total impaired loans with no recorded allowance 6,941 8,951 - 10,898 22 With an allowance recorded Commercial - - - - - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - - - Non-owner occupied special purpose 3,099 3,575 419 1,550 - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor 815 815 10 822 22 Multifamily - - - - - Owner occupied 3,646 3,646 45 3,544 73 HELOC 1,321 1,321 24 1,153 24 Other 1 3 3 - 2 - Total impaired loans with a recorded allowance 8,884 9,360 498 7,071 119 Total impaired loans $ 15,825 $ 18,311 $ 498 $ 17,969 $ 141 1 The “Other” class includes consumer, overdrafts and net deferred costs. Impaired loans by class of loans as of December 31, 2017, and for the six months ended June 30, 2017, were as follows: Six Months Ended As of December 31, 2017 June 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ - $ - $ - $ 128 $ - Leases 178 213 - 293 - Commercial real estate Owner occupied general purpose 455 495 - 1,170 - Owner occupied special purpose 342 498 - 376 - Non-owner occupied general purpose 1,163 1,538 - 1,443 1 Non-owner occupied special purpose - - - 507 - Retail properties 1,081 1,177 - 1,161 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - 72 - All other 201 229 - 180 - Residential Investor 372 676 - 1,708 20 Multifamily 4,723 4,965 - 2,412 - Owner occupied 5,208 6,680 - 9,016 65 HELOC 1,125 1,313 - 2,227 15 Other 1 7 8 - 105 - Total impaired loans with no recorded allowance 14,855 17,792 - 20,798 101 With an allowance recorded Commercial - - - - - Leases - - - 120 - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor 829 829 10 - - Multifamily - - - - - Owner occupied 3,443 3,443 43 402 - HELOC 985 985 91 - - Other 1 - - - - - Total impaired loans with a recorded allowance 5,257 5,257 144 645 - Total impaired loans $ 20,112 $ 23,049 $ 144 $ 21,443 $ 101 1 The “Other” class includes consumer, overdrafts and net deferred costs. 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 and lease 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 and lease 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 and lease losses also includes an allowance based on a loss migration analysis for each loan category on loans and leases 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 Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 # 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 Owner occupied special purpose Other 1 1 $ 110 $ 56 1 $ 110 $ 56 Real estate - residential Owner occupied HAMP 2 1 49 39 1 49 39 Other 1 HELOC Rate 3 1 24 24 Other 1 3 305 287 7 523 503 Total 5 $ 464 $ 382 10 $ 706 $ 622 TDR Modifications TDR Modifications Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings HELOC Other 1 2 $ 155 $ 147 6 $ 399 $ 388 Total 2 $ 155 $ 147 6 $ 399 $ 388 1 Other: Change of terms from bankruptcy court. 2 HAMP: Home Affordable Modification Program. 3 Rate: Refers to interest rate reduction. 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 June 30, 2018, and June 30, 2017, for loans that were restructured within the 12 month period prior to default. The following table details the accretable discount on all of the Company’s purchased loans, both non-PCI loans and PCI loans as of June 30, 2018. Accretable Discount - Non-PCI Loans Accretable Discount - PCI Loans Non-Accretable Discount - PCI Loans Total Beginning balance, April 1, 2018 $ 694 $ - $ - $ 694 Purchases 3,182 1,551 6,536 11,269 Accretion (881) (176) - (1,057) Transfer 1 - (2) (133) (135) Ending balance, June 30, 2018 $ 2,995 $ 1,373 $ 6,403 $ 10,771 1 Transfer was due to loans moved to OREO.

Allowance for Loan Losses

Allowance for Loan Losses	6 Months Ended
	Jun. 30, 2018
Allowance for Loan Losses
Allowance for Loan Losses	Note 5 – Allowance for Loan and Lease Losses Changes in the allowance for loan and lease losses by segment of loans based on method of impairment for the three and six months ended June 30, 2018, were as follows: Real Estate Real Estate Real Estate Allowance for loan and lease losses: Commercial Leases Commercial Construction Residential HELOC Other 1 Total Three months ended June 30, 2018 Beginning balance $ 2,604 $ 617 $ 9,565 $ 1,143 $ 1,854 $ 1,535 $ 870 $ 18,188 Charge-offs 15 8 504 - 5 65 102 699 Recoveries 92 - 21 - 105 91 73 382 (Release) Provision (5) 25 1,455 255 (136) (171) 27 1,450 Ending balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Six months ended June 30, 2018 Beginning balance $ 2,453 $ 692 $ 9,522 $ 923 $ 1,846 $ 1,446 $ 579 $ 17,461 Charge-offs 31 13 408 (16) (55) 92 201 674 Recoveries 109 - 388 3 1,016 138 152 1,806 Provision (Release) 145 (45) 1,035 456 (1,099) (102) 338 728 Ending balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Ending balance: Individually evaluated for impairment $ - $ - $ 419 $ - $ 55 $ 24 $ - $ 498 Ending balance: Collectively evaluated for impairment 2,676 634 10,118 1,398 1,763 1,366 868 18,823 Ending balance: Acquired and accounted for ASC 310-30 - - - - - - - - Total ending allowance balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Loans: Ending balance: Individually evaluated for Impairment $ - $ - $ 4,475 $ 193 $ 11,138 $ - $ 19 $ 15,825 Ending balance: Collectively evaluated for impairment 299,536 66,687 803,789 115,293 393,770 127,986 15,062 1,822,123 Ending balance: Acquired and accounted for ASC 310-30 2 - 4,146 1,556 5,509 - 1 11,214 Total ending loans balance $ 299,538 $ 66,687 $ 812,410 $ 117,042 $ 410,417 $ 127,986 $ 15,082 $ 1,849,162 1 The “Other” class includes consumer, overdrafts and net deferred costs. Changes in the allowance for loan and lease losses by segment of loans based on method of impairment for the three and six months ended June 30, 2017, were as follows: Allowance for loan and lease losses: Commercial Leases Commercial Construction Residential HELOC Other 1 Total Three months ended June 30, 2017 Beginning balance $ 1,672 $ 603 $ 7,831 $ 978 $ 2,438 $ 1,340 $ 879 $ 15,741 Charge-offs 6 - 4 - 946 30 80 1,066 Recoveries 5 - 46 60 110 139 51 411 Provision (Release) 479 188 234 (181) 270 64 (304) 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Six months ended June 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,178 $ 1,331 $ 451 $ 16,158 Charge-offs 7 117 278 4 977 194 180 1,757 Recoveries 7 - 81 78 153 238 128 685 Provision (Release) 521 275 (1,243) 394 518 138 147 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Ending balance: Individually evaluated for impairment $ - $ 98 $ - $ - $ - $ - $ - $ 98 Ending balance: Collectively evaluated for impairment 2,150 693 8,107 857 1,872 1,513 546 15,738 Total ending allowance balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Loans: Ending balance: Individually evaluated for impairment $ 216 $ 460 $ 3,113 $ 220 $ 14,609 $ 1,971 $ 9 $ 20,598 Ending balance: Collectively evaluated for impairment 256,544 69,678 702,990 93,441 267,509 114,081 14,806 1,519,049 Total ending loan balance $ 256,760 $ 70,138 $ 706,103 $ 93,661 $ 282,118 $ 116,052 $ 14,815 $ 1,539,647

Other Real Estate Owned

Other Real Estate Owned	6 Months Ended
	Jun. 30, 2018
Other Real Estate Owned
Other Real Estate Owned	Note 6 – Other Real Estate Owned Details related to the activity in the other real estate owned (“OREO”) portfolio, net of valuation reserve, for the periods presented are itemized in the following table: Three Months Ended Six Months Ended June 30, June 30, Other real estate owned 2018 2017 2018 2017 Balance at beginning of period $ 7,063 $ 13,481 $ 8,371 $ 11,916 Property additions 2,812 204 2,812 3,620 Property improvements - - 59 - Less: Proceeds from property disposals, net of participation purchase and of gains/losses 709 1,569 1,964 3,102 Period valuation adjustments 254 392 366 710 Balance at end of period $ 8,912 $ 11,724 $ 8,912 $ 11,724 Activity in the valuation allowance was as follows: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Balance at beginning of period $ 8,099 $ 9,659 $ 8,208 $ 9,982 Provision for unrealized losses 254 392 366 710 Reductions taken on sales (5) (1,747) (226) (2,388) Other adjustments - - - - Balance at end of period $ 8,348 $ 8,304 $ 8,348 $ 8,304 Expenses related to OREO, net of lease revenue includes: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Gain on sales, net $ (24) $ (104) $ (104) $ (178) Provision for unrealized losses 254 392 366 710 Operating expenses 213 293 369 816 Less: Lease revenue 14 42 29 100 Net OREO expense $ 429 $ 539 $ 602 $ 1,248

Deposits

Deposits	6 Months Ended
	Jun. 30, 2018
Deposits
Deposits	Note 7 – Deposits Major classifications of deposits were as follows: June 30, 2018 December 31, 2017 Noninterest bearing demand $ 620,807 $ 572,404 Savings 301,832 262,220 NOW accounts 435,514 429,448 Money market accounts 320,949 276,082 Certificates of deposit of less than $100,000 249,049 216,493 Certificates of deposit of $100,000 through $250,000 175,174 122,489 Certificates of deposit of more than $250,000 58,526 43,789 Total deposits $ 2,161,851 $ 1,922,925

Borrowings

Borrowings	6 Months Ended
	Jun. 30, 2018
Borrowings
Borrowings	Note 8 – Borrowings The following table is a summary of borrowings as of June 30, 2018, and December 31, 2017. Junior subordinated debentures are discussed in detail in Note 9: June 30, 2018 December 31, 2017 Securities sold under repurchase agreements $ 54,038 $ 29,918 Other short-term borrowings 1 76,625 115,000 Junior subordinated debentures 57,662 57,639 Senior notes 44,108 44,058 Notes payable and other borrowings 23,496 - Total borrowings $ 255,929 $ 246,615 1 Includes short-term FHLBC advances and the outstanding portion of an operating line of credit. 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 $54.0 million at June 30, 2018, and $29.9 million at December 31, 2017. The fair value of the pledged collateral was $73.9 million at June 30, 2018, and $40.0 million at December 31, 2017. At June 30, 2018, there was one customer with secured balances exceeding 10% of stockholders’ equity. The Company’s borrowings at the FHLBC require the Bank to be a member and invest in the stock of the FHLBC. Total borrowings are generally limited to the lower of 35% of total assets or 60% of the book value of certain mortgage loans. As of June 30, 2018, the Bank had $72.6 million in short-term advances outstanding under the FHLBC compared to $115.0 million outstanding as of December 31, 2017; $70.0 million of the June 30, 2018, balance was issued at 2.01%, and $2.6 million was issued at 1.40%. The additional $4.0 million in other short-term borrowings as of June 30, 2018, was the outstanding portion of a $20.0 million line of credit the Company has with a correspondent bank for short-term funding needs, paying 3.73% as of the current quarter end; advances under the line can be outstanding up to 360 days from date of issuance. The Bank also assumed $23.5 million of long-term FHLBC advances with the ABC Bank acquisition, with maturities scheduled over the next 7.75 years and paying interest at rates in the range of 1.40% to 2.83 % as of June 30, 2018. FHLBC stock held was valued at $4.3 million, and any potential FHLBC advances were collateralized by securities with a fair value of $76.7 million and loans with a principal balance of $296.3 million, which carried a FHLBC calculated combined collateral value of $295.5 million. The Company had excess collateral of $150.1 million available to secure borrowings at June 30, 2018. The Company also has $44.1 million of senior notes outstanding, net of deferred issuance costs, as of June 30, 2018 and December 31, 2017. 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. As of June 30, 2018 and December 31, 2017, unamortized debt issuance costs related to the senior notes were $892,000 and $942,000, respectively, and are included as a reduction of the balance of the senior notes on the Consolidated Balance Sheet. These deferred issuance costs will be amortized to interest expense over the ten year term of the notes and are included in the Consolidated Statements of Income.

Junior Subordinated Debentures

Junior Subordinated Debentures	6 Months Ended
	Jun. 30, 2018
Junior Subordinated Debentures.
Junior Subordinated Debentures	Note 9 – Junior Subordinated Debentures The Company completed the sale of $27.5 million of cumulative trust preferred securities by its unconsolidated subsidiary, Old Second Capital Trust I, in June 2003. An additional $4.1 million of cumulative trust preferred securities were sold in July 2003. The trust preferred securities may remain outstanding for a 30-year term but, subject to regulatory approval, can be called in whole or in part by the Company after June 30, 2008. When not in deferral, distributions on the securities are payable quarterly at an annual rate of 7.80%. The Company issued a new $32.6 million subordinated debenture to Old Second Capital Trust I in return for the aggregate net proceeds of this trust preferred offering. The interest rate and payment frequency on the debenture are equivalent to the cash distribution basis on the trust preferred securities. The Company issued an additional $25.0 million of cumulative trust preferred securities through a private placement completed by an additional, unconsolidated subsidiary, Old Second Capital Trust II, in April 2007. These trust preferred securities also mature in 30 years, but subject to the aforementioned regulatory approval, can be called in whole or in part on a quarterly basis commencing June 15, 2017. The quarterly cash distributions on the securities were fixed at 6.77% through June 15, 2017, and float at 150 basis points over three-month LIBOR thereafter. The Trust II issuance converted from fixed to floating rate at three month LIBOR plus 150 basis points on June 15, 2017. Upon conversion to a floating rate, a cash flow hedge was initiated which resulted in the total interest rate paid on the debt of 4.34% as of June 30, 2018, 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 June 30, 2018, and December 31, 2017, unamortized debt issuance costs related to the junior subordinated debentures were $716,000 and $739,000 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	6 Months Ended
	Jun. 30, 2018
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, as amended (the “2014 Plan,” and together with the 2008 Plan, the “Plans”). The 2014 Plan was approved at the 2014 annual meeting of stockholders; a maximum of 375,000 shares were authorized to be issued under this plan. Following approval of the 2014 Plan, no further awards will be granted under the 2008 Plan or any other Company equity compensation plan. At the May 2016 annual stockholders meeting, an amendment to the 2014 Plan authorized an additional 600,000 shares to be issued, which resulted in a total of 975,000 shares authorized for issuance under this plan. The 2014 Plan authorizes the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights. Awards may be granted to selected directors and officers or employees under the 2014 Plan at the discretion of the Compensation Committee of the Company’s Board of Directors. As of June 30, 2018, 169,791 shares remained available for issuance under the 2014 Plan. There were no stock options granted or exercised in the six months ended June 30, 2018 and 2017. All stock options are granted for a term of ten years. There is no unrecognized compensation cost related to unvested stock options as all stock options of the Company’s common stock have fully vested. A summary of stock option activity in the Plans for the six months ended June 30, 2018, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding 9,000 $ 7.49 - - Canceled - - - - Expired - - - - Ending outstanding 9,000 $ 7.49 0.6 $ 64 Exercisable at end of period 9,000 $ 7.49 0.6 $ 64 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 254,281 restricted awards issued under the 2014 Plan during the six months ended June 30, 2018, which included 140,000 shares granted under a new performance restricted stock unit agreement for select officers and all directors. The performance period covers January 1, 2018 through December 31, 2020, and vesting will be based upon the achievement of certain key Company performance metrics, such as total shareholder return, earnings, and corporate efficiencies. There were 170,000 restricted awards issued during the six months ended June 30, 2017. 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 $1.1 million and $645,000 in the first six months of 2018 and 2017, respectively. A summary of changes in the Company’s unvested restricted awards for the six months ended June 30, 2018, is as follows: June 30, 2018 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Unvested at January 1 465,000 $ 7.79 Granted 254,281 13.98 Vested (155,500) 5.14 Forfeited - - Unvested at June 30 563,781 $ 11.31 Total unrecognized compensation cost of restricted awards was $4.1 million as of June 30, 2018, which is expected to be recognized over a weighted-average period of 2.22 years.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2018
Earnings Per Share
Earnings Per Share	Note 11 – Earnings Per Share The earnings per share – both basic and diluted – are included below as of June 30 (in thousands except for share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Basic earnings per share: Weighted-average common shares outstanding 29,747,078 29,587,095 29,703,508 29,573,881 Net income $ 6,261 $ 5,146 $ 15,750 $ 9,573 Basic earnings per share $ 0.21 $ 0.17 $ 0.53 $ 0.32 Diluted earnings per share: Weighted-average common shares outstanding 29,747,078 29,587,095 29,703,508 29,573,881 Dilutive effect of unvested restricted awards 1 539,166 426,264 506,234 400,232 Dilutive effect of stock options and warrants 51,038 2,546 43,698 2,431 Diluted average common shares outstanding 30,337,282 30,015,905 30,253,440 29,976,544 Net Income $ 6,261 $ 5,146 $ 15,750 $ 9,573 Diluted earnings per share $ 0.21 $ 0.17 $ 0.52 $ 0.32 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation - 900,839 - 900,839 1 Includes the common stock equivalents for restricted share rights that are dilutive. The above earnings per share calculation also includes a warrant for 815,339 shares of common stock, at an exercise price of $13.43 per share, that was outstanding as of June 30, 2018, as it is considered dilutive. The same warrant was not included as of June 30, 2017, because the warrant was anti-dilutive. The ten-year warrant was issued in 2009, and was sold at auction by the U.S. Treasury in June 2013 to a third party investor.

Regulatory & Capital Matters

Regulatory & Capital Matters	6 Months Ended
	Jun. 30, 2018
Regulatory & Capital Matters
Regulatory & Capital Matters	Note 12 – Regulatory & Capital Matters The Bank is subject to the risk-based capital regulatory guidelines, which include the methodology for calculating the risk-weighted Bank assets, developed by the Office of the Comptroller of the Currency (the “OCC”) and the other bank regulatory agencies. In connection with the current economic environment, the Bank’s current level of nonperforming assets and the risk-based capital guidelines, the Bank’s Board of Directors has determined that the Bank should maintain a Tier 1 leverage capital ratio at or above eight percent (8%) and a total risk-based capital ratio at or above twelve percent (12%). At June 30, 2018, the Bank exceeded those thresholds. At June 30, 2018, the Bank’s Tier 1 capital leverage ratio was 10.75%, an increase of 4 basis points from December 31, 2017, and is well above the 8.00% objective. The Bank’s total capital ratio was 13.51%, an increase of 27 basis points from December 31, 2017, and also well above the objective of 12.00%. Bank holding companies are required to maintain minimum levels of capital in accordance with capital guidelines implemented by the Board of Governors of the Federal Reserve System. The general bank and holding company capital adequacy guidelines are shown in the accompanying table, as are the capital ratios of the Company and the Bank, as of June 30, 2018, and December 31, 2017. 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, 2017, under the heading “Supervision and Regulation.” At June 30, 2018, and December 31, 2017, the Company, on a consolidated basis, exceeded the minimum thresholds to be considered “well capitalized” under current regulatory defined capital ratios. Capital levels and industry defined regulatory minimum required levels are as follows: Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio June 30, 2018 Common equity tier 1 capital to risk weighted assets Consolidated $ 185,044 8.49 % $ 138,946 6.375 % N/A N/A Old Second Bank 273,950 12.62 138,386 6.375 $ 141,099 6.50 % Total capital to risk weighted assets Consolidated 258,854 11.87 215,348 9.875 N/A N/A Old Second Bank 293,266 13.51 214,360 9.875 217,073 10.00 Tier 1 capital to risk weighted assets Consolidated 239,538 10.99 171,643 7.875 N/A N/A Old Second Bank 273,950 12.62 170,947 7.875 173,661 8.00 Tier 1 capital to average assets Consolidated 239,538 9.37 102,257 4.00 N/A N/A Old Second Bank 273,950 10.75 101,935 4.00 127,419 5.00 December 31, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 179,853 9.25 % $ 111,801 5.750 % N/A N/A Old Second Bank 249,417 12.88 111,347 5.750 $ 125,870 6.50 % Total capital to risk weighted assets Consolidated 251,383 12.93 179,837 9.250 N/A N/A Old Second Bank 266,873 13.78 179,142 9.250 193,667 10.00 Tier 1 capital to risk weighted assets Consolidated 233,927 12.03 140,978 7.250 N/A N/A Old Second Bank 249,417 12.88 140,394 7.250 154,917 8.00 Tier 1 capital to average assets Consolidated 233,927 10.08 92,828 4.00 N/A N/A Old Second Bank 249,417 10.79 92,462 4.00 115,578 5.00 1 As of June 30, 2018, amounts are shown inclusive of a capital conservation buffer of 1.875%; as compared to December 31, 2017, of 1.25%. 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.” Dividend Restrictions In addition to the above requirements, banking regulations and capital guidelines generally limit the amount of dividends that may be paid by a bank without prior regulatory approval. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s profits, combined with the retained profit of the previous two years, subject to the capital requirements described above. Pursuant to the Basel III rules that came into effect January 1, 2015, the Bank must keep a buffer of 0.625% for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter of minimum capital requirements in order to avoid additional limitations on capital distributions and certain other payments.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2018
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 and lease losses is essentially based on recent real estate appraisals or the fair value of the collateralized asset. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are made in the appraisal process by the appraisers to reflect differences between the available comparable sales and income data. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. · Nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Assets and Liabilities Measured at Fair Value on a Recurring Basis : The tables below present the balance of assets and liabilities at June 30, 2018, and December 31, 2017, respectively, measured by the Company at fair value on a recurring basis: June 30, 2018 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,876 $ - $ - $ 3,876 U.S. government agencies - 12,216 - 12,216 U.S. government agencies mortgage-backed - 13,407 - 13,407 States and political subdivisions - 257,663 18,449 276,112 Corporate bonds - 700 - 700 Collateralized mortgage obligations - 59,661 1,771 61,432 Asset-backed securities - 109,263 - 109,263 Collateralized loan obligations - 66,638 - 66,638 Loans held-for-sale - 5,206 - 5,206 Mortgage servicing rights - - 7,812 7,812 Interest rate swap agreements - 2,287 - 2,287 Mortgage banking derivatives - 261 - 261 Total $ 3,876 $ 527,302 $ 28,032 $ 559,210 Liabilities: Interest rate swap agreements $ - $ 2,287 $ - $ 2,287 Total $ - $ 2,287 $ - $ 2,287 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,947 $ - $ - $ 3,947 U.S. government agencies - 13,061 - 13,061 U.S. government agencies mortgage-backed - 12,214 - 12,214 States and political subdivisions - 263,831 14,261 278,092 Corporate bonds - 833 - 833 Collateralized mortgage obligations - 63,671 2,268 65,939 Asset-backed securities - 112,932 - 112,932 Collateralized loan obligations - 54,421 - 54,421 Loans held-for-sale - 4,067 - 4,067 Mortgage servicing rights - - 6,944 6,944 Interest rate swap agreements - 727 - 727 Mortgage banking derivatives - 238 - 238 Total $ 3,947 $ 525,995 $ 23,473 $ 553,415 Liabilities: Interest rate swap agreements $ - $ 2,014 $ - $ 2,014 Total $ - $ 2,014 $ - $ 2,014 The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are as follows: Six Months Ended June 30, 2018 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2018 $ 2,268 $ 14,261 $ 6,944 Transfers into Level 3 - - - Transfers out of Level 3 - - - Total gains or losses Included in earnings (or changes in net assets) 26 - 520 Included in other comprehensive income 31 (551) - Purchases, issuances, sales, and settlements Purchases - 19,934 - Issuances - - 668 Settlements (554) (15,195) (320) Sales - - - Ending balance June 30, 2018 $ 1,771 $ 18,449 $ 7,812 Six Months Ended June 30, 2017 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2017 $ 3,119 $ 22,226 $ 6,489 Transfers into Level 3 - - - Transfers out of Level 3 - - - Total gains or losses Included in earnings (or changes in net assets) 23 - (280) Included in other comprehensive income (1) (289) - Purchases, issuances, sales, and settlements Purchases - 10,456 - Issuances - - 601 Settlements (463) (12,045) (282) Sales - - - Ending balance June 30, 2017 $ 2,678 $ 20,348 $ 6,528 The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of June 30, 2018: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 7,812 Discounted Cash Flow Discount Rate 10.0 - 417.6% 10.2 % Prepayment Speed 7.0 - 68.4% 8.2 % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2017: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,944 Discounted Cash Flow Discount Rate 10.0 - 34.3% 10.2 % Prepayment Speed 7.0 - 68.4% 9.6 % In addition to the above, Level 3 fair value measurement included $18.4 million for state and political subdivisions representing various local municipality securities and $1.8 million of collateralized mortgage obligations at June 30, 2018. Both of these were classified as securities available-for-sale, and were valued using a discount based on market spreads of similar assets, but the liquidity premium was an unobservable input. The state and political subdivisions securities balance in Level 3 fair value at June 30, 2017, was $20.3 million and collateralized mortgage obligation balance in Level 3 was $2.3 million at December 31, 2017. Both of these were classified as securities available-for-sale, and were valued using a discount based on market spreads of similar assets, but the liquidity premium was an unobservable input. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis: The Company may be required, from time to time, to measure certain other assets at fair value on a nonrecurring basis in accordance with GAAP. These assets consist of impaired loans and OREO. For assets measured at fair value on a nonrecurring basis at June 30, 2018, and December 31, 2017, respectively, the following tables provide the level of valuation assumptions used to determine each valuation and the carrying value of the related assets: June 30, 2018 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 8,386 $ 8,386 Other real estate owned, net 2 - - 8,912 8,912 Total $ - $ - $ 17,298 $ 17,298 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 $8.9 million and a valuation allowance of $498,000 resulting in an increase of specific allocations within the allowance for loan and lease losses of $90,000 for the six months ended June 30, 2018. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $8.9 million, which is made up of the outstanding balance of $18.2 million, net of a valuation allowance of $8.3 million and participations of $937,000 at June 30, 2018. December 31, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 5,113 $ 5,113 Other real estate owned, net 2 - - 8,371 8,371 Total $ - $ - $ 13,484 $ 13,484 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 $5.3 million and a valuation allowance of $144,000, resulting in an increase of specific allocations within the allowance for loan and lease losses of $856,000 for the year December 31, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $8.4 million, which is made up of the outstanding balance of $17.5 million, net of a valuation allowance of $8.2 million and participations of $937,000, at December 31, 2017. The Company has estimated the fair values of these assets based primarily on Level 3 inputs. OREO and impaired loans are generally valued using the fair value of collateral provided by third party appraisals. These valuations include assumptions related to cash flow projections, discount rates, and recent comparable sales. The numerical ranges of unobservable inputs for these valuation assumptions are not meaningful.

Fair Values of Financial Instru

Fair Values of Financial Instruments	6 Months Ended
	Jun. 30, 2018
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. For June 30, 2018, the fair values of loans and leases are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. This is not comparable with the fair value disclosures for December 31, 2017, which were estimated using an entrance price basis. For December 31, 2017, fair values of variable rate loans and leases with no significant change in credit risk were based on carrying values. The fair values of other loans and leases were estimated using discounted cash flow analyses which used interest rates being offered for loans and leases with similar terms to borrowers of similar credit quality. The fair value of time deposits is estimated using discounted future cash flows at current rates offered for deposits of similar remaining maturities. The fair values of borrowings were estimated based on interest rates available to the Company for debt with similar terms and remaining maturities. The fair value of off balance sheet volume is not considered material. The carrying amount and estimated fair values of financial instruments were as follows: June 30, 2018 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 34,161 $ 34,161 $ 34,161 $ - $ - Interest bearing deposits with financial institutions 31,147 31,147 31,147 - - Securities available-for-sale 543,644 543,644 3,876 519,548 20,220 FHLBC and FRBC Stock 9,093 9,093 - 9,093 - Loans held-for-sale 5,206 5,206 - 5,206 - Loans, net 1,829,841 1,816,393 - - 1,816,393 Accrued interest receivable 10,244 10,244 - 10,244 - Financial liabilities: Noninterest bearing deposits $ 620,807 $ 620,807 $ 620,807 $ - $ - Interest bearing deposits 1,541,044 1,534,109 - 1,534,109 - Securities sold under repurchase agreements 54,038 54,038 - 54,038 - Other short-term borrowings 76,625 76,625 - 76,625 - Junior subordinated debentures 57,662 59,471 33,267 26,204 - Senior notes 44,108 46,743 - 46,743 - Note payable and other borrowings 23,496 23,496 - 23,496 - Borrowing interest payable 192 192 - 192 - Deposit interest payable 800 800 - 800 - December 31, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 37,444 $ 37,444 $ 37,444 $ - $ - Interest bearing deposits with financial institutions 18,389 18,389 18,389 - - Securities available-for-sale 541,439 541,439 3,947 520,963 16,529 FHLBC and FRBC Stock 10,168 10,168 - 10,168 - Loans held-for-sale 4,067 4,067 - 4,067 - Loans, net 1,600,161 1,586,722 - - 1,586,722 Accrued interest receivable 8,595 8,595 - 8,595 - Financial liabilities: Noninterest bearing deposits $ 572,404 $ 572,404 $ 572,404 $ - $ - Interest bearing deposits 1,350,521 1,346,339 - 1,346,339 - Securities sold under repurchase agreements 29,918 29,918 - 29,918 - Other short-term borrowings 115,000 115,000 - 115,000 - Junior subordinated debentures 57,639 59,471 33,267 26,204 - Subordinated debenture 44,058 46,743 - 46,743 - Interest rate swap agreements 1,287 1,287 - 1,287 - Borrowing interest payable 140 140 - 140 - Deposit interest payable 631 631 - 631 -

Financial Instruments with Off-

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions	6 Months Ended
	Jun. 30, 2018
Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions	Note 15 – Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk Risk Management Objective of Using Derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2018, such derivatives were used to hedge the variable cash flows associated with existing variable-rate borrowings. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are received on the Company’s variable-rate borrowings. During the next twelve months, the Company estimates that an additional $59,000 will be reclassified as a reduction to interest expense. Non-designated Hedges Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of June 30, 2018 and December 31, 2017. Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Number of Transactions Notional Amount $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Derivatives designated as hedging instruments Interest Rate Products 1 25,774 Other Assets 507 Other Assets - Other Liabilities - Other Liabilities 1,287 Total derivatives designated as hedging instruments 507 - - 1,287 Derivatives not designated as hedging instruments Interest Rate Products 2 51,548 Other Assets 507 Other Assets - Other Liabilities 507 Other Liabilities 1,287 Other Contracts 3 15,857 Other Assets - Other Assets - Other Liabilities 5 Other Liabilities 13 Total derivatives not designated as hedging instruments 507 - 512 1,301 Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting The fair value and cash flow hedge accounting related to derivatives covered under ASC Subtopic 815-20 impacted Accumulated Other Comprehensive Income (“AOCI”) and the Income Statement. The gain recognized in AOCI on derivatives totaled $473,000 as of June 30, 2018, and a loss in AOCI of $632,000 as of June 30, 2017. The amount of the gain (loss) reclassified from AOCI to interest income on the income statement totaled ($42,000) and ($18,000) for the three months ended June 30, 2018, and June 30, 2017, respectively. The amount of the gain (loss) reclassified from AOCI to interest income or interest expense on the income statement totaled ($116,000) and ($18,000) for the six months ended June 30, 2018, and June 30, 2017, respectively. Credit-risk-related Contingent Features For derivative transactions involving counterparties who are lending customers of the Company, the derivative credit exposure is managed through the normal credit review and monitoring process, which may include collateralization, financial covenants and/or financial guarantees of affiliated parties. Agreements with such customers require that losses associated with derivative transactions receive payment priority from any funds recovered should a customer default and ultimate disposition of collateral or guarantees occur. Credit exposure to broker/dealer counterparties is managed through agreements with each derivative counterparty that require collateralization of fair value gains owed by such counterparties. Some small degree of credit exposure exists due to timing differences between when a gain may occur and the subsequent point in time that collateral is delivered to secure that gain. This is monitored by the Company and procedures are in place to minimize this exposure. Such agreements also require the Company to collateralize counterparties in circumstances wherein the fair value of the derivatives result in loss to the Company. Other provisions of such agreements include the definition of certain events that may lead to the declaration of default and/or the early termination of the derivative transaction(s): · if the Company either defaults or is capable of being declared in default on any of its indebtedness (exclusive of deposit obligations), then the Company could also be declared in default on its derivative obligations. · if a merger occurs that materially changes the Company's creditworthiness in an adverse manner. · If certain specified adverse regulatory actions occur, such as the issuance of a Cease and Desist Order, or citations for actions considered Unsafe and Unsound or that may lead to the termination of deposit insurance coverage by the Federal Deposit Insurance Corporation. As of June 30, 2018, there were no derivatives in a net liability position. As of June 30, 2018, the Company has not posted any collateral related to derivatives agreements. The Bank also issues letters of credit, which are conditional commitments that guarantee the performance of a customer to a third party. The credit risk involved and collateral obtained in issuing letters of credit are essentially the same as that involved in extending loan commitments to our customers. In addition to customer related commitments, the Company is responsible for letters of credit commitments that relate to properties held in OREO. The following table represents the Company’s contractual commitments due to letters of credit as of June 30, 2018, and December 31, 2017. The following table is a summary of letter of credit commitments (in thousands): June 30, 2018 December 31, 2017 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 2,017 $ 5,320 $ 7,337 $ 177 $ 3,770 $ 3,947 Commercial standby - 395 395 - 354 354 Performance standby 914 6,676 7,590 241 7,594 7,835 2,931 12,391 15,322 418 11,718 12,136 Non-borrower: Performance standby - 67 67 - 142 142 Total letters of credit $ 2,931 $ 12,458 $ 15,389 $ 418 $ 11,860 $ 12,278

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, ” which deferred the effective date of ASU 2014-09 for an additional year. ASU 2015-14 was effective for annual reporting periods beginning after December 15, 2017. The amendments could 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 was 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 performed an analysis of the impact of adoption of this ASU, reviewing revenue recorded from service charges on deposit accounts, asset management fees, gains (losses) on other real estate owned, and debit card interchange fees. Certain revenue received, such as service charges on deposit accounts and interchange fees, is recorded immediately or as the service is performed. Asset management fees recorded by the Company take the form of wealth management income and brokerage income, and both types of fees are recorded after services are rendered, with no contractual requirement of refund to a customer based on non-achievement of fund performance objectives. Finally, the methodology used to record revenue from gains (losses) due to the sale of other real estate owned is not anticipated to change, as the Company currently records income or expense only upon consummation of the sale, and any revenue recorded stemming from seller financed transactions is reviewed for deferral, as appropriate. The Company adopted ASU 2014-09 and related issuances on January 1, 2018, with no cumulative effect adjustment to opening retained earnings required upon implementation of this standard. In January 2016, the FASB issued ASU No. 2016-01 “ Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities .” The objective of the issuance is to provide users of financial statements with more decision–useful information, by making targeted improvements to GAAP. These targeted improvements included revisions to the methodology of accounting for equity investments, eliminating certain disclosures on fair value assumptions for financial instruments measured at amortized cost, and requiring public business entities to use the exit price notion, as defined in ASC 820, for the measurement of the fair value of financial instruments. This standard was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this standard as of January 1, 2018. Adoption of this standard resulted in the Company’s use of an exit price rather than an entrance price to determine the fair value of loans and deposits not already measured at fair value on a non-recurring basis in the consolidated balance sheet disclosures; see Note 14–Fair Value of Financial Instruments for further information regarding the valuation processes. 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 in the process of identifying all lease arrangements, methodology of tracking, and practical expedients that may be applied, such as the cumulative effect adjustment in equity upon adoption as of January 1, 2019, compared to a retroactive adoption. We will continue to assess the impact of ASU 2016-02 on our accounting and disclosures. 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 historical data by loan pools and collateral classifications, and completing model option evaluations 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 will continue to decrease future quarterly net interest income over the call period until the premium 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 2017 earnings. Net interest income, net income and diluted earnings per share (“EPS”) were previously reported as $22.1 million, $5.5 million, and $0.18 for the quarter ended June 30, 2017, and $42.9 million, $10.0 million, and $0.33 for the six months ended June 30, 2017. The effect of the adoption of ASU 2017-08 resulted in the currently reported totals of net interest income, net income and diluted EPS of $21.8 million, $5.1 million, and $0.17 for the quarter ended June 30, 2017, and $42.4 million, $9.6 million, and $0.32 for the six months ended June 30, 2017. In August 2017, the FASB issued ASU No. 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 adopted ASU 2017-12 on January 1, 2018, on a modified retrospective basis. FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. As the Company does not currently have any derivative financial instruments subject to master netting agreements, there was no impact to the balance sheet. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income .” This ASU was issued in response to the enactment of tax bill H.R.1 “Tax Cuts and Jobs Act”, which resulted in “stranding” the tax effects of items within accumulated other comprehensive income related to the adjustment of deferred taxes due to the reduction of the federal corporate income tax rate. The amendments proposed allow the reclassification of these stranded tax effects to retained earnings, and were effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate tax rate is recognized. The Company adopted ASU 2018-02 as of January 1, 2018, and a reclassification of $319,000, net, was recorded, which increased accumulated other comprehensive income and reduced retained earnings with the adoption of the accounting standard.
Subsequent Events	Subsequent Events On July 17, 2018, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on August 6, 2018, to stockholders of record as of July 27, 2018; dividends of $297,000 were paid to stockholders on August 6, 2018.

Acquisitions (Tables)

Acquisitions (Tables)	6 Months Ended
	Jun. 30, 2018
Acquisitions
Summary of acquisition	GCFC/ABC Bank Acquisition Summary As of Date of Acquisition April 20, 2018 Assets Cash and due from banks $ 6,669 Interest bearing deposits with financial institutions 500 Securities available-for-sale, at fair value 72,091 Federal funds sold 4,300 FHLBC stock 1,549 Loans 227,594 Premises and equipment 5,339 Other real estate owned 432 Goodwill and core deposit intangible 12,957 Deferred tax assets, net 3,456 Other assets 2,083 Total assets $ 336,970 Liabilities Noninterest bearing demand $ 58,005 Savings, NOW and money market 91,494 Time 98,999 Total deposits 248,498 Securities sold under repurchase agreements 5,624 Other short-term borrowings 10,875 Notes payable and other borrowings 23,544 Other liabilities 1,249 Total liabilities 289,790 Cash consideration paid 47,180 Total Liabilities Assumed and Cash Consideration Paid for Acquisition $ 336,970
Schedule of Acquired Loans as of Acquisition Date	April 20, 2018 June 30, 2018 ABC Bank Acquired Loans PCI Non-PCI PCI Non-PCI Fair Value $ 11,360 $ 216,306 $ 11,214 $ 208,929 Contractually required principal and interest payment 19,447 219,488 18,989 211,341 Best estimate of contractual cash flows not expected to be collected 6,537 2,511 6,402 2,119 Best estimate of contractual cash flows expected to be collected 12,910 216,977 12,587 209,222

Securities (Tables)

Securities (Tables)	6 Months Ended
	Jun. 30, 2018
Securities
Schedule of amortized cost and fair value of the securities portfolio and corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss	Gross Gross Amortized Unrealized Unrealized Fair June 30, 2018 Cost Gains Losses Value Securities available-for-sale U.S. Treasuries $ 4,004 $ - $ (128) $ 3,876 U.S. government agencies 12,369 - (153) 12,216 U.S. government agencies mortgage-backed 14,011 - (604) 13,407 States and political subdivisions 279,007 1,640 (4,535) 276,112 Corporate bonds 685 21 (6) 700 Collateralized mortgage obligations 63,778 60 (2,406) 61,432 Asset-backed securities 110,053 1,011 (1,801) 109,263 Collateralized loan obligations 66,489 223 (74) 66,638 Total securities available-for-sale $ 550,396 $ 2,955 $ (9,707) $ 543,644 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2017 Cost Gains Losses Value Securities available-for-sale U.S. Treasury $ 4,002 $ - $ (55) $ 3,947 U.S. government agencies 13,062 8 (9) 13,061 U.S. government agencies mortgage-backed 12,372 7 (165) 12,214 States and political subdivisions 272,240 7,116 (1,264) 278,092 Corporate bonds 823 21 (11) 833 Collateralized mortgage obligations 66,892 202 (1,155) 65,939 Asset-backed securities 113,983 862 (1,913) 112,932 Collateralized loan obligations 54,271 251 (101) 54,421 Total securities available-for-sale $ 537,645 $ 8,467 $ (4,673) $ 541,439
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 $ 10,550 2.10 % $ 10,540 Due after one year through five years 4,689 2.20 4,576 Due after five years through ten years 5,343 3.27 5,413 Due after ten years 275,483 2.98 272,375 296,065 2.94 292,904 Mortgage-backed and collateralized mortgage obligations 77,789 3.11 74,839 Asset-backed securities 110,053 3.23 109,263 Collateralized loan obligations 66,489 4.34 66,638 Total securities available-for-sale $ 550,396 3.19 % $ 543,644
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: June 30, 2018 Amortized Fair Issuer Cost Value GCO Education Loan Funding Corp $ 27,685 $ 26,754 Towd Point Mortgage Trust 28,966 28,080 Student Loan Marketing Association 25,780 26,176
Schedule of securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position	Less than 12 months 12 months or more June 30, 2018 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 $ 128 $ 3,876 - $ - $ - 1 $ 128 $ 3,876 U.S. government agencies 4 153 12,216 - - - 4 153 12,216 U.S. government agencies mortgage-backed 7 356 8,968 5 248 4,439 12 604 13,407 States and political subdivisions 43 3,264 141,455 2 1,271 3,849 45 4,535 145,304 Corporate bonds - - - 1 6 198 1 6 198 Collateralized mortgage obligations 3 399 20,353 9 2,007 37,782 12 2,406 58,135 Asset-backed securities 3 65 8,451 6 1,736 56,539 9 1,801 64,990 Collateralized loan obligations 3 60 17,364 1 14 7,986 4 74 25,350 Total securities available-for-sale 64 $ 4,425 $ 212,683 24 $ 5,282 $ 110,793 88 $ 9,707 $ 323,476 Less than 12 months 12 months or more December 31, 2017 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. Treasuries 1 $ 55 $ 3,947 - $ - $ - 1 $ 55 $ 3,947 U.S. government agencies 2 9 6,550 - - - 2 9 6,550 U.S. government agencies mortgage-backed 4 24 5,501 5 141 4,843 9 165 10,344 States and political subdivisions 13 1,237 45,985 1 27 1,512 14 1,264 47,497 Corporate bonds - - - 1 11 332 1 11 332 Collateralized mortgage obligations 3 31 11,534 8 1,124 40,219 11 1,155 51,753 Asset-backed securities - - - 7 1,913 61,745 7 1,913 61,745 Collateralized loan obligations 3 101 29,313 - - - 3 101 29,313 Total securities available-for-sale 26 $ 1,457 $ 102,830 22 $ 3,216 $ 108,651 48 $ 4,673 $ 211,481
Schedule of proceeds from sale and gross realized gains and losses on sale of securities	Three Months Ended Six Months Ended June 30, June 30, Securities available-for-sale 2018 2017 2018 2017 Proceeds from sales of securities $ 90,224 $ 36,468 $ 92,746 $ 100,856 Gross realized gains on securities 312 71 347 437 Gross realized losses on securities - (202) - (704) Securities realized gains (losses), net $ 312 $ (131) $ 347 $ (267) Income tax (expense) benefit on net realized gains (losses) (88) 52 (98) 106

Loans (Tables)

Loans (Tables)	6 Months Ended
	Jun. 30, 2018
Loans
Schedule of major classifications of loans	June 30, 2018 December 31, 2017 Commercial $ 299,536 $ 272,851 Leases 66,687 68,325 Real estate - commercial 808,264 750,991 Real estate - construction 115,486 85,162 Real estate - residential 404,908 313,397 Home equity lines of credit "HELOC" 127,986 112,833 Other 1 13,969 13,384 Total loans, excluding deferred loan costs and PCI loans 1,836,836 1,616,942 Net deferred loan costs 1,112 680 Total loans, excluding PCI loans 1,837,948 1,617,622 PCI loans, net of purchase accounting adjustments 11,214 - Total loans $ 1,849,162 $ 1,617,622
Schedule of aged analysis of past due loans by class of loans	Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and June 30, 2018 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 210 $ - $ - $ 210 $ 299,326 $ - $ 299,536 $ - Leases - - - - 66,687 - 66,687 - Real estate - commercial Owner occupied general purpose 903 - 450 1,353 172,922 823 175,098 477 Owner occupied special purpose 1,981 - - 1,981 194,604 426 197,011 - Non-owner occupied general purpose 3,282 - 174 3,456 279,599 39 283,094 178 Non-owner occupied special purpose - - - - 87,704 3,099 90,803 - Retail properties - - - - 47,582 - 47,582 - Farm - - - - 14,676 - 14,676 - Real estate - construction Homebuilder - - - - 7,649 - 7,649 - Land - - - - 9,168 - 9,168 - Commercial speculative - - - - 39,730 - 39,730 - All other 59 - 442 501 58,245 193 58,939 475 Real estate - residential Investor 466 108 38 612 72,896 371 73,879 40 Multifamily 232 - - 232 191,883 - 192,115 - Owner occupied 710 208 - 918 134,265 3,731 138,914 - HELOC 599 172 49 820 126,443 723 127,986 50 Other 1 39 - - 39 15,026 16 15,081 - Total, excluding PCI loans $ 8,481 $ 488 $ 1,153 $ 10,122 $ 1,818,405 $ 9,421 $ 1,837,948 $ 1,220 PCI loans, net of purchase accounting adjustments 387 - - 387 7,850 2,977 11,214 Total $ 8,868 $ 488 $ 1,153 $ 10,509 $ 1,826,255 $ 12,398 $ 1,849,162 $ 1,220 Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2017 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial $ 995 $ 275 $ - $ 1,270 $ 271,581 $ - $ 272,851 $ - Leases - - - - 68,147 178 68,325 - Real estate - commercial Owner occupied general purpose 1,136 - - 1,136 144,267 455 145,858 - Owner occupied special purpose 226 - - 226 170,546 342 171,114 - Non-owner occupied general purpose - 593 - 593 273,203 1,163 274,959 - Non-owner occupied special purpose - - 248 248 92,923 - 93,171 254 Retail properties - - - - 49,538 1,081 50,619 - Farm - - - - 15,270 - 15,270 - Real estate - construction Homebuilder 129 - - 129 2,221 - 2,350 - Land 1,124 - - 1,124 1,319 - 2,443 - Commercial speculative - - - - 32,028 - 32,028 - All other - - - - 48,140 201 48,341 - Real estate - residential Investor - - - - 55,248 372 55,620 - Multifamily - - - - 125,049 4,723 129,772 - Owner occupied 74 - - 74 123,257 4,674 128,005 - HELOC 491 278 - 769 110,872 1,192 112,833 - Other 1 37 - - 37 14,019 7 14,063 - Total $ 4,212 $ 1,146 $ 248 $ 5,606 $ 1,597,628 $ 14,388 $ 1,617,622 $ 254 1 The “Other” class includes consumer, overdrafts and net deferred costs.
Schedule of credit quality indicators by class of loans	June 30, 2018 Special Pass Mention Substandard 2 Doubtful Total Commercial $ 298,512 $ 631 $ 393 $ - $ 299,536 Leases 66,148 - 539 - 66,687 Real estate - commercial Owner occupied general purpose 166,962 4,915 3,221 - 175,098 Owner occupied special purpose 195,009 254 1,748 - 197,011 Non-owner occupied general purpose 275,728 4,899 2,467 - 283,094 Non-owner occupied special purpose 87,704 - 3,099 - 90,803 Retail Properties 45,755 - 1,827 - 47,582 Farm 13,428 - 1,248 - 14,676 Real estate - construction Homebuilder 7,649 - - - 7,649 Land 9,168 - - - 9,168 Commercial speculative 39,730 - - - 39,730 All other 56,443 2,130 366 - 58,939 Real estate - residential Investor 72,759 91 1,029 - 73,879 Multifamily 188,813 - 3,302 - 192,115 Owner occupied 133,485 1 5,428 - 138,914 HELOC 126,353 - 1,633 - 127,986 Other 1 15,063 - 18 - 15,081 Total, excluding PCI loans $ 1,798,709 $ 12,921 $ 26,318 $ - $ 1,837,948 PCI loans, net of purchase accounting adjustments - - 11,214 - 11,214 Total $ 1,798,709 $ 12,921 $ 37,532 $ - $ 1,849,162 December 31, 2017 Special Pass Mention Substandard 2 Doubtful Total Commercial $ 270,889 $ 1,962 $ - $ - $ 272,851 Leases 67,500 - 825 - 68,325 Real estate - commercial Owner occupied general purpose 142,843 1,927 1,088 - 145,858 Owner occupied special purpose 169,621 1,152 341 - 171,114 Non-owner occupied general purpose 271,731 2,065 1,163 - 274,959 Non-owner occupied special purpose 89,582 - 3,589 - 93,171 Retail Properties 48,321 1,217 1,081 - 50,619 Farm 11,755 1,029 2,486 - 15,270 Real estate - construction Homebuilder 2,350 - - - 2,350 Land 2,443 - - - 2,443 Commercial speculative 32,028 - - - 32,028 All other 46,913 1,052 376 - 48,341 Real estate - residential Investor 55,172 - 448 - 55,620 Multifamily 125,049 - 4,723 - 129,772 Owner occupied 122,178 561 5,266 - 128,005 HELOC 110,934 - 1,899 - 112,833 Other 1 14,043 - 20 - 14,063 Total $ 1,583,352 $ 10,965 $ 23,305 $ - $ 1,617,622 1 The “Other” class includes consumer, overdrafts and net deferred costs. 2 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans.
Schedule of impaired loans by class of loan	Six Months Ended As of June 30, 2018 June 30, 2018 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ - $ - $ - $ - $ - Leases - - - 89 - Commercial real estate Owner occupied general purpose 911 985 - 683 3 Owner occupied special purpose 426 546 - 384 - Non-owner occupied general purpose 39 81 - 601 - Non-owner occupied special purpose - - - - - Retail properties - - - 541 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other 193 226 - 197 - Residential Investor 371 468 - 371 - Multifamily - - - 2,362 - Owner occupied 4,244 5,769 - 4,726 18 HELOC 741 860 - 933 1 Other 1 16 16 - 11 - Total impaired loans with no recorded allowance 6,941 8,951 - 10,898 22 With an allowance recorded Commercial - - - - - Leases - - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - - - Non-owner occupied special purpose 3,099 3,575 419 1,550 - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor 815 815 10 822 22 Multifamily - - - - - Owner occupied 3,646 3,646 45 3,544 73 HELOC 1,321 1,321 24 1,153 24 Other 1 3 3 - 2 - Total impaired loans with a recorded allowance 8,884 9,360 498 7,071 119 Total impaired loans $ 15,825 $ 18,311 $ 498 $ 17,969 $ 141 1 The “Other” class includes consumer, overdrafts and net deferred costs. Impaired loans by class of loans as of December 31, 2017, and for the six months ended June 30, 2017, were as follows: Six Months Ended As of December 31, 2017 June 30, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ - $ - $ - $ 128 $ - Leases 178 213 - 293 - Commercial real estate Owner occupied general purpose 455 495 - 1,170 - Owner occupied special purpose 342 498 - 376 - Non-owner occupied general purpose 1,163 1,538 - 1,443 1 Non-owner occupied special purpose - - - 507 - Retail properties 1,081 1,177 - 1,161 - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - 72 - All other 201 229 - 180 - Residential Investor 372 676 - 1,708 20 Multifamily 4,723 4,965 - 2,412 - Owner occupied 5,208 6,680 - 9,016 65 HELOC 1,125 1,313 - 2,227 15 Other 1 7 8 - 105 - Total impaired loans with no recorded allowance 14,855 17,792 - 20,798 101 With an allowance recorded Commercial - - - - - Leases - - - 120 - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - 123 - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor 829 829 10 - - Multifamily - - - - - Owner occupied 3,443 3,443 43 402 - HELOC 985 985 91 - - Other 1 - - - - - Total impaired loans with a recorded allowance 5,257 5,257 144 645 - Total impaired loans $ 20,112 $ 23,049 $ 144 $ 21,443 $ 101
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 Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 # 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 Owner occupied special purpose Other 1 1 $ 110 $ 56 1 $ 110 $ 56 Real estate - residential Owner occupied HAMP 2 1 49 39 1 49 39 Other 1 HELOC Rate 3 1 24 24 Other 1 3 305 287 7 523 503 Total 5 $ 464 $ 382 10 $ 706 $ 622 TDR Modifications TDR Modifications Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings HELOC Other 1 2 $ 155 $ 147 6 $ 399 $ 388 Total 2 $ 155 $ 147 6 $ 399 $ 388 1 Other: Change of terms from bankruptcy court. 2 HAMP: Home Affordable Modification Program. 3 Rate: Refers to interest rate reduction
Schedule of accretable discount on purchased loans	The following table details the accretable discount on all of the Company’s purchased loans, both non-PCI loans and PCI loans as of June 30, 2018. Accretable Discount - Non-PCI Loans Accretable Discount - PCI Loans Non-Accretable Discount - PCI Loans Total Beginning balance, April 1, 2018 $ 694 $ - $ - $ 694 Purchases 3,182 1,551 6,536 11,269 Accretion (881) (176) - (1,057) Transfer 1 - (2) (133) (135) Ending balance, June 30, 2018 $ 2,995 $ 1,373 $ 6,403 $ 10,771 1 Transfer was due to loans moved to OREO.

Allowance for Loan Losses (Tabl

Allowance for Loan Losses (Tables)	6 Months Ended
	Jun. 30, 2018
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 and lease losses by segment of loans based on method of impairment for the three and six months ended June 30, 2018, were as follows: Real Estate Real Estate Real Estate Allowance for loan and lease losses: Commercial Leases Commercial Construction Residential HELOC Other 1 Total Three months ended June 30, 2018 Beginning balance $ 2,604 $ 617 $ 9,565 $ 1,143 $ 1,854 $ 1,535 $ 870 $ 18,188 Charge-offs 15 8 504 - 5 65 102 699 Recoveries 92 - 21 - 105 91 73 382 (Release) Provision (5) 25 1,455 255 (136) (171) 27 1,450 Ending balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Six months ended June 30, 2018 Beginning balance $ 2,453 $ 692 $ 9,522 $ 923 $ 1,846 $ 1,446 $ 579 $ 17,461 Charge-offs 31 13 408 (16) (55) 92 201 674 Recoveries 109 - 388 3 1,016 138 152 1,806 Provision (Release) 145 (45) 1,035 456 (1,099) (102) 338 728 Ending balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Ending balance: Individually evaluated for impairment $ - $ - $ 419 $ - $ 55 $ 24 $ - $ 498 Ending balance: Collectively evaluated for impairment 2,676 634 10,118 1,398 1,763 1,366 868 18,823 Ending balance: Acquired and accounted for ASC 310-30 - - - - - - - - Total ending allowance balance $ 2,676 $ 634 $ 10,537 $ 1,398 $ 1,818 $ 1,390 $ 868 $ 19,321 Loans: Ending balance: Individually evaluated for Impairment $ - $ - $ 4,475 $ 193 $ 11,138 $ - $ 19 $ 15,825 Ending balance: Collectively evaluated for impairment 299,536 66,687 803,789 115,293 393,770 127,986 15,062 1,822,123 Ending balance: Acquired and accounted for ASC 310-30 2 - 4,146 1,556 5,509 - 1 11,214 Total ending loans balance $ 299,538 $ 66,687 $ 812,410 $ 117,042 $ 410,417 $ 127,986 $ 15,082 $ 1,849,162 1 The “Other” class includes consumer, overdrafts and net deferred costs. Changes in the allowance for loan and lease losses by segment of loans based on method of impairment for the three and six months ended June 30, 2017, were as follows: Allowance for loan and lease losses: Commercial Leases Commercial Construction Residential HELOC Other 1 Total Three months ended June 30, 2017 Beginning balance $ 1,672 $ 603 $ 7,831 $ 978 $ 2,438 $ 1,340 $ 879 $ 15,741 Charge-offs 6 - 4 - 946 30 80 1,066 Recoveries 5 - 46 60 110 139 51 411 Provision (Release) 479 188 234 (181) 270 64 (304) 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Six months ended June 30, 2017 Beginning balance $ 1,629 $ 633 $ 9,547 $ 389 $ 2,178 $ 1,331 $ 451 $ 16,158 Charge-offs 7 117 278 4 977 194 180 1,757 Recoveries 7 - 81 78 153 238 128 685 Provision (Release) 521 275 (1,243) 394 518 138 147 750 Ending balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Ending balance: Individually evaluated for impairment $ - $ 98 $ - $ - $ - $ - $ - $ 98 Ending balance: Collectively evaluated for impairment 2,150 693 8,107 857 1,872 1,513 546 15,738 Total ending allowance balance $ 2,150 $ 791 $ 8,107 $ 857 $ 1,872 $ 1,513 $ 546 $ 15,836 Loans: Ending balance: Individually evaluated for impairment $ 216 $ 460 $ 3,113 $ 220 $ 14,609 $ 1,971 $ 9 $ 20,598 Ending balance: Collectively evaluated for impairment 256,544 69,678 702,990 93,441 267,509 114,081 14,806 1,519,049 Total ending loan balance $ 256,760 $ 70,138 $ 706,103 $ 93,661 $ 282,118 $ 116,052 $ 14,815 $ 1,539,647

Other Real Estate Owned (Tables

Other Real Estate Owned (Tables)	6 Months Ended
	Jun. 30, 2018
Other Real Estate Owned
Schedule of activity in the other real estate owned (OREO) portfolio, net of valuation reserve	Three Months Ended Six Months Ended June 30, June 30, Other real estate owned 2018 2017 2018 2017 Balance at beginning of period $ 7,063 $ 13,481 $ 8,371 $ 11,916 Property additions 2,812 204 2,812 3,620 Property improvements - - 59 - Less: Proceeds from property disposals, net of participation purchase and of gains/losses 709 1,569 1,964 3,102 Period valuation adjustments 254 392 366 710 Balance at end of period $ 8,912 $ 11,724 $ 8,912 $ 11,724
Schedule of activity in valuation allowance	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Balance at beginning of period $ 8,099 $ 9,659 $ 8,208 $ 9,982 Provision for unrealized losses 254 392 366 710 Reductions taken on sales (5) (1,747) (226) (2,388) Other adjustments - - - - Balance at end of period $ 8,348 $ 8,304 $ 8,348 $ 8,304
Schedule of expenses related to foreclosed assets, net of lease revenue	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Gain on sales, net $ (24) $ (104) $ (104) $ (178) Provision for unrealized losses 254 392 366 710 Operating expenses 213 293 369 816 Less: Lease revenue 14 42 29 100 Net OREO expense $ 429 $ 539 $ 602 $ 1,248

Deposits (Tables)

Deposits (Tables)	6 Months Ended
	Jun. 30, 2018
Deposits
Schedule of major classifications of deposits	June 30, 2018 December 31, 2017 Noninterest bearing demand $ 620,807 $ 572,404 Savings 301,832 262,220 NOW accounts 435,514 429,448 Money market accounts 320,949 276,082 Certificates of deposit of less than $100,000 249,049 216,493 Certificates of deposit of $100,000 through $250,000 175,174 122,489 Certificates of deposit of more than $250,000 58,526 43,789 Total deposits $ 2,161,851 $ 1,922,925

Borrowings (Tables)

Borrowings (Tables)	6 Months Ended
	Jun. 30, 2018
Borrowings
Summary of borrowings and junior subordinated debentures	June 30, 2018 December 31, 2017 Securities sold under repurchase agreements $ 54,038 $ 29,918 Other short-term borrowings 1 76,625 115,000 Junior subordinated debentures 57,662 57,639 Senior notes 44,108 44,058 Notes payable and other borrowings 23,496 - Total borrowings $ 255,929 $ 246,615

Equity Compensation Plans (Tabl

Equity Compensation Plans (Tables)	6 Months Ended
	Jun. 30, 2018
Equity Compensation Plans
Summary of stock option activity in Incentive Plan	A summary of stock option activity in the Plans for the six months ended June 30, 2018, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding 9,000 $ 7.49 - - Canceled - - - - Expired - - - - Ending outstanding 9,000 $ 7.49 0.6 $ 64 Exercisable at end of period 9,000 $ 7.49 0.6 $ 64
Summary of changes in nonvested shares of restricted share rights	June 30, 2018 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Unvested at January 1 465,000 $ 7.79 Granted 254,281 13.98 Vested (155,500) 5.14 Forfeited - - Unvested at June 30 563,781 $ 11.31

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2018
Earnings Per Share
Schedule of Earnings Per Share	Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Basic earnings per share: Weighted-average common shares outstanding 29,747,078 29,587,095 29,703,508 29,573,881 Net income $ 6,261 $ 5,146 $ 15,750 $ 9,573 Basic earnings per share $ 0.21 $ 0.17 $ 0.53 $ 0.32 Diluted earnings per share: Weighted-average common shares outstanding 29,747,078 29,587,095 29,703,508 29,573,881 Dilutive effect of unvested restricted awards 1 539,166 426,264 506,234 400,232 Dilutive effect of stock options and warrants 51,038 2,546 43,698 2,431 Diluted average common shares outstanding 30,337,282 30,015,905 30,253,440 29,976,544 Net Income $ 6,261 $ 5,146 $ 15,750 $ 9,573 Diluted earnings per share $ 0.21 $ 0.17 $ 0.52 $ 0.32 Number of antidilutive options and warrants excluded from the diluted earnings per share calculation - 900,839 - 900,839 1 Includes the common stock equivalents for restricted share rights that are dilutive.

Regulatory & Capital Matters (T

Regulatory & Capital Matters (Tables)	6 Months Ended
	Jun. 30, 2018
Regulatory & Capital Matters
Schedule of capital levels and industry defined regulatory minimum required levels	Capital levels and industry defined regulatory minimum required levels are as follows: Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio June 30, 2018 Common equity tier 1 capital to risk weighted assets Consolidated $ 185,044 8.49 % $ 138,946 6.375 % N/A N/A Old Second Bank 273,950 12.62 138,386 6.375 $ 141,099 6.50 % Total capital to risk weighted assets Consolidated 258,854 11.87 215,348 9.875 N/A N/A Old Second Bank 293,266 13.51 214,360 9.875 217,073 10.00 Tier 1 capital to risk weighted assets Consolidated 239,538 10.99 171,643 7.875 N/A N/A Old Second Bank 273,950 12.62 170,947 7.875 173,661 8.00 Tier 1 capital to average assets Consolidated 239,538 9.37 102,257 4.00 N/A N/A Old Second Bank 273,950 10.75 101,935 4.00 127,419 5.00 December 31, 2017 Common equity tier 1 capital to risk weighted assets Consolidated $ 179,853 9.25 % $ 111,801 5.750 % N/A N/A Old Second Bank 249,417 12.88 111,347 5.750 $ 125,870 6.50 % Total capital to risk weighted assets Consolidated 251,383 12.93 179,837 9.250 N/A N/A Old Second Bank 266,873 13.78 179,142 9.250 193,667 10.00 Tier 1 capital to risk weighted assets Consolidated 233,927 12.03 140,978 7.250 N/A N/A Old Second Bank 249,417 12.88 140,394 7.250 154,917 8.00 Tier 1 capital to average assets Consolidated 233,927 10.08 92,828 4.00 N/A N/A Old Second Bank 249,417 10.79 92,462 4.00 115,578 5.00 1 As of June 30, 2018, amounts are shown inclusive of a capital conservation buffer of 1.875%; as compared to December 31, 2017, of 1.25%. 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.”

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis	June 30, 2018 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,876 $ - $ - $ 3,876 U.S. government agencies - 12,216 - 12,216 U.S. government agencies mortgage-backed - 13,407 - 13,407 States and political subdivisions - 257,663 18,449 276,112 Corporate bonds - 700 - 700 Collateralized mortgage obligations - 59,661 1,771 61,432 Asset-backed securities - 109,263 - 109,263 Collateralized loan obligations - 66,638 - 66,638 Loans held-for-sale - 5,206 - 5,206 Mortgage servicing rights - - 7,812 7,812 Interest rate swap agreements - 2,287 - 2,287 Mortgage banking derivatives - 261 - 261 Total $ 3,876 $ 527,302 $ 28,032 $ 559,210 Liabilities: Interest rate swap agreements $ - $ 2,287 $ - $ 2,287 Total $ - $ 2,287 $ - $ 2,287 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ 3,947 $ - $ - $ 3,947 U.S. government agencies - 13,061 - 13,061 U.S. government agencies mortgage-backed - 12,214 - 12,214 States and political subdivisions - 263,831 14,261 278,092 Corporate bonds - 833 - 833 Collateralized mortgage obligations - 63,671 2,268 65,939 Asset-backed securities - 112,932 - 112,932 Collateralized loan obligations - 54,421 - 54,421 Loans held-for-sale - 4,067 - 4,067 Mortgage servicing rights - - 6,944 6,944 Interest rate swap agreements - 727 - 727 Mortgage banking derivatives - 238 - 238 Total $ 3,947 $ 525,995 $ 23,473 $ 553,415 Liabilities: Interest rate swap agreements $ - $ 2,014 $ - $ 2,014 Total $ - $ 2,014 $ - $ 2,014
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis	Six Months Ended June 30, 2018 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2018 $ 2,268 $ 14,261 $ 6,944 Transfers into Level 3 - - - Transfers out of Level 3 - - - Total gains or losses Included in earnings (or changes in net assets) 26 - 520 Included in other comprehensive income 31 (551) - Purchases, issuances, sales, and settlements Purchases - 19,934 - Issuances - - 668 Settlements (554) (15,195) (320) Sales - - - Ending balance June 30, 2018 $ 1,771 $ 18,449 $ 7,812 Six Months Ended June 30, 2017 Securities available-for-sale Collateralized States and Mortgage Mortgage Political Servicing Obligation Subdivisions Rights Beginning balance January 1, 2017 $ 3,119 $ 22,226 $ 6,489 Transfers into Level 3 - - - Transfers out of Level 3 - - - Total gains or losses Included in earnings (or changes in net assets) 23 - (280) Included in other comprehensive income (1) (289) - Purchases, issuances, sales, and settlements Purchases - 10,456 - Issuances - - 601 Settlements (463) (12,045) (282) Sales - - - Ending balance June 30, 2017 $ 2,678 $ 20,348 $ 6,528
Schedule of quantitative information about level 3 fair value measurements	The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of June 30, 2018: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 7,812 Discounted Cash Flow Discount Rate 10.0 - 417.6% 10.2 % Prepayment Speed 7.0 - 68.4% 8.2 % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2017: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage servicing rights $ 6,944 Discounted Cash Flow Discount Rate 10.0 - 34.3% 10.2 % Prepayment Speed 7.0 - 68.4% 9.6 %
Schedule of assets measured at fair value on a nonrecurring basis	June 30, 2018 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 8,386 $ 8,386 Other real estate owned, net 2 - - 8,912 8,912 Total $ - $ - $ 17,298 $ 17,298 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 $8.9 million and a valuation allowance of $498,000 resulting in an increase of specific allocations within the allowance for loan and lease losses of $90,000 for the six months ended June 30, 2018. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $8.9 million, which is made up of the outstanding balance of $18.2 million, net of a valuation allowance of $8.3 million and participations of $937,000 at June 30, 2018. December 31, 2017 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ 5,113 $ 5,113 Other real estate owned, net 2 - - 8,371 8,371 Total $ - $ - $ 13,484 $ 13,484 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 $5.3 million and a valuation allowance of $144,000, resulting in an increase of specific allocations within the allowance for loan and lease losses of $856,000 for the year December 31, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $8.4 million, which is made up of the outstanding balance of $17.5 million, net of a valuation allowance of $8.2 million and participations of $937,000, at December 31, 2017.

Fair Values of Financial Inst35

Fair Values of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Values of Financial Instruments
Schedule of carrying amount and estimated fair values of financial instruments	June 30, 2018 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 34,161 $ 34,161 $ 34,161 $ - $ - Interest bearing deposits with financial institutions 31,147 31,147 31,147 - - Securities available-for-sale 543,644 543,644 3,876 519,548 20,220 FHLBC and FRBC Stock 9,093 9,093 - 9,093 - Loans held-for-sale 5,206 5,206 - 5,206 - Loans, net 1,829,841 1,816,393 - - 1,816,393 Accrued interest receivable 10,244 10,244 - 10,244 - Financial liabilities: Noninterest bearing deposits $ 620,807 $ 620,807 $ 620,807 $ - $ - Interest bearing deposits 1,541,044 1,534,109 - 1,534,109 - Securities sold under repurchase agreements 54,038 54,038 - 54,038 - Other short-term borrowings 76,625 76,625 - 76,625 - Junior subordinated debentures 57,662 59,471 33,267 26,204 - Senior notes 44,108 46,743 - 46,743 - Note payable and other borrowings 23,496 23,496 - 23,496 - Borrowing interest payable 192 192 - 192 - Deposit interest payable 800 800 - 800 - December 31, 2017 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 37,444 $ 37,444 $ 37,444 $ - $ - Interest bearing deposits with financial institutions 18,389 18,389 18,389 - - Securities available-for-sale 541,439 541,439 3,947 520,963 16,529 FHLBC and FRBC Stock 10,168 10,168 - 10,168 - Loans held-for-sale 4,067 4,067 - 4,067 - Loans, net 1,600,161 1,586,722 - - 1,586,722 Accrued interest receivable 8,595 8,595 - 8,595 - Financial liabilities: Noninterest bearing deposits $ 572,404 $ 572,404 $ 572,404 $ - $ - Interest bearing deposits 1,350,521 1,346,339 - 1,346,339 - Securities sold under repurchase agreements 29,918 29,918 - 29,918 - Other short-term borrowings 115,000 115,000 - 115,000 - Junior subordinated debentures 57,639 59,471 33,267 26,204 - Subordinated debenture 44,058 46,743 - 46,743 - Interest rate swap agreements 1,287 1,287 - 1,287 - Borrowing interest payable 140 140 - 140 - Deposit interest payable 631 631 - 631 -

Financial Instruments with Of36

Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions (Tables)	6 Months Ended
	Jun. 30, 2018
Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk
Schedule of fair value of derivative financial instruments as well as their classification on the Balance Sheet	Asset Derivatives Liability Derivatives June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Number of Transactions Notional Amount $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Balance Sheet Location Fair Value $ Derivatives designated as hedging instruments Interest Rate Products 1 25,774 Other Assets 507 Other Assets - Other Liabilities - Other Liabilities 1,287 Total derivatives designated as hedging instruments 507 - - 1,287 Derivatives not designated as hedging instruments Interest Rate Products 2 51,548 Other Assets 507 Other Assets - Other Liabilities 507 Other Liabilities 1,287 Other Contracts 3 15,857 Other Assets - Other Assets - Other Liabilities 5 Other Liabilities 13 Total derivatives not designated as hedging instruments 507 - 512 1,301
Schedule of financial instrument commitments	June 30, 2018 December 31, 2017 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ 2,017 $ 5,320 $ 7,337 $ 177 $ 3,770 $ 3,947 Commercial standby - 395 395 - 354 354 Performance standby 914 6,676 7,590 241 7,594 7,835 2,931 12,391 15,322 418 11,718 12,136 Non-borrower: Performance standby - 67 67 - 142 142 Total letters of credit $ 2,931 $ 12,458 $ 15,389 $ 418 $ 11,860 $ 12,278

Summary of Significant Accoun37

Summary of Significant Accounting Policies - Accounting Pronouncements (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018
Net interest income	$ 27,261,000	$ 21,800,000	$ 50,403,000	$ 42,416,000
Net income	$ 6,261,000	$ 5,146,000	$ 15,750,000	$ 9,573,000
Diluted earnings per share (in dollars per share)	$ 0.21	$ 0.17	$ 0.52	$ 0.32
Accounting Standards Update 2017-08 | Previously reported
Net interest income		$ 22,100,000		$ 42,900,000
Net income		$ 5,500,000		$ 10,000,000
Diluted earnings per share (in dollars per share)		$ 0.18		$ 0.33
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income (Loss)
Cumulative effect of new accounting principle					$ 319,000
Accounting Standards Update 2018-02 | Retained Earnings
Cumulative effect of new accounting principle					$ (319,000)

Summary of Significant Accoun38

Summary of Significant Accounting Policies - Dividend (Details) - USD ($)	Aug. 06, 2018	Jul. 17, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
Allowance for Loan Losses
Loans and Leases Receivable, Allowance			$ 19,321,000	$ 18,188,000	$ 17,461,000	$ 15,836,000	$ 15,741,000	$ 16,158,000
Subsequent Event
Allowance for Loan Losses
Dividends Payable, Amount Per Share		$ 0.01
Payments of Dividends	$ 297,000
All other
Allowance for Loan Losses
Loans and Leases Receivable, Allowance			$ 868,000	$ 870,000	$ 579,000	$ 546,000	$ 879,000	$ 451,000

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Apr. 20, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Acquisition price		$ 41,100
Subordinated debentures retired		6,600
Valuation adjustment, fixed assets	$ 1,500
GCFC/ABC Bank
Business Acquisition [Line Items]
Net cash paid		47,180
Goodwill	9,900		$ 9,900
Core deposit intangible	3,100		3,100
Valuation adjustment, loan valuation mark			11,200
Acquisition expenses	3,400		3,400
Total liabilities		289,790
Loans payable	23,500		23,500
Assets acquired:
Cash on due from banks		6,669
Interest bearing deposits with financial institutions		500
Securities available-for-sale, at fair value		72,091
Federal funds sold		4,300
FHLBC stock		1,549
Loans		227,594
Premises and equipment		5,339
Other real estate owned		432
Goodwill and core deposit intangible		12,957
Deferred tax assets, net		3,456
Other assets		2,083
Total assets		336,970
Liabilities assumed:
Deposits- noninterest bearing demand		58,005
Deposits- interest bearing - Savings, NOW, Moneymarket		91,494
Deposits - Time		98,999
Total deposits		248,498
Securities sold under repurchase agreements		5,624
Other short-term borrowings		10,875
Notes payable and other borrowings		23,544
Other liabilities		1,249
Total liabilities		289,790
Cash consideration paid		47,180
Total Liabilities Assumed and Cash Consideration Paid for Acquisition		$ 336,970
GCFC/ABC Bank | Salaries and Employee Benefits
Business Acquisition [Line Items]
Acquisition expenses	1,200		1,200
GCFC/ABC Bank | Data Processing, Computer and ATM
Business Acquisition [Line Items]
Acquisition expenses	$ 1,800		$ 1,800

Acquisition of Loans (Details)

Acquisition of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Apr. 20, 2018
Business Acquisition [Line Items]
Fair Value	$ 11,214
PCI | GCFC/ABC Bank
Business Acquisition [Line Items]
Fair Value	11,214	$ 11,360
Contractually required principal and interest payments	18,989	19,447
Best estimate of contractual cash flows not expected to be collected	6,402	6,537
Best estimate of contractual cash flows expected to be collected	12,587	12,910
Non-PCI | GCFC/ABC Bank
Business Acquisition [Line Items]
Fair Value	208,929	216,306
Contractually required principal and interest payments	211,341	219,488
Best estimate of contractual cash flows not expected to be collected	2,119	2,511
Best estimate of contractual cash flows expected to be collected	$ 209,222	$ 216,977

Securities - Investment Portfol

Securities - Investment Portfolio (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Dec. 31, 2017
Securities
Pretax realized losses on sale of available-for-sale securities	$ 202	$ 704
FHLB and FRB Stock
FHLBC stock			$ 4,300	$ 5,400
FRB stock			$ 4,800	$ 4,800

Securities - Amortized Cost and

Securities - Amortized Cost and Fair Value (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)item	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)item	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)
Securities Available-for-Sale
Amortized Cost	$ 550,396	$ 550,396	$ 550,396	$ 550,396	$ 537,645
Gross Unrealized Gains	2,955		2,955		8,467
Gross Unrealized Losses	(9,707)		(9,707)		(4,673)
Fair Value	543,644	543,644	543,644	543,644	541,439
Other disclosures
Purchases			54,550	205,755
Sales	$ 90,224	$ 36,468	$ 92,746	$ 100,856
Number of originators | item	3		3
Securities pledged to secure deposits and for other purposes	$ 311,400		$ 311,400		301,000
U.S. Treasury
Securities Available-for-Sale
Amortized Cost	4,004		4,004		4,002
Gross Unrealized Losses	(128)		(128)		(55)
Fair Value	3,876		3,876		3,947
U.S. government agencies
Securities Available-for-Sale
Amortized Cost	12,369		12,369		13,062
Gross Unrealized Gains					8
Gross Unrealized Losses	(153)		(153)		(9)
Fair Value	12,216		12,216		13,061
U.S. government agencies mortgage-backed
Securities Available-for-Sale
Amortized Cost					12,372
Gross Unrealized Gains					7
Gross Unrealized Losses					(165)
Fair Value					12,214
States and political subdivisions
Securities Available-for-Sale
Amortized Cost	279,007		279,007		272,240
Gross Unrealized Gains	1,640		1,640		7,116
Gross Unrealized Losses	(4,535)		(4,535)		(1,264)
Fair Value	276,112		276,112		278,092
Corporate bonds
Securities Available-for-Sale
Amortized Cost	685		685		823
Gross Unrealized Gains	21		21		21
Gross Unrealized Losses	(6)		(6)		(11)
Fair Value	700		700		833
Collateralized mortgage obligations
Securities Available-for-Sale
Amortized Cost	63,778		63,778		66,892
Gross Unrealized Gains	60		60		202
Gross Unrealized Losses	(2,406)		(2,406)		(1,155)
Fair Value	61,432		61,432		65,939
Asset-backed securities
Securities Available-for-Sale
Amortized Cost	110,053		110,053		113,983
Gross Unrealized Gains	1,011		1,011		862
Gross Unrealized Losses	(1,801)		(1,801)		(1,913)
Fair Value	109,263		109,263		112,932
FFEL
Other disclosures
Asset-backed securities	92,500		$ 92,500
Percentage of outstanding principal amount of loans guaranteed by US Department of Education			97
Total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal	10,900		$ 10,900
Percentage of total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal			11.44
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	66,489		$ 66,489		54,271
Gross Unrealized Gains	223		223		251
Gross Unrealized Losses	(74)		(74)		(101)
Fair Value	66,638		66,638		$ 54,421
U.S. government agency mortgage-backed
Securities Available-for-Sale
Amortized Cost	14,011		14,011
Gross Unrealized Losses	(604)		(604)
Fair Value	13,407		13,407
GCO Education Loan Funding Corp
Securities Available-for-Sale
Amortized Cost	27,685		27,685
Fair Value	26,754		26,754
Towd Point Mortgage Trust
Securities Available-for-Sale
Amortized Cost	28,966		28,966
Fair Value	28,080		$ 28,080
Towd Point Mortgage Trust | Stockholders' Equity
Other disclosures
Credit risk as a percentage of benchmark			10.00%
Student Marketing Association [Member]
Securities Available-for-Sale
Amortized Cost	25,780		$ 25,780
Fair Value	$ 26,176		$ 26,176
Stockholders' Equity | GCO Education Loan Funding Corp
Other disclosures
Credit risk as a percentage of benchmark			10.00%

Securities - Contractural Matur

Securities - Contractural Maturities (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2018	Dec. 31, 2017
Securities Available-for-Sale, Amortized Cost
Due in one year or less	$ 10,550
Due after one year through five years	4,689
Due after five years through ten years	5,343
Due after ten years	275,483
Debt securities excluding securities not due at a single maturity date	296,065
Total	$ 550,396	$ 550,396	$ 537,645
Securities Available-for-Sale, Weighted Average Yield
Due in one year or less (as a percent)	2.10%
Due after one year through five years (as a percent)	2.20%
Due after five years through ten years (as a percent)	3.27%
Due after ten years (as a percent)	2.98%
Debt securities (as a percent)	2.94%
Total (as a percent)	3.19%
Securities Available-for-Sale, Fair Value
Due in one year or less	$ 10,540
Due after one year through five years	4,576
Due after five years through ten years	5,413
Due after ten years	272,375
Debt securities	292,904
Fair Value	543,644	543,644	541,439
Collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Total		63,778	66,892
Securities Available-for-Sale, Fair Value
Fair Value		61,432	65,939
Asset-backed securities
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 110,053
Total		110,053	113,983
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	3.23%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 109,263
Fair Value		109,263	112,932
Collateralized loan obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 66,489
Total		66,489	54,271
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	4.34%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 66,638
Fair Value		$ 66,638	$ 54,421
Mortgage-backed and collateralized mortgage obligations
Securities Available-for-Sale, Amortized Cost
Securities not due at a single maturity date	$ 77,789
Securities Available-for-Sale, Weighted Average Yield
Securities not due at a single maturity date, Weighted Average Yield (as a percent)	3.11%
Securities Available-for-Sale, Fair Value
Securities not due at a single maturity date	$ 74,839

Securities - Unrealized Loss Po

Securities - Unrealized Loss Positions (Details) $ in Thousands	Jun. 30, 2018USD ($)security	Dec. 31, 2017USD ($)security
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	64	26
Greater than 12 months in an unrealized loss position | security	24	22
Total | security	88	48
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 4,425	$ 1,457
Greater than 12 months in an unrealized loss position	5,282	3,216
Total	9,707	4,673
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	212,683	102,830
Greater than 12 months in an unrealized loss position	110,793	108,651
Total	$ 323,476	$ 211,481
U.S. Treasury
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	1	1
Total | security	1	1
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 128	$ 55
Total	128	55
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	3,876	3,947
Total	$ 3,876	$ 3,947
U.S. government agencies
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	4	2
Total | security	4	2
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 153	$ 9
Total	153	9
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	12,216	6,550
Total	$ 12,216	$ 6,550
U.S. government agency mortgage-backed
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	7	4
Greater than 12 months in an unrealized loss position | security	5	5
Total | security	12	9
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 356	$ 24
Greater than 12 months in an unrealized loss position	248	141
Total	604	165
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	8,968	5,501
Greater than 12 months in an unrealized loss position	4,439	4,843
Total	$ 13,407	$ 10,344
States and political subdivisions
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	43	13
Greater than 12 months in an unrealized loss position | security	2	1
Total | security	45	14
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 3,264	$ 1,237
Greater than 12 months in an unrealized loss position	1,271	27
Total	4,535	1,264
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	141,455	45,985
Greater than 12 months in an unrealized loss position	3,849	1,512
Total	$ 145,304	$ 47,497
Corporate bonds
Securities Available-for-Sale, Number of Securities
Greater than 12 months in an unrealized loss position | security	1	1
Total | security	1	1
Securities Available-for-Sale, Unrealized Losses
Greater than 12 months in an unrealized loss position	$ 6	$ 11
Total	6	11
Securities Available-for-Sale, Fair Value
Greater than 12 months in an unrealized loss position	198	332
Total	$ 198	$ 332
Collateralized mortgage obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	3	3
Greater than 12 months in an unrealized loss position | security	9	8
Total | security	12	11
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 399	$ 31
Greater than 12 months in an unrealized loss position	2,007	1,124
Total	2,406	1,155
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	20,353	11,534
Greater than 12 months in an unrealized loss position	37,782	40,219
Total	$ 58,135	$ 51,753
Asset-backed securities
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	3
Greater than 12 months in an unrealized loss position | security	6	7
Total | security	9	7
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 65
Greater than 12 months in an unrealized loss position	1,736	$ 1,913
Total	1,801	1,913
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	8,451
Greater than 12 months in an unrealized loss position	56,539	61,745
Total	$ 64,990	$ 61,745
Collateralized loan obligations
Securities Available-for-Sale, Number of Securities
Less than 12 months in an unrealized loss position | security	3	3
Greater than 12 months in an unrealized loss position | security	1
Total | security	4	3
Securities Available-for-Sale, Unrealized Losses
Less than 12 months in an unrealized loss position	$ 60	$ 101
Greater than 12 months in an unrealized loss position	14
Total	74	101
Securities Available-for-Sale, Fair Value
Less than 12 months in an unrealized loss position	17,364	29,313
Greater than 12 months in an unrealized loss position	7,986
Total	$ 25,350	$ 29,313

Securities - Realized Gain (Los

Securities - Realized Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Securities
Sales	$ 90,224	$ 36,468	$ 92,746	$ 100,856
Gross realized gains on securities	312	71	347	437
Gross realized losses on securities		(202)		(704)
Securities (losses) gains, net	312	(131)	347	(267)
Income tax (expense) benefit on net realized gains (losses)	(88)	$ 52	(98)	$ 106
Available-for-sale Securities Pledged as Collateral	$ 311,400		$ 311,400		$ 301,000

Loans - Major Classifications (

Loans - Major Classifications (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Loans
Total loans, gross	$ 1,836,836	$ 1,616,942
Net deferred loan fees	1,112	680
PCI loans, net of purchase accounting adjustments	11,214
Total Loans	1,849,162	1,617,622	$ 1,539,647
Other
Loans
Total loans, gross	13,969	13,384
PCI
Loans
Total Loans	11,214
Non-PCI
Loans
Total Loans	1,837,948	1,617,622
Commercial
Loans
Total loans, gross	299,536	272,851
PCI loans, net of purchase accounting adjustments	2
Total Loans	299,536	272,851	256,760
Real estate - commercial
Loans
Total loans, gross	808,264	750,991
PCI loans, net of purchase accounting adjustments	4,146
Total Loans			706,103
Real estate - commercial | Construction Loans
Loans
Total loans, gross	115,486	85,162
PCI loans, net of purchase accounting adjustments	1,556
Total Loans			93,661
Real estate - residential
Loans
Total loans, gross	404,908	313,397
PCI loans, net of purchase accounting adjustments	5,509
Total Loans			282,118
Real estate - residential | Home Equity Line of Credit
Loans
Total Loans	127,986	112,833
Consumer
Loans
Total Loans			116,052
Consumer | Home Equity Line of Credit
Loans
Total loans, gross	127,986	112,833
Lease financing receivables
Loans
Total loans, gross	66,687	68,325
Total Loans	$ 66,687	$ 68,325	$ 70,138

Loans - Major Classifications -

Loans - Major Classifications - Loan Concentrations (Details) - Total real estate - Loan receivables - Customer concentration risk	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2018
Loans
Credit risk as a percentage of benchmark	78.00%
Loans receivable as a percentage of total portfolio		78.80%

Loans - Aging Analysis (Details

Loans - Aging Analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Aged analysis of past due loans
Total Past Due	$ 10,509	$ 5,606
Current	1,826,255	1,597,628
Nonaccrual	12,398	14,388
Total Loans	1,849,162	1,617,622	$ 1,539,647
Recorded Investment 90 days or Greater Past Due and Accruing	1,220	254
30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	8,868	4,212
60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	488	1,146
90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	1,153	248
PCI
Aged analysis of past due loans
Total Past Due	387
Current	7,850
Nonaccrual	2,977
Total Loans	11,214
PCI | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	387
Non-PCI
Aged analysis of past due loans
Total Past Due	10,122
Current	1,818,405
Nonaccrual	9,421
Total Loans	1,837,948	1,617,622
Recorded Investment 90 days or Greater Past Due and Accruing	1,220
Non-PCI | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	8,481
Non-PCI | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	488
Non-PCI | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	1,153
Multifamily
Aged analysis of past due loans
Total Past Due	232
Current	191,883	125,049
Nonaccrual		4,723
Total Loans	192,115	129,772
Multifamily | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	232
Commercial
Aged analysis of past due loans
Total Past Due	210	1,270
Current	299,326	271,581
Total Loans	299,536	272,851	256,760
Commercial | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	210	995
Commercial | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		275
Lease financing receivables
Aged analysis of past due loans
Current	66,687	68,147
Nonaccrual		178
Total Loans	66,687	68,325	70,138
Real estate - commercial
Aged analysis of past due loans
Total Loans			706,103
Real estate - commercial | Owner occupied general purpose
Aged analysis of past due loans
Total Past Due	1,353	1,136
Current	172,922	144,267
Nonaccrual	823	455
Total Loans	175,098	145,858
Recorded Investment 90 days or Greater Past Due and Accruing	477
Real estate - commercial | Owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	903	1,136
Real estate - commercial | Owner occupied general purpose | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	450
Real estate - commercial | Owner occupied special purpose
Aged analysis of past due loans
Total Past Due	1,981	226
Current	194,604	170,546
Nonaccrual	426	342
Total Loans	197,011	171,114
Real estate - commercial | Owner occupied special purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	1,981	226
Real estate - commercial | Non-owner occupied general purpose
Aged analysis of past due loans
Total Past Due	3,456	593
Current	279,599	273,203
Nonaccrual	39	1,163
Total Loans	283,094	274,959
Recorded Investment 90 days or Greater Past Due and Accruing	178
Real estate - commercial | Non-owner occupied general purpose | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	3,282
Real estate - commercial | Non-owner occupied general purpose | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due		593
Real estate - commercial | Non-owner occupied general purpose | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	174
Real estate - commercial | Non-owner occupied special purpose
Aged analysis of past due loans
Total Past Due		248
Current	87,704	92,923
Nonaccrual	3,099
Total Loans	90,803	93,171
Recorded Investment 90 days or Greater Past Due and Accruing		254
Real estate - commercial | Non-owner occupied special purpose | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due		248
Real estate - commercial | Retail properties
Aged analysis of past due loans
Current	47,582	49,538
Nonaccrual		1,081
Total Loans	47,582	50,619
Real estate - commercial | Farm
Aged analysis of past due loans
Current	14,676	15,270
Total Loans	14,676	15,270
Real estate - commercial | Construction Loans
Aged analysis of past due loans
Total Loans			93,661
Real estate - commercial | Construction Loans | Homebuilder
Aged analysis of past due loans
Total Past Due		129
Current	7,649	2,221
Total Loans	7,649	2,350
Real estate - commercial | Construction Loans | Homebuilder | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		129
Real estate - commercial | Construction Loans | Land
Aged analysis of past due loans
Total Past Due		1,124
Current	9,168	1,319
Total Loans	9,168	2,443
Real estate - commercial | Construction Loans | Land | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due		1,124
Real estate - commercial | Construction Loans | Commercial speculative
Aged analysis of past due loans
Current	39,730	32,028
Total Loans	39,730	32,028
Real estate - commercial | Construction Loans | All other
Aged analysis of past due loans
Total Past Due	501
Current	58,245	48,140
Nonaccrual	193	201
Total Loans	58,939	48,341
Recorded Investment 90 days or Greater Past Due and Accruing	475
Real estate - commercial | Construction Loans | All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	59
Real estate - commercial | Construction Loans | All other | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	442
Real estate - residential
Aged analysis of past due loans
Total Loans			282,118
Real estate - residential | Investor
Aged analysis of past due loans
Total Past Due	612
Current	72,896	55,248
Nonaccrual	371	372
Total Loans	73,879	55,620
Recorded Investment 90 days or Greater Past Due and Accruing	40
Real estate - residential | Investor | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	466
Real estate - residential | Investor | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	108
Real estate - residential | Investor | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	38
Real estate - residential | Owner occupied
Aged analysis of past due loans
Total Past Due	918	74
Current	134,265	123,257
Nonaccrual	3,731	4,674
Total Loans	138,914	128,005
Real estate - residential | Owner occupied | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	710	74
Real estate - residential | Owner occupied | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	208
Real estate - residential | Home Equity Line of Credit
Aged analysis of past due loans
Total Past Due	820	769
Current	126,443	110,872
Nonaccrual	723	1,192
Total Loans	127,986	112,833
Recorded Investment 90 days or Greater Past Due and Accruing	50
Real estate - residential | Home Equity Line of Credit | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	599	491
Real estate - residential | Home Equity Line of Credit | 60 to 89 Days Past Due
Aged analysis of past due loans
Total Past Due	172	278
Real estate - residential | Home Equity Line of Credit | 90 Days or Greater Past Due
Aged analysis of past due loans
Total Past Due	49
Consumer
Aged analysis of past due loans
Total Loans			116,052
All other
Aged analysis of past due loans
Total Past Due	39	37
Current	15,026	14,019
Nonaccrual	16	7
Total Loans	15,081	14,063	$ 14,815
All other | 30 to 59 Days Past Due
Aged analysis of past due loans
Total Past Due	$ 39	$ 37

Loans - Inclusion (Details)

Loans - Inclusion (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
Minimum
Loans by risk rating
Loan commitment for inclusion in credit quality analysis	$ 50,000

Loans - Credit Quality (Details

Loans - Credit Quality (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Loans by risk rating
Total Loans	$ 1,849,162	$ 1,617,622	$ 1,539,647
Multifamily
Loans by risk rating
Total Loans	192,115	129,772
Commercial
Loans by risk rating
Total Loans	299,536	272,851	256,760
Lease financing receivables
Loans by risk rating
Total Loans	66,687	68,325	70,138
Real estate - commercial
Loans by risk rating
Total Loans			706,103
Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	175,098	145,858
Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	197,011	171,114
Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	283,094	274,959
Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	90,803	93,171
Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	47,582	50,619
Real estate - commercial | Farm
Loans by risk rating
Total Loans	14,676	15,270
Real estate - residential
Loans by risk rating
Total Loans			282,118
Real estate - residential | Investor
Loans by risk rating
Total Loans	73,879	55,620
Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	138,914	128,005
Consumer
Loans by risk rating
Total Loans			116,052
All other
Loans by risk rating
Total Loans	15,081	14,063	14,815
Pass
Loans by risk rating
Total Loans	1,798,709	1,583,352
Pass | Multifamily
Loans by risk rating
Total Loans	188,813	125,049
Pass | Commercial
Loans by risk rating
Total Loans	298,512	270,889
Pass | Lease financing receivables
Loans by risk rating
Total Loans	66,148	67,500
Pass | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	166,962	142,843
Pass | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	195,009	169,621
Pass | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	275,728	271,731
Pass | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	87,704	89,582
Pass | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	45,755	48,321
Pass | Real estate - commercial | Farm
Loans by risk rating
Total Loans	13,428	11,755
Pass | Real estate - residential | Investor
Loans by risk rating
Total Loans	72,759	55,172
Pass | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	133,485	122,178
Pass | All other
Loans by risk rating
Total Loans	15,063	14,043
Special Mention
Loans by risk rating
Total Loans	12,921	10,965
Special Mention | Commercial
Loans by risk rating
Total Loans	631	1,962
Special Mention | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	4,915	1,927
Special Mention | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	254	1,152
Special Mention | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	4,899	2,065
Special Mention | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans		1,217
Special Mention | Real estate - commercial | Farm
Loans by risk rating
Total Loans		1,029
Special Mention | Real estate - residential | Investor
Loans by risk rating
Total Loans	91
Special Mention | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	1	561
Substandard
Loans by risk rating
Total Loans	37,532	23,305
Substandard | Multifamily
Loans by risk rating
Total Loans	3,302	4,723
Substandard | Commercial
Loans by risk rating
Total Loans	393
Substandard | Lease financing receivables
Loans by risk rating
Total Loans	539	825
Substandard | Real estate - commercial | Owner occupied general purpose
Loans by risk rating
Total Loans	3,221	1,088
Substandard | Real estate - commercial | Owner occupied special purpose
Loans by risk rating
Total Loans	1,748	341
Substandard | Real estate - commercial | Non-owner occupied general purpose
Loans by risk rating
Total Loans	2,467	1,163
Substandard | Real estate - commercial | Non-owner occupied special purpose
Loans by risk rating
Total Loans	3,099	3,589
Substandard | Real estate - commercial | Retail properties
Loans by risk rating
Total Loans	1,827	1,081
Substandard | Real estate - commercial | Farm
Loans by risk rating
Total Loans	1,248	2,486
Substandard | Real estate - residential | Investor
Loans by risk rating
Total Loans	1,029	448
Substandard | Real estate - residential | Owner occupied
Loans by risk rating
Total Loans	5,428	5,266
Substandard | All other
Loans by risk rating
Total Loans	18	20
PCI
Loans by risk rating
Total Loans	11,214
PCI | Substandard
Loans by risk rating
Total Loans	11,214
Non-PCI
Loans by risk rating
Total Loans	1,837,948	1,617,622
Non-PCI | Pass
Loans by risk rating
Total Loans	1,798,709
Non-PCI | Special Mention
Loans by risk rating
Total Loans	12,921
Non-PCI | Substandard
Loans by risk rating
Total Loans	26,318
Construction Loans | Real estate - commercial
Loans by risk rating
Total Loans			$ 93,661
Construction Loans | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	7,649	2,350
Construction Loans | Real estate - commercial | Land
Loans by risk rating
Total Loans	9,168	2,443
Construction Loans | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	39,730	32,028
Construction Loans | Real estate - commercial | All other
Loans by risk rating
Total Loans	58,939	48,341
Construction Loans | Pass | Real estate - commercial | Homebuilder
Loans by risk rating
Total Loans	7,649	2,350
Construction Loans | Pass | Real estate - commercial | Land
Loans by risk rating
Total Loans	9,168	2,443
Construction Loans | Pass | Real estate - commercial | Commercial speculative
Loans by risk rating
Total Loans	39,730	32,028
Construction Loans | Pass | Real estate - commercial | All other
Loans by risk rating
Total Loans	56,443	46,913
Construction Loans | Special Mention | Real estate - commercial | All other
Loans by risk rating
Total Loans	2,130	1,052
Construction Loans | Substandard | Real estate - commercial | All other
Loans by risk rating
Total Loans	366	376
Home Equity Line of Credit | Real estate - residential
Loans by risk rating
Total Loans	127,986	112,833
Home Equity Line of Credit | Pass | Real estate - residential
Loans by risk rating
Total Loans	126,353	110,934
Home Equity Line of Credit | Substandard | Real estate - residential
Loans by risk rating
Total Loans	$ 1,633	$ 1,899

Loans - Repossessed Assets (Det

Loans - Repossessed Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
Repossessed and foreclosed assets
Other real estate owned	$ 8,912	$ 7,063	$ 8,371	$ 11,724	$ 13,481	$ 11,916
Real estate - residential
Repossessed and foreclosed assets
Mortgage loans in process of foreclosure	$ 942,000,000		$ 1,300

Loans - Impaired Loans - Record

Loans - Impaired Loans - Recorded Investment, Unpaid Principal Balance and Related Allowance (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Recorded Investment
With no related allowance recorded	$ 6,941	$ 14,855
With an allowance recorded	8,884	5,257
Total impaired loans	15,825	20,112
Unpaid Principal Balance
With no related allowance recorded	8,951	17,792
With an allowance recorded	9,360	5,257
Total impaired loans	18,311	23,049
Related Allowance
With an allowance recorded	498	144
Lease financing receivables
Recorded Investment
With no related allowance recorded		178
Unpaid Principal Balance
With no related allowance recorded		213
Real estate - commercial | Owner occupied general purpose
Recorded Investment
With no related allowance recorded	911	455
Unpaid Principal Balance
With no related allowance recorded	985	495
Real estate - commercial | Owner occupied special purpose
Recorded Investment
With no related allowance recorded	426	342
Unpaid Principal Balance
With no related allowance recorded	546	498
Real estate - commercial | Non-owner occupied general purpose
Recorded Investment
With no related allowance recorded	39	1,163
Unpaid Principal Balance
With no related allowance recorded	81	1,538
Real estate - commercial | Non-owner occupied special purpose
Recorded Investment
With an allowance recorded	3,099
Unpaid Principal Balance
With an allowance recorded	3,575
Related Allowance
With an allowance recorded	419
Real estate - commercial | Retail properties
Recorded Investment
With no related allowance recorded		1,081
Unpaid Principal Balance
With no related allowance recorded		1,177
Real estate - residential | Investor
Recorded Investment
With no related allowance recorded	371	372
With an allowance recorded	815	829
Unpaid Principal Balance
With no related allowance recorded	468	676
With an allowance recorded	815	829
Related Allowance
With an allowance recorded	10	10
Real estate - residential | Multifamily
Recorded Investment
With no related allowance recorded		4,723
Unpaid Principal Balance
With no related allowance recorded		4,965
Real estate - residential | Owner occupied
Recorded Investment
With no related allowance recorded	4,244	5,208
With an allowance recorded	3,646	3,443
Unpaid Principal Balance
With no related allowance recorded	5,769	6,680
With an allowance recorded	3,646	3,443
Related Allowance
With an allowance recorded	45	43
Real estate - residential | Revolving and junior liens
Recorded Investment
With no related allowance recorded	741	1,125
With an allowance recorded	1,321	985
Unpaid Principal Balance
With no related allowance recorded	860	1,313
With an allowance recorded	1,321	985
Related Allowance
With an allowance recorded	24	91
Consumer
Recorded Investment
With no related allowance recorded	16	7
With an allowance recorded	3
Unpaid Principal Balance
With no related allowance recorded	16	8
With an allowance recorded	3
Construction Loans | Real estate - commercial | All other
Recorded Investment
With no related allowance recorded	193	201
Unpaid Principal Balance
With no related allowance recorded	$ 226	$ 229

Loans - Impaired Loans - Averag

Loans - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2018
Average Recorded Investment
With no related allowance recorded	$ 20,798	$ 10,898
With an allowance recorded	645	7,071
Total impaired loans	21,443	17,969
Interest Income Recognized
With no related allowance recorded	101	22
With an allowance recorded		119
Total impaired loans	101	141
Commercial
Average Recorded Investment
With no related allowance recorded	128
Lease financing receivables
Average Recorded Investment
With no related allowance recorded	293	89
Real estate - commercial | Owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,170	683
Interest Income Recognized
With no related allowance recorded		3
Real estate - commercial | Owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	376	384
Real estate - commercial | Non-owner occupied general purpose
Average Recorded Investment
With no related allowance recorded	1,443	601
With an allowance recorded	123
Interest Income Recognized
With no related allowance recorded	1
Real estate - commercial | Non-owner occupied special purpose
Average Recorded Investment
With no related allowance recorded	507
With an allowance recorded		1,550
Real estate - commercial | Retail properties
Average Recorded Investment
With no related allowance recorded	1,161	541
Real estate - residential | Investor
Average Recorded Investment
With no related allowance recorded	1,708	371
With an allowance recorded		822
Interest Income Recognized
With no related allowance recorded	20
With an allowance recorded		22
Real estate - residential | Multifamily
Average Recorded Investment
With no related allowance recorded	2,412	2,362
Real estate - residential | Owner occupied
Average Recorded Investment
With no related allowance recorded	9,016	4,726
With an allowance recorded	402	3,544
Interest Income Recognized
With no related allowance recorded	65	18
With an allowance recorded		73
Real estate - residential | Revolving and junior liens
Average Recorded Investment
With no related allowance recorded	2,227	933
With an allowance recorded		1,153
Interest Income Recognized
With no related allowance recorded	15	1
With an allowance recorded		24
Consumer
Average Recorded Investment
With no related allowance recorded	105	11
With an allowance recorded		2
Construction Loans | Real estate - commercial | Commercial speculative
Average Recorded Investment
With no related allowance recorded	72
Construction Loans | Real estate - commercial | All other
Average Recorded Investment
With no related allowance recorded	$ 180	$ 197

Loans - TDR (Details)

Loans - TDR (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)contract	Jun. 30, 2017USD ($)contract	Jun. 30, 2018USD ($)contract	Jun. 30, 2017USD ($)contract	Dec. 31, 2017USD ($)
Troubled debt restructurings - modified during the period
# of contracts | contract	5		10
Pre-modification recorded investment	$ 464,000	$ 155,000	$ 706,000	$ 399,000
Post-modification recorded investment	382,000	$ 147,000	622,000	$ 388,000
TDR's defaulted
# of contracts | contract		2		6
Pre-modification outstanding recorded investment during the period			0	$ 0
Other information
Total Past Due	$ 10,509,000		$ 10,509,000		$ 5,606,000
Real estate - commercial
Troubled debt restructurings - modified during the period
# of contracts | contract	1		1
Pre-modification recorded investment	$ 110,000		$ 110,000
Post-modification recorded investment	56,000		56,000
Real estate - commercial | Owner occupied special purpose
Other information
Total Past Due	1,981,000		1,981,000		226,000
Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	1,353,000		1,353,000		1,136,000
Real estate - commercial | Non-owner occupied general purpose
Other information
Total Past Due	$ 3,456,000		$ 3,456,000		593,000
Real estate - residential | HAMP
Troubled debt restructurings - modified during the period
# of contracts | contract	1		1
Pre-modification recorded investment	$ 49,000		$ 49,000
Post-modification recorded investment	39,000		$ 39,000
Real estate - residential | Interest Rate Concession Below Normal Market [Member]
Troubled debt restructurings - modified during the period
# of contracts | contract			1
Pre-modification recorded investment			$ 24,000
Post-modification recorded investment			24,000
Real estate - residential | Investor
Other information
Total Past Due	612,000		612,000
Real estate - residential | Owner occupied
Other information
Total Past Due	$ 918,000		$ 918,000		74,000
Real estate - residential | Revolving and junior liens | Other
Troubled debt restructurings - modified during the period
# of contracts | contract	3		7
Pre-modification recorded investment	$ 305,000	$ 155,000	$ 523,000	399,000
Post-modification recorded investment	287,000	$ 147,000	503,000	$ 388,000
TDR's defaulted
# of contracts | contract		2		6
Commercial
Other information
Total Past Due	210,000		210,000		1,270,000
90 Days or Greater Past Due
Other information
Total Past Due	1,153,000		1,153,000		$ 248,000
90 Days or Greater Past Due | Real estate - commercial | Owner occupied general purpose
Other information
Total Past Due	450,000		450,000
90 Days or Greater Past Due | Real estate - commercial | Non-owner occupied general purpose
Other information
Total Past Due	174,000		174,000
90 Days or Greater Past Due | Real estate - residential | Investor
Other information
Total Past Due	$ 38,000		$ 38,000

Loans - Accretable Discount on

Loans - Accretable Discount on Purchased Loans (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2018USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance	$ 694
Purchases	11,269
Accretion	(1,057)
Transfers	(135)
Ending balance	10,771
PCI
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Purchases	1,551
Purchases	6,536
Accretion	(176)
Transfers	(2)
Transfers	(133)
Ending balance	1,373
Ending balance	6,403
Non-PCI
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance	694
Purchases	3,182
Accretion	(881)
Ending balance	$ 2,995

Allowance for Loan Losses (Deta

Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Allowance for loan losses:
Beginning Balance	$ 18,188	$ 15,741	$ 17,461	$ 16,158
Charge-offs	699	1,066	674	1,757
Recoveries	382	411	1,806	685
Provision (release)	1,450	750	728	750
Ending Balance	19,321	15,836	19,321	15,836
Ending balance: Individually evaluated for impairment	498	98	498	98
Ending balance: Collectively evaluated for impairment	18,823	15,738	18,823	15,738
Loans:
Ending balance	1,849,162	1,539,647	1,849,162	1,539,647	$ 1,617,622
Ending balance	1,849,162		1,849,162
Ending balance: Individually evaluated for impairment	15,825	20,598	15,825	20,598
Ending balance: Collectively evaluated for impairment	1,822,123	1,519,049	1,822,123	1,519,049
Ending balance: Acquired and accounted for ASC 310-30	11,214		11,214
Commercial
Allowance for loan losses:
Beginning Balance	2,604	1,672	2,453	1,629
Charge-offs	15	6	31	7
Recoveries	92	5	109	7
Provision (release)	(5)	479	145	521
Ending Balance	2,676	2,150	2,676	2,150
Ending balance: Collectively evaluated for impairment	2,676	2,150	2,676	2,150
Loans:
Ending balance	299,536	256,760	299,536	256,760	272,851
Ending balance	299,538		299,538
Ending balance: Individually evaluated for impairment		216		216
Ending balance: Collectively evaluated for impairment	299,536	256,544	299,536	256,544
Ending balance: Acquired and accounted for ASC 310-30	2		2
Lease financing receivables
Allowance for loan losses:
Beginning Balance	617	603	692	633
Charge-offs	8		13	117
Provision (release)	25	188	(45)	275
Ending Balance	634	791	634	791
Ending balance: Individually evaluated for impairment		98		98
Ending balance: Collectively evaluated for impairment	634	693	634	693
Loans:
Ending balance	66,687	70,138	66,687	70,138	68,325
Ending balance	66,687		66,687
Ending balance: Individually evaluated for impairment		460		460
Ending balance: Collectively evaluated for impairment	66,687	69,678	66,687	69,678
Real estate - commercial
Allowance for loan losses:
Beginning Balance	9,565	7,831	9,522	9,547
Charge-offs	504	4	408	278
Recoveries	21	46	388	81
Provision (release)	1,455	234	1,035	(1,243)
Ending Balance	10,537	8,107	10,537	8,107
Ending balance: Individually evaluated for impairment	419		419
Ending balance: Collectively evaluated for impairment	10,118	8,107	10,118	8,107
Loans:
Ending balance		706,103		706,103
Ending balance	812,410		812,410
Ending balance: Individually evaluated for impairment	4,475	3,113	4,475	3,113
Ending balance: Collectively evaluated for impairment	803,789	702,990	803,789	702,990
Ending balance: Acquired and accounted for ASC 310-30	4,146		4,146
Real estate - residential
Allowance for loan losses:
Beginning Balance	1,854	2,438	1,846	2,178
Charge-offs	5	946	(55)	977
Recoveries	105	110	1,016	153
Provision (release)	(136)	270	(1,099)	518
Ending Balance	1,818	1,872	1,818	1,872
Ending balance: Individually evaluated for impairment	55		55
Ending balance: Collectively evaluated for impairment	1,763	1,872	1,763	1,872
Loans:
Ending balance		282,118		282,118
Ending balance	410,417		410,417
Ending balance: Individually evaluated for impairment	11,138	14,609	11,138	14,609
Ending balance: Collectively evaluated for impairment	393,770	267,509	393,770	267,509
Ending balance: Acquired and accounted for ASC 310-30	5,509		5,509
Consumer
Allowance for loan losses:
Beginning Balance	1,535	1,340	1,446	1,331
Charge-offs	65	30	92	194
Recoveries	91	139	138	238
Provision (release)	(171)	64	(102)	138
Ending Balance	1,390	1,513	1,390	1,513
Ending balance: Individually evaluated for impairment	24		24
Ending balance: Collectively evaluated for impairment	1,366	1,513	1,366	1,513
Loans:
Ending balance		116,052		116,052
Ending balance	127,986		127,986
Ending balance: Individually evaluated for impairment		1,971		1,971
Ending balance: Collectively evaluated for impairment	127,986	114,081	127,986	114,081
All other
Allowance for loan losses:
Beginning Balance	870	879	579	451
Charge-offs	102	80	201	180
Recoveries	73	51	152	128
Provision (release)	27	(304)	338	147
Ending Balance	868	546	868	546
Ending balance: Collectively evaluated for impairment	868	546	868	546
Loans:
Ending balance	15,081	14,815	15,081	14,815	$ 14,063
Ending balance	15,082		15,082
Ending balance: Individually evaluated for impairment	19	9	19	9
Ending balance: Collectively evaluated for impairment	15,062	14,806	15,062	14,806
Ending balance: Acquired and accounted for ASC 310-30	1		1
Construction Loans | Real estate - commercial
Allowance for loan losses:
Beginning Balance	1,143	978	923	389
Charge-offs			(16)	4
Recoveries		60	3	78
Provision (release)	255	(181)	456	394
Ending Balance	1,398	857	1,398	857
Ending balance: Collectively evaluated for impairment	1,398	857	1,398	857
Loans:
Ending balance		93,661		93,661
Ending balance	117,042		117,042
Ending balance: Individually evaluated for impairment	193	220	193	220
Ending balance: Collectively evaluated for impairment	115,293	$ 93,441	115,293	$ 93,441
Ending balance: Acquired and accounted for ASC 310-30	$ 1,556		$ 1,556

Other Real Estate Owned (Detail

Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Activity in the other real estate owned (OREO) portfolio, net of valuation reserve
Balance at beginning of period	$ 7,063	$ 13,481	$ 8,371	$ 11,916
Property additions	2,812	204	2,812	3,620
Property improvements			59
Less: Property disposals, net of gains/losses	709	1,569	1,964	3,102
Less: Period valuation adjustments	254	392	366	710
Balance at end of period	8,912	11,724	8,912	11,724
Activity in the valuation allowance
Balance at beginning of period	8,099	9,659	8,208	9,982
Provision for unrealized losses	254	392	366	710
Reductions taken on sales	(5)	(1,747)	(226)	(2,388)
Balance at end of period	8,348	8,304	8,348	8,304
Expenses related to foreclosed assets, net of lease revenue
Gain on sales, net	(24)	(104)	(104)	(178)
Provision for unrealized losses	254	392	366	710
Operating expenses	213	293	369	816
Less: Lease revenue	14	42	29	100
Expenses related to OREO, net of lease revenue	$ 429	$ 539	$ 602	$ 1,248

Deposits - Components and Matur

Deposits - Components and Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Deposits
Noninterest bearing demand	$ 620,807	$ 572,404
Savings	301,832	262,220
NOW accounts	435,514	429,448
Money market accounts	320,949	276,082
Certificates of deposit of less than $100,000	249,049	216,493
Certificates of deposit of $100,000 up to $250,000	175,174	122,489
Certificates of deposit of $250,000 or more	58,526	43,789
Total deposits	$ 2,161,851	$ 1,922,925

Borrowings - Summary (Details)

Borrowings - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Borrowings
Senior Notes	$ 44,108	$ 44,058
Total borrowings	255,929	246,615
Securities sold under repurchase agreements
Borrowings
Total borrowings	54,038	29,918
FHLBC advances
Borrowings
Total borrowings	76,625	115,000
Junior subordinated debentures
Borrowings
Total borrowings	57,662	57,639
Senior Notes.
Borrowings
Senior Notes	44,108	$ 44,058
Notes payable and other borrowings
Borrowings
Total borrowings	$ 23,496

Borrowings - Additional informa

Borrowings - Additional information (Details)	3 Months Ended	6 Months Ended
	Dec. 31, 2016	Jun. 30, 2018USD ($)item	Apr. 20, 2018USD ($)	Dec. 31, 2017USD ($)
Borrowings
Interest rate (as a percent)	5.75%
Bank owned FHLBC stock		$ 4,300,000		$ 5,400,000
Subordinated Debt.			$ 6,600,000
Senior notes		44,108,000		44,058,000
Debt Instrument, Term	10 years
Interest rate term	5 years
Total borrowings		$ 255,929,000		246,615,000
GCFC/ABC Bank
Borrowings
Debt Instrument, Term		7 years 9 months
Debt assumed		$ 23,500,000
GCFC/ABC Bank | Minimum
Borrowings
Interest rate (as a percent)		1.40%
GCFC/ABC Bank | Maximum
Borrowings
Interest rate (as a percent)		2.83%
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		$ 54,000,000		29,900,000
Fair value of the pledged collateral		$ 73,900,000		40,000,000
Number of customers having secured balances exceeding specified percentage of stockholders equity | item		1
Total borrowings		$ 54,038,000		29,918,000
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		$ 72,600,000		115,000,000
Bank owned FHLBC stock		4,300,000
Fair value of securities collateralized		76,700,000
Principal balance of loans collateralized		296,300,000
Combined collateral value		295,500,000
Amount available for additional borrowings		150,100,000
Total borrowings		$ 76,625,000		115,000,000
FHLB advances at 2.01 %
Borrowings
Interest rate (as a percent)		2.01%
FHLBC advance amount		$ 70,000,000
FHLB advances at 1.40 %
Borrowings
Interest rate (as a percent)		1.40%
FHLBC advance amount		$ 2,600,000
Notes payable and other borrowings
Borrowings
Total borrowings		$ 23,496,000
Correspondent Bank
Borrowings
Interest rate (as a percent)		3.73%
Maximum borrowing capacity		$ 20,000,000
Debt Instrument, Term		360 days
Short-term debt		$ 4,000,000
Junior subordinated debentures
Borrowings
Total borrowings		57,662,000		57,639,000
Senior Notes.
Borrowings
Senior notes		44,108,000		44,058,000
Debt issuance costs		$ 892,000		$ 942,000
Amortization period for deferred financing costs		10 years

Junior Subordinated Debentures

Junior Subordinated Debentures - Issuance (Details) - USD ($) $ in Thousands	1 Months Ended				6 Months Ended
	Jun. 30, 2017	Apr. 30, 2007	Jul. 31, 2003	Jun. 30, 2003	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Junior subordinated debentures
Junior subordinated debentures					$ 57,662		$ 57,639
Old Second Capital Trust I
Junior subordinated debentures
Proceeds from sale of cumulative trust preferred securities			$ 4,100	$ 27,500
Maturity Period					30 years
Cash distribution rate of trust preferred securities (as a percent)					7.80%
Old Second Capital Trust II
Junior subordinated debentures
Proceeds from sale of cumulative trust preferred securities		$ 25,000
Maturity Period					30 years
Old Second Capital Trust II | Debt Instrument, Redemption, Period One [Member]
Junior subordinated debentures
Cash distribution rate of trust preferred securities (as a percent)	4.34%
Cash distribution fixed rate of trust preferred securities (as a percent)					6.77%
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member]
Junior subordinated debentures
Basis points added to cash distribution floating rate base (as a percent)					1.50%
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member] | Three month LIBOR
Junior subordinated debentures
Cash distribution, floating rate base					three-month LIBOR
Junior subordinated debentures
Junior subordinated debentures
Junior Subordinated Debentures issuance cost						$ 716	$ 739
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 ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Total compensation cost	$ 1.1	$ 645,000
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
Shares
Beginning outstanding (in shares)	9,000
Ending outstanding (in shares)	9,000
Ending outstanding (in dollars)	$ 64,000
Exercisable at the end of the period (in dollars)	$ 64,000
Exercisable at end of period (in shares)	9,000
Weighted Average Exercise Price
Beginning outstanding (in dollars per share)	$ 7.49
Ending outstanding (in dollars per share)	7.49
Exercisable at end of period (in dollars per share)	$ 7.49
Weighted Average Remaining Contractual Term (years)
Ending outstanding (in years)	7 months 6 days
Exercisable at end of period	7 months 6 days

Equity Compensation Plans - Sum

Equity Compensation Plans - Summary of stock option activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 01, 2016	May 31, 2016	May 20, 2014
Equity Compensation Plans
Stock based compensation	$ 1,098	$ 625
2014 Plan
Equity Compensation Plans
Number of shares authorized			975,000	600,000	375,000
Number of shares issuable	169,791

Equity Compensation Plans - Res

Equity Compensation Plans - Restricted Stock and RSUs (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Equity Compensation Plans
Vesting period		3 years
Changes in unvested awards
Nonvested at the beginning of the period (in shares)		465,000
Granted (in shares)	170,000	254,281	170,000
Vested (in shares)		(155,500)
Nonvested at the end of the period (in shares)		563,781
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)		$ 7.79
Granted (in dollars per share)		13.98
Vested (in dollars per share)		5.14
Nonvested at the end of the period (in dollars per share)		$ 11.31
Additional information
Total unrecognized compensation cost of restricted awards		$ 4.1
Expected weighted-average period for recognition of unrecognized compensation		2 years 2 months 19 days

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended					6 Months Ended		12 Months Ended	18 Months Ended
	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2009	Jun. 30, 2018
Basic earnings per share:
Weighted-average common shares outstanding	29,747,078		29,587,095			29,703,508	29,573,881
Net income	$ 6,261		$ 5,146			$ 15,750	$ 9,573
Net income available to common stockholders	$ 6,261		$ 5,146			$ 15,750	$ 9,573
Basic earnings per share (in dollars per share)	$ 0.21		$ 0.17			$ 0.53	$ 0.32
Diluted earnings per share:
Weighted-average common shares outstanding	29,747,078		29,587,095			29,703,508	29,573,881
Diluted average common shares outstanding	30,337,282		30,015,905			30,253,440	29,976,544
Net earnings available to common stockholders	$ 6,261		$ 5,146			$ 15,750	$ 9,573
Diluted earnings per share (in dollars per share)	$ 0.21		$ 0.17			$ 0.52	$ 0.32
Warrants, exercise price (in dollars per share)	13.43					$ 13.43			$ 13.43
Warrant term				10 years
Antidilutive options and warrants
Diluted earnings per share:
One 10 year warrant			900,839				900,839
Warrants
Diluted earnings per share:
One 10 year warrant						815,339	815,339
Warrants, exercise price (in dollars per share)	$ 13.43		$ 13.43			$ 13.43	$ 13.43		$ 13.43
Warrant term		10 years			10 years			10 years	10 years
Restricted stock and restricted stock units
Diluted earnings per share:
Dilutive effect of share-based payment awards (in shares)	539,166		426,264			506,234	400,232
Stock options
Diluted earnings per share:
Dilutive effect of share-based payment awards (in shares)	51,038		2,546			43,698	2,431

Regulatory & Capital Matters (D

Regulatory & Capital Matters (Details)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	9.37%	10.08%
Risk-based capital ratio (as a percent)	11.87%	12.93%
Old Second National Bank
Regulatory & Capital Matters
Tier 1 capital leverage ratio (as a percent)	10.75%	10.79%
Risk-based capital ratio (as a percent)	13.51%	13.78%
Tier One leverage ratio, basis point increase (as a percent)	0.04%
Risk-based capital ratio, basis point decrease (as a percent)	0.27%
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	Jun. 30, 2018	Dec. 31, 2017
Common equity tier 1 capital to risk weighted assets
Actual	$ 185,044	$ 179,853
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 138,946	$ 111,801
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	8.49%	9.25%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	6.375%	5.75%
Total capital to risk weighted assets, Amount
Actual at period end	$ 258,854	$ 251,383
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 215,348	$ 179,837
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	11.87%	12.93%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	9.875%	9.25%
Tier 1 capital to risk weighted assets, Amount
Actual	$ 239,538	$ 233,927
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 171,643	$ 140,978
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	10.99%	12.03%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	7.875%	7.25%
Tier 1 capital to average assets, Amount
Actual	$ 239,538	$ 233,927
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	$ 102,257	$ 92,828
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	9.37%	10.08%
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	$ 273,950	$ 249,417
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	138,386	111,347
Minimum Required to Be Well Capitalized	$ 141,099	$ 125,870
Common equity tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.62%	12.88%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	6.375%	5.75%
Minimum Required to Be Well Capitalized (as a percent)	6.50%	6.50%
Total capital to risk weighted assets, Amount
Actual at period end	$ 293,266	$ 266,873
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	214,360	179,142
Minimum Required to Be Well Capitalized	$ 217,073	$ 193,667
Total capital to risk weighted assets, Ratio
Risk-based capital ratio (as a percent)	13.51%	13.78%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	9.875%	9.25%
Minimum Required to Be Well Capitalized (as a percent)	10.00%	10.00%
Tier 1 capital to risk weighted assets, Amount
Actual	$ 273,950	$ 249,417
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	170,947	140,394
Minimum Required to Be Well Capitalized	$ 173,661	$ 154,917
Tier 1 capital to risk weighted assets, Ratio
Actual (as a percent)	12.62%	12.88%
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent)	7.875%	7.25%
Minimum Required to Be Well Capitalized (as a percent)	8.00%	8.00%
Tier 1 capital to average assets, Amount
Actual	$ 273,950	$ 249,417
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable	101,935	92,462
Minimum Required to Be Well Capitalized	$ 127,419	$ 115,578
Tier 1 capital to average assets, Ratio
Tier 1 capital leverage ratio (as a percent)	10.75%	10.79%
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 68

Regulatory & Capital Matters - Dividend Restrictions and Deferrals (Details)	6 Months Ended
	Jun. 30, 2018
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	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Assets:
Securities available-for-sale	$ 543,644	$ 543,644	$ 541,439
Mortgage servicing rights	7,812		6,944
U.S. Treasury
Assets:
Securities available-for-sale	3,876		3,947
U.S. government agencies
Assets:
Securities available-for-sale	12,216		13,061
U.S. government agency mortgage-backed
Assets:
Securities available-for-sale	13,407
States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Purchases	19,934	$ 10,456
Assets:
Securities available-for-sale	276,112		278,092
Corporate bonds
Assets:
Securities available-for-sale	700		833
Collateralized mortgage obligations
Assets:
Securities available-for-sale	61,432		65,939
Asset-backed securities
Assets:
Securities available-for-sale	109,263		112,932
Collateralized loan obligations
Assets:
Securities available-for-sale	66,638		54,421
Level 1
Assets:
Securities available-for-sale	3,876		3,947
Level 2
Assets:
Securities available-for-sale	519,548		520,963
Loans held-for-sale	5,206		4,067
Liabilities:
Other liabilities			1,287
Level 3
Assets:
Securities available-for-sale	20,220		16,529
Recurring
Assets:
Securities available-for-sale			13,061
Total financial assets	559,210		553,415
Liabilities:
Total	2,287		2,014
Recurring | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	5,206		4,067
Mortgage servicing rights	7,812		6,944
Recurring | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	2,287		2,014
Recurring | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	2,287		727
Recurring | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	261		238
Recurring | U.S. Treasury
Assets:
Securities available-for-sale			3,947
Recurring | U.S. Treasury | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	3,876
Recurring | U.S. government agencies | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,216
Recurring | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	13,407		12,214
Recurring | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	276,112		278,092
Recurring | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	700		833
Recurring | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	61,432		65,939
Recurring | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	109,263		112,932
Recurring | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	66,638		54,421
Recurring | Level 1
Assets:
Total financial assets	3,876		3,947
Recurring | Level 1 | U.S. Treasury
Assets:
Securities available-for-sale			3,947
Recurring | Level 1 | U.S. Treasury | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	3,876
Recurring | Level 2
Assets:
Securities available-for-sale			13,061
Total financial assets	527,302		525,995
Liabilities:
Total	2,287		2,014
Recurring | Level 2 | Finite-Lived Intangible Assets [Member]
Assets:
Loans held-for-sale	5,206		4,067
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation
Liabilities:
Other liabilities	2,287		2,014
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	2,287		727
Recurring | Level 2 | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member]
Assets:
Other assets	261		238
Recurring | Level 2 | U.S. government agencies | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	12,216
Recurring | Level 2 | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	13,407		12,214
Recurring | Level 2 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	257,663		263,831
Recurring | Level 2 | Corporate bonds | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	700		833
Recurring | Level 2 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	59,661		63,671
Recurring | Level 2 | Asset-backed securities | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	109,263		112,932
Recurring | Level 2 | Collateralized loan obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	66,638		54,421
Recurring | Level 3
Assets:
Total financial assets	28,032		23,473
Recurring | Level 3 | Finite-Lived Intangible Assets [Member]
Assets:
Mortgage servicing rights	7,812		6,944
Recurring | Level 3 | States and political subdivisions | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	18,449		14,261
Recurring | Level 3 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member]
Assets:
Securities available-for-sale	$ 1,771		$ 2,268

Fair Value Measurements - Chang

Fair Value Measurements - Changes in Level 3 (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Changes in Level 3
Beginning balance		$ 3,119
Total gains or losses
Included in other comprehensive income		(1)
Purchases, issuances, sales, and settlements
Settlements		(463)
Ending balance		2,678
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)		23
Collateralized loan obligations
Changes in Level 3
Beginning balance	$ 2,268
Total gains or losses
Included in other comprehensive income	31
Purchases, issuances, sales, and settlements
Settlements	(554)
Ending balance	1,771
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	26
States and political subdivisions
Changes in Level 3
Beginning balance	14,261	22,226
Total gains or losses
Included in other comprehensive income	(551)	(289)
Purchases, issuances, sales, and settlements
Purchases	19,934	10,456
Settlements	(15,195)	(12,045)
Ending balance	18,449	20,348
Mortgage servicing rights
Changes in Level 3
Beginning balance	6,944	6,489
Total gains or losses
Included in earnings (or changes in net assets)		(280)
Purchases, issuances, sales, and settlements
Issuances	668	601
Settlements	(320)	(282)
Ending balance	7,812	$ 6,528
Changes in Level 3 (liabilities)
Included in earnings (or changes in net assets)	$ 520

Fair Value Measurements - Quant

Fair Value Measurements - Quantitative and Qualitative Information (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Quantitative information about Level 3 fair value measurements
Mortgage servicing rights, fair value	$ 7,812	$ 6,944
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)		34.30%
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	$ 7,812
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%	7.00%
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Maximum
Quantitative information about Level 3 fair value measurements
Discount rate (as a percent)	417.60%
Prepayment speed (as a percent)	68.40%	68.40%
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)	8.20%	9.60%

Fair Value Measurements - Nonre

Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Mar. 31, 2018	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
Assets and liabilities measured at fair value
Valuation allowance	$ 498	$ 144
Carrying value of other real estate owned	8,912	8,371	$ 7,063	$ 11,724	$ 13,481	$ 11,916
OREO Valuation allowance	8,348	8,208	$ 8,099	$ 8,304	$ 9,659	$ 9,982
Impaired loans
Assets and liabilities measured at fair value
Valuation allowance		5,300
Nonrecurring
Assets and liabilities measured at fair value
Total	17,298	13,484
Nonrecurring | Impaired loans
Assets and liabilities measured at fair value
Total	8,386	5,113
Valuation allowance	498	144,000,000
Increase (decrease) of specific allocations within the provision for loan losses	90	856,000,000
Nonrecurring | Impaired loans | Carrying Amount
Assets and liabilities measured at fair value
Total	8,900
Nonrecurring | Other real estate owned
Assets and liabilities measured at fair value
Total	8,912	8,371
Carrying value of other real estate owned	8,900	8,400
Outstanding balance	18,200	17,500
OREO Valuation allowance	8,300	8,200
OREO participations	937,000,000	937,000
Nonrecurring | Level 3
Assets and liabilities measured at fair value
Total	17,298	13,484
Nonrecurring | Level 3 | Impaired loans
Assets and liabilities measured at fair value
Total	8,386	5,113
Nonrecurring | Level 3 | Other real estate owned
Assets and liabilities measured at fair value
Total	$ 8,912	$ 8,371

Fair Values of Financial Inst73

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Financial assets:
Cash and due from banks	$ 34,161	$ 37,444
Interest bearing deposits with financial institutions	31,147	18,389
Securities available-for-sale	543,644	541,439	$ 543,644
FHLBC and FRBC Stock	9,093	10,168
Bank-owned life insurance	61,159	61,764
Financial liabilities:
Noninterest bearing deposits	620,807	572,404
Other short-term borrowings	76,625	115,000
Junior subordinated debentures	57,662	57,639
Carrying Amount
Financial assets:
Cash and due from banks	34,161	37,444
Interest bearing deposits with financial institutions	31,147	18,389
Securities available-for-sale	543,644	541,439
FHLBC and FRBC Stock	9,093	10,168
Loans held for sale	5,206	4,067
Loans, net	1,829,841	1,600,161
Accrued interest receivable	10,244	8,595
Financial liabilities:
Noninterest bearing deposits	620,807	572,404
Interest bearing deposits	1,541,044	1,350,521
Securities sold under repurchase agreements	54,038	29,918
Other short-term borrowings	76,625	115,000
Junior subordinated debentures	57,662	57,639
Subordinated debenture	44,108	44,058
Note payable and other borrowings	23,496
Interest rate swap		1,287
Borrowing interest payable	192	140
Deposit interest payable	800	631
Total Fair Value
Financial assets:
Cash and due from banks	34,161	37,444
Interest bearing deposits with financial institutions	31,147	18,389
Securities available-for-sale	543,644	541,439
FHLBC and FRBC Stock	9,093	10,168
Loans held for sale	5,206	4,067
Loans, net	1,816,393	1,586,722
Accrued interest receivable	10,244	8,595
Financial liabilities:
Noninterest bearing deposits	620,807	572,404
Interest bearing deposits	1,534,109	1,346,339
Securities sold under repurchase agreements	54,038	29,918
Other short-term borrowings	76,625	115,000
Junior subordinated debentures	59,471	59,471
Subordinated debenture	46,743	46,743
Note payable and other borrowings	23,496
Interest rate swap		1,287
Borrowing interest payable	192	140
Deposit interest payable	800	631
Level 1
Financial assets:
Cash and due from banks	34,161	37,444
Interest bearing deposits with financial institutions	31,147	18,389
Securities available-for-sale	3,876	3,947
Financial liabilities:
Noninterest bearing deposits	620,807	572,404
Junior subordinated debentures	33,267	33,267
Level 2
Financial assets:
Securities available-for-sale	519,548	520,963
FHLBC and FRBC Stock	9,093	10,168
Loans held for sale	5,206	4,067
Accrued interest receivable	10,244	8,595
Financial liabilities:
Interest bearing deposits	1,534,109	1,346,339
Securities sold under repurchase agreements	54,038	29,918
Other short-term borrowings	76,625	115,000
Junior subordinated debentures	26,204	26,204
Subordinated debenture	46,743	46,743
Note payable and other borrowings	23,496
Interest rate swap		1,287
Borrowing interest payable	192	140
Deposit interest payable	800	631
Level 3
Financial assets:
Securities available-for-sale	20,220	16,529
Loans, net	$ 1,816,393	$ 1,586,722

Derivatives, Hedging Activities

Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk - Fair Value of Derivatives (Details)	Jun. 30, 2018USD ($)item	Dec. 31, 2017USD ($)
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Amount to be reclassified as a reduction to interest expense during the next twelve months	$ 59,000
Derivative assets designated as hedging instruments, classified in other assets	507,000
Derivated liabilities designated as hedging instruments, classified in other liabilities		$ 1,287,000
Interest rate derivatives, derivative assets not designated as hedging instruments, classified in other assets	507,000
Interest rate derivatives, derivative not designated as hedging instruments, classified in other liabilities	507,000	1,287,000
Other derivatives, derivative not designated as hedging instruments, classified in other liabilities	5,000	13,000
Derivative assets designated as hedging instruments, fair value	507,000
Derivative liabilities designated as hedging instruments, fair value		1,287,000
Derivative assets not designated as hedging instruments, fair value	507,000
Total Derivative liabilities not designated as hedging instruments, fair value	$ 512,000	$ 1,301,000
Interest Rate Products | Designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Derivative, number of transactions | item	1
Notional Amount	$ 25,774,000
Interest Rate Products | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Derivative, number of transactions | item	2
Notional Amount	$ 51,548,000
Other Contracts | Not designated
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions
Derivative, number of transactions | item	3
Notional Amount	$ 15,857,000

Derivatives, Hedging Activiti75

Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk - Effect of Fair Value (Details) - USD ($)	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	May 31, 2018	May 31, 2017
Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income	$ 473,000	$ 632,000
Amount of Gain or (Loss) Recognized in Income on Derivative			$ (42,000)	$ (18,000)	$ (116,000)	$ (18,000)

Derivatives, Hedging Activiti76

Derivatives, Hedging Activities and Financial Instruments with Off-Balance Sheet Risk - Commitments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Company's contractual commitments due to letters of credit
Total letters of credit	$ 15,389	$ 12,278
Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	2,931	418
Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,458	11,860
Borrower
Company's contractual commitments due to letters of credit
Total letters of credit	15,322	12,136
Borrower | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	2,931	418
Borrower | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	12,391	11,718
Borrower | Financial standby
Company's contractual commitments due to letters of credit
Total letters of credit	7,337	3,947
Borrower | Financial standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	2,017	177
Borrower | Financial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	5,320	3,770
Borrower | Commercial standby
Company's contractual commitments due to letters of credit
Total letters of credit	395	354
Borrower | Commercial standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	395	354
Borrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	7,590	7,835
Borrower | Performance standby | Fixed
Company's contractual commitments due to letters of credit
Total letters of credit	914	241
Borrower | Performance standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	6,676	7,594
Nonborrower | Performance standby
Company's contractual commitments due to letters of credit
Total letters of credit	67	142
Nonborrower | Performance standby | Variable
Company's contractual commitments due to letters of credit
Total letters of credit	$ 67	$ 142