Mainsource Financial (MSFG) 10-Q 8 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 08, 2017
Document and Entity Information
Entity Registrant Name	MAINSOURCE FINANCIAL GROUP
Entity Central Index Key	720,002
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,582,413
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 63,762	$ 75,778
Money market funds and federal funds sold	6,515	10,774
Cash and cash equivalents	70,277	86,552
Interest bearing time deposits	2,160	1,960
Securities available for sale	1,083,903	1,007,540
Loans held for sale	8,988	12,479
Loans, net of allowance for loan losses of $22,543 and $22,499	3,024,707	2,629,174
FHLB and other stock, at cost	27,972	21,693
Premises and equipment, net	84,920	76,426
Goodwill	136,303	101,315
Purchased intangible assets	14,463	7,419
Cash surrender value of life insurance	88,179	80,539
Interest receivable and other assets	59,628	55,160
Total assets	4,601,500	4,080,257
Deposits
Noninterest bearing	838,490	767,159
Interest bearing	2,583,497	2,343,712
Total deposits	3,421,987	3,110,871
Other borrowings	271,412	209,672
Long term Federal Home Loan Bank (FHLB) advances	310,982	249,658
Subordinated debentures	48,176	41,239
Other liabilities	24,924	19,323
Total liabilities	4,077,481	3,630,763
Commitments and contingent liabilities
Shareholders' equity
Preferred stock, no par value Authorized shares - 400,000 Issued shares - 0 Outstanding shares - 0
Common stock $.50 stated value: Authorized shares - 100,000,000 Issued shares - 26,122,057 and 24,682,189 Outstanding shares - 25,582,413 and 24,067,364	13,248	12,463
Treasury stock - 539,644 and 614,825 shares, at cost	(9,752)	(10,909)
Additional paid-in capital	346,870	299,116
Retained earnings	166,031	145,745
Accumulated other comprehensive income	7,622	3,079
Total shareholders' equity	524,019	449,494
Total liabilities and shareholders' equity	$ 4,601,500	$ 4,080,257

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Loans, allowance for loan losses (in dollars)	$ 22,543	$ 22,499
Preferred stock, par value	$ 0	$ 0
Preferred stock, Authorized shares	400,000	400,000
Preferred stock, Issued shares	0	0
Preferred stock, Outstanding shares	0	0
Common stock, stated value (in dollars per share)	$ 0.50	$ 0.50
Common stock, Authorized shares	100,000,000	100,000,000
Common stock, Issued shares	26,122,057	24,682,189
Common stock, Outstanding shares	25,582,413	24,067,364
Treasury stock, shares	539,644	614,825

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest income
Loans, including fees	$ 34,014	$ 26,782	$ 93,197	$ 73,810
Securities
Taxable	4,473	4,009	13,055	10,488
Tax exempt	3,215	3,023	9,698	9,009
Other interest income	96	43	256	166
Total interest income	41,798	33,857	116,206	93,473
Interest expense
Deposits	1,708	1,066	4,093	3,094
Federal Home Loan Bank advances	1,310	1,093	3,689	3,282
Subordinated debentures	539	355	1,419	1,051
Other borrowings	841	353	1,807	486
Total interest expense	4,398	2,867	11,008	7,913
Net interest income	37,400	30,990	105,198	85,560
Provision for loan losses	600	150	700	855
Net interest income after provision for loan losses	36,800	30,840	104,498	84,705
Non-interest income
Service charges on deposit accounts	5,466	5,696	15,437	15,597
Interchange income	3,009	2,877	9,097	8,317
Mortgage banking	2,659	2,602	7,739	7,135
Trust and investment product fees	1,416	1,163	3,912	3,626
Increase in cash surrender value of life insurance	728	410	1,580	1,056
Net realized gains/(losses) on securities (includes $(9) and $13 accumulated other comprehensive income (AOCI) reclassifications for realized net gains on available for sale securities in 2017 and $23 and $144 in 2016	(9)	23	13	144
(Gain)/Loss on sale and write-down of OREO	44	67	226	253
Other income	(288)	1,076	1,548	3,113
Total non-interest income	13,025	13,914	39,552	39,241
Non-interest expense
Salaries and employee benefits	19,192	16,686	54,530	47,430
Net occupancy	2,830	2,412	7,927	6,877
Equipment	3,454	3,315	10,238	9,493
Intangibles amortization	599	302	1,399	999
Telecommunications	448	459	1,417	1,256
Stationery printing and supplies	316	263	944	809
FDIC assessment	334	395	1,023	1,250
Marketing	673	780	2,418	2,523
Collection expense	72	174	667	596
Prepayment penalty on FHLB advance			214
Acquisition related expenses	3,037	601	8,613	6,964
Interchange expense	927	830	2,634	2,558
Other expenses	3,144	2,724	8,866	8,440
Total non-interest expense	35,026	28,941	100,890	89,195
Income before income tax	14,799	15,813	43,160	34,751
Income tax expense (includes $(3) and $5 income tax expense from AOCI reclassification items in 2017 and $8 and $50 in 2016)	3,683	4,117	10,317	8,172
Net income attributable to common shareholders	$ 11,116	$ 11,696	$ 32,843	$ 26,579
Net income per common share:
Basic	$ 0.43	$ 0.49	$ 1.32	$ 1.17
Diluted	0.43	0.48	1.30	1.15
Dividend per share	$ 0.17	$ 0.15	$ 0.50	$ 0.45

CONSOLIDATED STATEMENTS OF INC5

CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
CONSOLIDATED STATEMENTS OF INCOME
Accumulated other comprehensive income (AOCI) reclassifications for realized net gains on available for sale securities	$ (9)	$ 23	$ 13	$ 144
Income tax expense from AOCI reclassification items	$ (3)	$ 8	$ 5	$ 50

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 11,116	$ 11,696	$ 32,843	$ 26,579
Other comprehensive income:
Unrealized holding gains/(losses) on securities available for sale	666	(4,616)	6,929	14,232
Reclassification adjustment for (gains)/losses included in net income	9	(23)	(13)	(144)
Tax effect	(237)	1,624	(2,421)	(4,930)
Net of tax	438	(3,015)	4,495	9,158
Unrealized holding gains/(losses) on cash flow hedge	45		71
Tax effect	(14)		(23)
Net of tax	31		48
Total other comprehensive income/(loss)	469	(3,015)	4,543	9,158
Comprehensive income	$ 11,585	$ 8,681	$ 37,386	$ 35,737

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating Activities
Net income	$ 32,843	$ 26,579
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	700	855
Depreciation expense	6,129	5,390
Amortization of mortgage servicing rights	1,012	1,068
(Recovery)/additional impairment of valuation allowance on mortgage servicing rights	(25)	175
Securities amortization, net	3,185	3,792
Amortization of purchased intangible assets	1,399	999
Earnings on cash surrender value of life insurance policies	(1,324)	(1,056)
Prepayment penalty on FHLB advance	214
Securities gains, net	(13)	(144)
Gain on loans sold	(4,912)	(4,512)
Loans originated for sale	(175,769)	(185,098)
Proceeds from loan sales	184,172	190,166
Gain on life insurance benefit	(256)
Stock based compensation expense	777	713
Stock portion of director retainer fee expense	241	282
(Gain)/Loss on sale and write-down of OREO	226	253
Excess tax benefit related to stock based compensation	(402)
Change in other assets and liabilities	2,845	(7,520)
Net cash provided by operating activities	50,590	31,436
Investing Activities
Net change in short term investments	(200)
Purchases of securities available for sale	(176,875)	(186,209)
Proceeds from calls, maturities, and payments on securities available for sale	91,313	100,835
Proceeds from sales of securities available for sale	56,441	85,738
Loan originations and payments, net	30,059	(73,574)
Purchases of premises and equipment	(4,760)	(12,179)
Proceeds from sale of OREO	2,230	3,185
Proceeds from redemption of FHLB stock	2,307	3,090
Purchase of FHLB stock	(5,168)	(4,676)
Proceeds from life insurance benefit	511
Cash received/(paid) from business acquisitions, net	2,845	(11,289)
Net cash used by investing activities	(1,297)	(95,079)
Financing Activities
Net change in deposits	(55,755)	28,558
Net change in other borrowings	(10,271)	59,713
Proceeds from FHLB advances	132,000	420,000
Repayment of FHLB advances	(114,694)	(442,006)
Proceeds from term debt		30,000
Cash dividends on common stock	(12,557)	(10,445)
Purchase of treasury shares	(380)	(333)
Repayment on term debt	(5,000)	(10,000)
Proceeds from exercise of stock options	1,089	907
Net cash provided by financing activities	(65,568)	76,394
Net change in cash and cash equivalents	(16,275)	12,751
Cash and cash equivalents, beginning of year	86,552	67,578
Cash and cash equivalents, end of period	70,277	80,329
Supplemental cash flow information
Interest paid	11,497	8,330
Income taxes paid	7,300	3,005
Supplemental non cash disclosure
Loan balances transferred to foreclosed real estate	$ 1,470	$ 1,547

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2017
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTE 1 - BASIS OF PRESENTATION The significant accounting policies followed by MainSource Financial Group, Inc. (“Company”) for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The consolidated interim financial statements have been prepared according to accounting principles generally accepted in the United States of America and in accordance with the instructions for Form 10-Q. The interim statements do not include all information and footnotes normally included in the annual financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements and all such adjustments are of a normal recurring nature. Some items in prior period financial statements were reclassified to conform to current presentation. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Adoption of New Accounting Standards and Newly-Issued, Not Yet Effective Accounting Standards In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers (Topic 606 ) ” ASU 2014-09 says 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. On July 9, 2015, the FASB approved amendments deferring the effective date by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Early application is permitted but not before the original public entity effective date, i.e ., annual periods beginning after December 15, 2016. The Company has determined that ASU No 2014-09 will not have a significant impact on its financial statements as a significant portion of the Company’s revenue is scoped out of the standard. However, there will be some additional disclosures that will be required. In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” ASU 2016-02 requires lessees and lessors to classify leases as either capital leases or operating leases. ASU 2016-02 also requires lessees to recognize assets and liabilities for all leases with the exception of short term leases. There are new disclosure requirements for these leases which will provide users of financial statements with information to understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will become effective for fiscal years beginning after December 15, 2018. The Company currently has prepared a worksheet of all of its leases and will be reviewing them during the next two years to determine the impact on the Company’s financial statements. In March 2016, the FASB issued (ASU) No. 2016-09 “Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than previously allotted for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. ASU 2016-09 is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those years. The Company implemented this ASU in the first quarter of 2017. The impact of this ASU resulted in a $ 402 reduction in income tax expense for the first quarter of 2017. The Company has also elected to recognize forfeitures as they occur. There was no cumulative adjustment to retained earnings to account for these forfeitures as the estimated forfeiture rate previously used was minimal. In June 2016, the FASB issued ASU 2016-13 “Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instrument” “CECL”). ASU 2016-13 requires an allowance for expected credit losses on financial assets be recognized as early as day one of the instrument. This ASU departs from the incurred loss model which means the probability threshold is removed. It considers more forward-looking information and requires the entity to estimate its credit losses as far as it can reasonably estimate. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company has captured loan level loss data since 2011. The Company will be starting its segregation of loans during 2017. The Company anticipates that its allowance for loan losses will increase with the adoption of this standard. In January 2017, the FASB issued (ASU) No. 2017-04 “Intangibles – Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. ” ASU 2017-04 eliminates Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company has assessed ASU 2017-04 and does not expect it to have a material impact on its accounting and disclosures. In March 2017, the FASB issued (ASU) No. 2017-08 " Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20). ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. ASU 2017-08 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company elected to adopt this ASU in the first quarter of 2017. The impact of this adoption on the Company’s earnings was minimal.

STOCK PLANS AND STOCK BASED COM

STOCK PLANS AND STOCK BASED COMPENSATION	9 Months Ended
	Sep. 30, 2017
STOCK PLANS AND STOCK BASED COMPENSATION
STOCK BASED COMPENSATION	NOTE 2 - STOCK PLANS AND STOCK BASED COMPENSATION On January 19, 2015, the Board of Directors adopted and approved the MainSource Financial Group, Inc. 2015 Stock Incentive Plan (the “2015 Plan”) which was effective following the approval of the 2015 Plan by the Company’s shareholders at the 2015 Annual Meeting of Shareholders held on April 29, 2015. The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, share awards of restricted stock, performance share units and other equity based awards. Incentive stock options may be granted only to employees. An aggregate of 1,000,000 shares of common stock are reserved for issuance under the 2015 Plan. Shares issuable under the 2015 Plan may be authorized and unissued shares of common stock or treasury shares. The 2015 Plan was a replacement of a similar plan adopted in 2007. The 2007 Stock Incentive Plan (the “2007 Plan”) provided for the grant of incentive stock options, nonstatutory stock options, stock bonuses and restricted stock awards. An aggregate of 650,000 shares of common stock were reserved for issuance under the 2007 Stock Incentive Plan. The 2007 Plan was in replacement of a similar plan adopted in 2003, the 2003 Stock Option Plan (the “2003 Plan”). Any stock or option awards that were previously issued under the 2007 Plan or 2003 Plan have not been terminated as a result of the adoption of the 2015 Plan, but will continue in accordance with the applicable plan terms and the agreements pursuant to which such stock or option awards were issued. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. Employee and director options are tracked separately. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. All share-based payments to employees, including grants of employee stock options, are recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. For options with graded vesting, the Company values the stock option grants and recognizes compensation expense as if each vesting portion of the award was a single award. The following table summarizes stock option activity: Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Options Shares Price (years) Value Outstanding, beginning of year 193,114 $ 12.09 Granted — — Exercised (86,556) 12.59 Forfeited or expired (400) 13.67 Outstanding at end of period 106,158 $ 11.67 4.4 $ 2,568 Exercisable at end of period 94,754 $ 11.13 4.1 $ 2,344 The following table details stock options outstanding: September 30, December 31, 2017 2016 Stock options vested and currently exercisable: Number 94,754 181,710 Weighted average exercise price $ 11.13 $ 11.83 Aggregate intrinsic value $ 2,344 $ 4,101 Weighted average remaining life (in years) 4.1 3.8 The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the reporting date. The Company recorded $9 and $24 in stock compensation expense during the three and nine months ended September 30, 2017 and $21 and $64 in stock compensation expense during the three and nine months ended September 30, 2016 respectively to salaries and employee benefits. There were no options granted in the first three quarters of 2017 or 2016. Unrecognized stock option compensation expense related to unvested awards for the remainder of 2017 is estimated as follows: Year (in thousands) October 2017 - December 2017 $ 7 During 2016 and the first two quarters of 2017, the Executive Compensation Committee of the Board of Directors of the Company granted restricted stock awards to certain executive officers and other employees pursuant to the Company’s Long Term Incentive Plan (“LTIP”). Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the issue date. The value of the awards was determined by multiplying the award amount by the closing price of a share of Company common stock on the grant date. The restricted stock awards for employees vest as follows — 100% on the third anniversary of the date of grant. A total of 12,802, 13,500, and 4,000 shares of common stock were granted in the first, second, and third quarters of 2017 at a weighted average cost of $34.99, $33.68, and $34.82 per share, respectively. A total of 24,152 and 16,000 shares of common stock were granted in the first and second quarters of 2016 at a weighted average cost of $21.47 and $22.47 per share, respectively. No common stock grants were granted in the third quarters of 2017 or 2016. A summary of changes in the Company’s nonvested restricted shares for 2017 follows: Weighted Average Restricted Grant Date Shares Fair Value Nonvested at January 1, 2017 104,319 $ 20.03 Granted 30,302 34.38 Vested (28,432) 16.31 Forfeited (1,250) 23.62 Nonvested at September 30, 2017 104,939 $ 25.14 As of September 30, 2017, there was $1,553 of total unrecognized compensation costs related to nonvested restricted stock awards granted under the 2015 Plan that will be recognized over the remaining vesting period of approximately 2.2 years. The recognized compensation costs related to the plans were $175 and $588 for the three and nine month periods ending September 30, 2017 and $160 and $512 for the three and nine months periods ending September 30, 2016, respectively. Additionally, in the first quarters of 2017 and 2016, the Committee voted to grant performance share units to certain executive officers pursuant to the Company’s LTIP. The Committee established performance measures, goals and payout calibration for the Performance Share Units. At the end of each three-year performance period, the Committee will certify the results of the performance measures and goals and will pay the earned awards out in cash or shares of Company common stock. Dividends earned during each three-year performance period will be accrued and paid at the end of the performance period, based upon the final number of shares earned. The performance measures and goals are based on financial and shareholder measures, and are evaluated relative to internal goals and the performance of the Company’s peers. Once the performance measures and goals were established, the Committee established threshold, target and superior levels of performance. The LTIP payout of shares will begin once the Company achieves the pre-established threshold (thus, no payout will occur if the performance is equal to or below the threshold). Each executive’s target payout is achieved once the performance equals the target level, and the maximum payout is achieved once the performance equals the superior level (with interpolation between discrete points). Performance Payout Threshold % Target 100 % Superior 150 % The grant of Performance Share Units by the Committee is evidenced by an award agreement between the executive and the Company which provides that each executive will receive shares of Company stock when the Company’s actual performance as compared to its peers and long-term goals exceeds certain thresholds, determined as of December 31, 2018 or 2019, provided the executive remains employed by the Company on such date. The executive’s eligibility for the payout of shares is determined based on the following measures: Evaluated Performance Measure Weight vs. Return on Assets 50 % Peer Total Shareholder Return 25 % Peer Earnings Per Share 25 % Goal The value of the awards was determined by multiplying the award amount by the closing price of a share of Company common stock on the grant date. The performance share units are earned over the three year period of the award. A total of 11,302 performance share units were granted in the first quarter of 2017 at a weighted average cost of $35.04 per share. A total of 16,152 performance share units were granted in the first quarter of 2016 at a weighted average cost of $21.41 per share. No shares were granted in the second or third quarters of 2017 and 2016. Compensation expense is recognized over the three year performance period of the awards based on the fair value of the stock at the issue date and the anticipated achievement level of the target performance. Quarterly, the performance measures will be reevaluated and adjustments made to the expense recorded in the financial statements, if needed, to reflect the new revised achievement levels. $76 and $165 of expense was recognized on these awards for the three and nine month periods ending September 30, 2017. $55 and $137 of expense was recognized on these awards for the three and nine month periods ending September 30, 2016. A total of $506 will be expensed in future periods if the Target level is achieved. In the second quarter of 2017, members of the Board of Directors received their annual retainer in restricted Company stock for the following Board year ended with the 2018 annual meeting of shareholders. The 2017 award vests quarterly for all directors who remain on the Board of Directors on the vesting dates, with 25% of the award vesting on each of May 1, August 1, and November 1, 2017, and February 1, 2018. The value of the 2017 retainer award was determined by multiplying the award amount by the closing price of the stock on the date of the 2017 annual meeting of shareholders. No shares were issued in the first quarter of 2017. For all awards, other expense is recognized over the three month period of the awards based on the fair value of the stock at the issue dates. Shares awarded by quarter were as follows: Quarter Shares Price per Share 2017 2Q 8,204 $ 34.15 A total of $70 and $241 was recognized as other expense in the three and nine month periods ending September 30, 2017, and $103 and $282 was recognized as other expense in the three and nine month periods ending September 30, 2016, respectively.

SECURITIES

SECURITIES	9 Months Ended
	Sep. 30, 2017
SECURITIES
SECURITIES	NOTE 3 - SECURITIES The amortized cost and fair value of securities available for sale and related unrealized gains/losses recognized in accumulated other comprehensive income was as follows: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value As of September 30, 2017 Available for Sale U. S. government agency $ 115 $ 1 $ — $ 116 State and municipal 376,533 13,490 (897) 389,126 Mortgage-backed securities-residential (Government Sponsored Entity) 402,987 1,831 (2,592) 402,226 Collateralized mortgage obligations (Government Sponsored Entity) 283,012 1,124 (1,379) 282,757 Equity securities 4,670 — — 4,670 Other securities 4,933 75 — 5,008 Total available for sale $ 1,072,250 $ 16,521 $ (4,868) $ 1,083,903 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value As of December 31, 2016 Available for Sale U. S. government agency $ 951 $ 4 $ — $ 955 State and municipal 361,335 10,799 (2,848) 369,286 Mortgage-backed securities-residential (Government Sponsored Entity) 450,006 1,253 (4,629) 446,630 Collateralized mortgage obligations (Government Sponsored Entity) 179,314 1,514 (1,427) 179,401 Equity securities 4,670 — — 4,670 Other securities 6,527 71 — 6,598 Total available for sale $ 1,002,803 $ 13,641 $ (8,904) $ 1,007,540 The amortized cost and fair value of the investment securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity or with no maturity are shown separately. Available for Sale Amortized Cost Fair Value Within one year $ 18,434 $ 18,666 One through five years 89,659 93,452 Six through ten years 97,431 101,640 After ten years 176,057 180,492 Mortgage-backed securities-residential (Government Sponsored Entity) 402,987 402,226 Collateralized mortgage obligations (Government Sponsored Entity) 283,012 282,757 Equity securities 4,670 4,670 Total available for sale securities $ 1,072,250 $ 1,083,903 Proceeds from sales of securities available for sale were $956 and $7,615 for the three months ended September 30, 2017 and 2016, respectively. Gross gains of $1 and $23 and gross losses of $10 and $0 were realized on these sales during 2017 and 2016, respectively. Income taxes on these net gains were $(3) and $8 in 2017 and 2016. Proceeds from sales of securities available for sale were $56,441 and $85,738 for the nine months ended September 30, 2017 and 2016, respectively. Gross gains of $153 and $144 and gross losses of $140 and $0 were realized on these sales during 2017 and 2016, respectively. Income taxes on these net gains were $5 and $50 in 2017 and 2016. Below is a summary of securities with unrealized losses as of September 30, 2017 and December 31, 2016 presented by length of time the securities have been in a continuous unrealized loss position. Less than 12 months 12 months or longer Total September 30, 2017 Unrealized Unrealized Unrealized Description of securities Fair Value Losses Fair Value Losses Fair Value Losses U. S. government agency $ — $ — $ — $ — $ — $ — State and municipal 36,363 (517) 10,073 (380) 46,436 (897) Mortgage-backed securities-residential (Government Sponsored Entity) 187,075 (2,359) 8,791 (233) 195,866 (2,592) Collateralized mortgage obligations (Government Sponsored Entity) 132,884 (864) 17,580 (515) 150,464 (1,379) Other securities — — — — — — Total temporarily impaired $ 356,322 $ (3,740) $ 36,444 $ (1,128) $ 392,766 $ (4,868) Less than 12 months 12 months or longer Total December 31, 2016 Unrealized Unrealized Unrealized Description of securities Fair Value Losses Fair Value Losses Fair Value Losses U. S. government agency $ — $ — $ — $ — $ — $ — State and municipal 95,822 (2,848) — — 95,822 (2,848) Mortgage-backed securities-residential (Government Sponsored Entity) 335,668 (4,629) — — 335,668 (4,629) Collateralized mortgage obligations (Government Sponsored Entity) 77,694 (1,202) 8,518 (225) 86,212 (1,427) Other securities — — — — — — Total temporarily impaired $ 509,184 $ (8,679) $ 8,518 $ (225) $ 517,702 $ (8,904) Other-Than-Temporary-Impairment Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under ASC 320. However, certain purchased beneficial interests, including non-agency mortgage-backed securities, asset-backed securities, and collateralized debt obligations that had credit ratings at the time of purchase of below AA are evaluated using the model outlined in ASC 325-10 . In determining OTTI under ASC 320, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When OTTI occurs under either model, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. As of September 30, 2017, the Company’s securities portfolio consisted of 990 securities, 143 of which were in an unrealized loss position. Unrealized losses on state and municipal securities of $897 have not been recognized into income because management has the ability to hold for a period of time sufficient to allow for any anticipated recovery in fair value and it is unlikely that management will be required to sell the securities before their anticipated recovery. The decline in value is primarily attributable to changes in interest rates. The Company monitors the financial condition of these issuers. The fair value of these debt securities is expected to recover as the securities approach their maturity date. At September 30, 2017, almost all of the mortgage-backed securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae and Freddie Mac institutions, which the government has affirmed its commitment to support. Because the decline in fair value of approximately $2,592 is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2017. The Company’s collateralized mortgage obligation securities portfolio includes agency collateralized mortgage obligations with a market value of $150,464 which had unrealized losses of approximately $1,379 at September 30, 2017. As noted above, the decline in fair value is attributable to changes in interest rates and illiquidity and not credit quality. The Company monitors to insure it has adequate credit support and as of September 30, 2017, the Company believes there is no OTTI and does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. All securities are investment grade.

LOANS AND ALLOWANCE

LOANS AND ALLOWANCE	9 Months Ended
	Sep. 30, 2017
LOANS AND ALLOWANCE
LOANS AND ALLOWANCE	NOTE 4 - LOANS AND ALLOWANCE Loans were as follows: September 30, December 31, 2017 2016 Commercial Commercial and industrial $ 496,523 $ 461,092 Agricultural 63,472 73,467 Commercial Real Estate Farm 103,783 111,807 Hotel 120,829 91,213 Construction and development 98,906 102,598 Other 1,101,757 857,078 Residential 1-4 family 694,163 608,366 Home equity 301,332 284,147 Consumer Direct 66,281 61,574 Indirect 204 331 Total loans 3,047,250 2,651,673 Allowance for loan losses (22,543) (22,499) Net loans $ 3,024,707 $ 2,629,174 The Company purchased some financing receivables in the last several years. The investment by portfolio class at September 30, 2017 and December 31, 2016 is as follows. These loans are included in the above table and all other tables below at the recorded investment amount. September 30, December 31, 2017 2016 Commercial and industrial $ 17,876 $ 13,875 Agricultural 772 872 Construction and development 22,012 16,634 Farm real estate 3,585 389 Hotel 13,066 2,983 Other real estate 356,651 164,505 1-4 family 274,732 206,044 Home equity 26,692 14,342 Direct 2,825 2,517 $ 718,211 $ 422,161 The remaining accretable discount on the above loans was $13,024 and $7,313 at September 30, 2017 and December 31, 2016 respectively, with the non-accretable discount being $4,861 and $4,262 at September 30, 2017 and December 31, 2016. Activity in the allowance for loan losses for the three months ended September 30, 2017 and 2016 was as follows: Commercial 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, July 1 $ 9,348 $ 7,866 $ 4,021 $ 1,071 $ 22,306 Provision charged to expense 801 (278) (58) 135 600 Losses charged off (27) (99) (286) (909) (1,321) Recoveries 26 121 111 700 958 Balance, September 30 $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Commercial 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, July 1 $ 6,940 $ 8,780 $ 4,677 $ 1,071 $ 21,468 Provision charged to expense 1,525 (1,225) (257) 107 150 Losses charged off (23) (33) (122) (1,031) (1,209) Recoveries 148 398 106 767 1,419 Balance, September 30 $ 8,590 $ 7,920 $ 4,404 $ 914 $ 21,828 Activity in the allowance for loan losses for the nine months ended September 30, 2017 and 2016 was as follows: Commercial 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, January 1 $ 9,654 $ 7,706 $ 4,247 $ 892 $ 22,499 Provision charged to expense 664 (527) (47) 610 700 Losses charged off (624) (556) (739) (2,560) (4,479) Recoveries 454 987 327 2,055 3,823 Balance, September 30 $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Commercial 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, January 1 $ 6,511 $ 10,702 $ 3,859 $ 948 $ 22,020 Provision charged to expense 2,352 (3,314) 1,214 603 855 Losses charged off (650) (614) (967) (2,748) (4,979) Recoveries 377 1,146 298 2,111 3,932 Balance, September 30 $ 8,590 $ 7,920 $ 4,404 $ 914 $ 21,828 The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method at September 30, 2017 and December 31, 2016. Commercial September 30, 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Ending Balance individually evaluated for impairment $ 2,047 $ 1,384 $ 144 $ — $ 3,575 Ending Balance collectively evaluated for impairment 8,101 6,023 3,644 997 18,765 Ending Balance acquired with deteriorated credit quality — 203 — — 203 Total ending allowance balance $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Loans Ending Balance individually evaluated for impairment $ 3,837 $ 7,082 $ 7,817 $ 961 $ 19,697 Ending Balance collectively evaluated for impairment 556,158 1,406,948 986,113 65,524 3,014,743 Ending Balance acquired with deteriorated credit quality — 11,245 1,565 — 12,810 Total ending loan balance excludes $8,772 of accrued interest $ 559,995 $ 1,425,275 $ 995,495 $ 66,485 $ 3,047,250 Commercial December 31, 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Ending Balance individually evaluated for impairment $ 898 $ 755 $ 147 $ — $ 1,800 Ending Balance collectively evaluated for impairment 8,756 6,951 4,100 892 20,699 Total ending allowance balance $ 9,654 $ 7,706 $ 4,247 $ 892 $ 22,499 Loans Ending Balance individually evaluated for impairment $ 2,705 $ 7,904 $ 10,458 $ 130 $ 21,197 Ending Balance collectively evaluated for impairment 531,854 1,147,536 880,357 61,775 2,621,522 Ending Balance acquired with deteriorated credit quality — 7,256 1,698 — 8,954 Total ending loan balance excludes $7,342 of accrued interest $ 534,559 $ 1,162,696 $ 892,513 $ 61,905 $ 2,651,673 The allowance for loans collectively evaluated for impairment consists of reserves on groups of similar loans based on historical loss experience adjusted for other factors, as well as reserves on certain loans that are classified but determined not to be impaired based on an analysis which incorporates probability of default with a loss given default scenario. The reserves on these loans totaled $1,146 at September 30, 2017 and $2,697 at December 31, 2016. In connection with the previous acquisitions, the Company acquired $25,417 of purchased credit impaired loans with $6,404 of non accretable yield and $526 of accretable yield. The Company provided an additional allowance for loan losses of $203 on these loans at September 30, 2017. The recorded investment in loans excludes accrued interest receivable due to immateriality. The following tables present loans individually evaluated for impairment by class of loans as of September 30, 2017 and December 31, 2016. Performing troubled debt restructurings totaling $394 and $1,925 were excluded as allowed by ASC 310-40. Allowance Unpaid for Loan Principal Recorded Losses September 30, 2017 Balance Investment Allocated With an allowance recorded Commercial Commercial and industrial $ 2,231 $ 2,197 $ 1,342 Agricultural 1,484 1,484 705 Commercial Real Estate Farm 1,346 1,344 550 Hotel 4,196 2,918 203 Construction and development — — — Other 3,303 3,211 834 Residential 1-4 Family 1,062 1,000 143 Home Equity 99 99 1 Consumer Direct — — — Indirect — — — Subtotal — impaired with allowance recorded 13,721 12,253 3,778 With no related allowance recorded Commercial Commercial and industrial $ 490 $ 28 $ — Agricultural 129 129 — Commercial Real Estate Farm 575 310 — Hotel — — — Construction and development 37 37 — Other 4,345 2,309 — Residential 1-4 Family 7,690 6,109 — Home Equity 1,734 1,479 — Consumer Direct 1,066 960 — Indirect — — — Subtotal — impaired with no allowance recorded 16,066 11,361 — Total impaired loans $ 29,787 $ 23,614 $ 3,778 Allowance Unpaid for Loan Principal Recorded Losses December 31, 2016 Balance Investment Allocated With an allowance recorded Commercial Commercial and industrial $ 719 $ 689 $ 429 Agricultural 1,441 1,441 469 Commercial Real Estate Farm 1,106 1,105 360 Hotel — — — Construction and development — — — Other 1,900 1,755 395 Residential 1-4 Family 1,091 1,046 146 Home Equity 15 105 1 Consumer Direct — — — Indirect — — — Subtotal — impaired with allowance recorded 6,272 6,141 1,800 With no related allowance recorded Commercial Commercial and industrial $ 1,028 $ 322 $ — Agricultural 254 253 — Commercial Real Estate Farm 506 241 — Hotel 64 64 — Construction and development 239 162 — Other 3,558 2,652 — Residential 1-4 Family 9,215 7,432 — Home Equity 2,233 1,875 — Consumer Direct 139 130 — Indirect — — — Subtotal — impaired with no allowance recorded 17,236 13,131 — Total impaired loans $ 23,508 $ 19,272 $ 1,800 The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the three months ending September 30, 2017 and September 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40. Average Interest Cash Basis Balance Income Income Three months ended September 30, 2017 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 1,358 8 8 Agricultural 1,622 — — Commercial Real Estate Farm 1,656 — — Hotel 2,934 — — Construction and development 746 — — Other 4,984 9 9 Residential 1-4 family 7,128 32 32 Home equity 1,624 5 5 Consumer Direct 974 1 1 Indirect — — — Total loans $ 23,026 $ 55 $ 55 Average Interest Cash Basis Balance Income Income Three months ended September 30, 2016 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 725 $ 12 $ 12 Agricultural 1,640 — — Commercial Real Estate Farm 1,357 — — Hotel 32 — — Construction and development 124 — — Other 4,791 35 35 Residential 1-4 family 8,299 17 17 Home equity 2,083 4 4 Consumer Direct 126 3 3 Indirect — — — Total loans $ 19,177 $ 71 $ 71 The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the nine months ending September 30, 2017 and September 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40. Average Interest Cash Basis Balance Income Income Nine months ended September 30, 2017 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 1,041 $ 70 70 Agricultural 1,701 — — Commercial Real Estate Farm 1,588 — — Hotel 2,229 — — Construction and development 804 — — Other 4,641 83 83 Residential 1-4 family 7,652 41 41 Home equity 1,811 15 15 Consumer Direct 777 3 3 Indirect — — — Total loans $ 22,244 $ 212 $ 212 Average Interest Cash Basis Balance Income Income Nine months ended September 30, 2016 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 753 $ 43 $ 43 Agricultural 824 — — Commercial Real Estate Farm 830 — — Hotel 16 — — Construction and development 155 — — Other 4,898 152 152 Residential 1-4 family 7,433 44 44 Home equity 2,270 20 20 Consumer Direct 121 9 9 Indirect — 1 1 Total loans $ 17,300 $ 269 $ 269 The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2017 and December 31, 2016: Past due over 90 days and Non-accrual still accruing September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Commercial Commercial and industrial $ 2,225 $ 882 $ — $ — Agricultural 1,550 1,631 — — Commercial Real Estate Farm 1,654 1,347 — — Hotel 2,918 64 — — Construction and development — 122 — 2,135 Other 4,431 3,219 40 — Residential 1-4 Family 6,126 7,163 — — Home Equity 939 1,273 — — Consumer Direct 938 107 — — Indirect — — — — Total $ 20,781 $ 15,808 $ 40 $ 2,135 Included in the above non-accrual loans at September 30, 2017 and December 31, 2016 are $6,877 and $3,564 of loans from the Cheviot and FCB Bancorp acquisitions. The following tables present the aging of the recorded investment in past due loans as of September 30, 2017 and December 31, 2016 by class of loans: Greater than Total 30-59 Days 60-89 Days 90 Days Total Loans Not September 30, 2017 Loans Past Due Past Due Past Due Past Due Past Due Commercial Commercial and industrial $ 496,523 $ 274 $ 389 $ 1,828 $ 2,491 $ 494,032 Agricultural 63,472 34 — 1,496 1,530 61,942 Commercial Real Estate Farm 103,783 5 — 1,559 1,564 102,219 Hotel 120,829 — — — — 120,829 Construction and development 98,906 9 — — 9 98,897 Other 1,101,757 369 12 3,130 3,511 1,098,246 Residential 1-4 Family 694,163 934 1,965 2,591 5,490 688,673 Home Equity 301,332 485 126 580 1,191 300,141 Consumer Direct 66,281 157 11 914 1,082 65,199 Indirect 204 — — — — 204 Total — excludes $8,772 of accrued interest $ 3,047,250 $ 2,267 $ 2,503 $ 12,098 $ 16,868 $ 3,030,382 Greater than Total 30-59 Days 60-89 Days 90 Days Total Loans Not December 31, 2016 Loans Past Due Past Due Past Due Past Due Past Due Commercial Commercial and industrial $ 461,092 $ — $ — $ 176 $ 176 $ 460,916 Agricultural 73,467 215 — 1,606 1,821 71,646 Commercial Real Estate Farm 111,807 81 — 1,243 1,324 110,483 Hotel 91,213 — — 63 63 91,150 Construction and development 102,598 1,416 — 2,223 3,639 98,959 Other 857,078 1,268 90 1,812 3,170 853,908 Residential 1-4 Family 608,366 4,884 2,002 3,262 10,148 598,218 Home Equity 284,147 830 137 914 1,881 282,266 Consumer Direct 61,574 936 — 66 1,002 60,572 Indirect 331 10 — — 10 321 Total — excludes $7,342 of accrued interest $ 2,651,673 $ 9,640 $ 2,229 $ 11,365 $ 23,234 $ 2,628,439 Troubled Debt Restructurings From time to time, the terms of certain loans are modified as troubled debt restructurings. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The total of troubled debt restructurings at September 30, 2017 and December 31, 2016 was $4,022 and $6,474, respectively. The Company has allocated $402 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2017. The Company has committed to lend additional amounts totaling $0 to customers with outstanding loans that are classified as troubled debt restructurings. At December 31, 2016, the comparable numbers were $508 of specific reserves and $0 of commitments. The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2017. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the three months ended September 30, 2017 Number of Loans Investment Investment Residential 1-4 Family 1 $ 92 $ 92 Total 1 $ 92 $ 92 The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2016. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the three months ended September 30, 2016 Number of Loans Investment Investment Commercial real estate Other $ 298 $ 298 Total 2 $ 298 $ 298 The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2017. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the nine months ended September 30, 2017 Number of Loans Investment Investment Commercial Real Estate Other 1 $ 53 $ 53 Residential 1-4 Family 2 422 422 Total 3 $ 475 $ 475 The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2016 Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the nine months ended September 30, 2016 Number of Loans Investment Investment Commercial Agricultural 1 $ 89 $ 89 Commercial real estate Other 2 298 298 Residential 1-4 Family 1 124 124 Home Equity 76 76 Total 8 $ 587 $ 587 The following table presents loans where there was a payment default within twelve months following the modification during both the three and nine month periods ending September 30, 2017. For the three and nine months ended September 30, 2017 Number of Loans Recorded Investment Commercial Other 3 $ 322 Residential 1-4 Family 1 79 Total 4 $ 401 The following table presents loans where there was a payment default within twelve months for the three month period ending September 30, 2016. For the three months ended September 30, 2016 Number of Loans Recorded Investment Residential 1-4 Family 1 $ 104 Total 1 $ 104 The following table presents loans where there was a payment default within twelve months for the nine month period ending September 30, 2016. For the nine months ended September 30, 2016 Number of Loans Recorded Investment Commercial real estate Other 1 $ 125 Residential 1-4 Family 2 250 Total 3 $ 375 A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. The troubled debt restructurings that subsequently defaulted described above did not increase the allowance for loan losses or result in any charge offs during the three or nine month periods ending September 30, 2017 and 2016, respectively. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the three and month periods ending September 30, 2017 and 2016 that did not meet the definition of a troubled debt restructuring. These modified loans had a total recorded investment of $4,616 and $7,895 for the three month period ending September 30, 2017 and 2016 respectively. These modified loans had a total recorded investment of $12,916 and $10,784 for the nine month period ending September 30, 2017 and 2016 respectively. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be significant. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of the borrower to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial and commercial real estate loans individually by classifying the loans as to credit risk. This analysis includes credit relationships with an outstanding balance greater than $1 million on an annual basis. Only credit relationships over $250 are risk graded. The Company uses the following definitions for risk ratings: Special Mention — Loans classified as special mention have above average risk that requires management’s ongoing attention. The borrower may have demonstrated the inability to generate profits or to maintain net worth, chronic delinquency and/or a demonstrated lack of willingness or capacity to meet obligations. 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 classified by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Non-accrual — Loans classified as non-accrual are loans where the further accrual of interest is stopped because payment in full of principal and interest is not expected. In most cases, the principal and interest has been in default for a period of 90 days or more. As of September 30, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Special September 30, 2017 Pass Mention Substandard Non-accrual Commercial Commercial and industrial $ 449,907 $ 2,941 $ 2,914 $ 2,187 Agricultural 52,043 1,557 338 1,484 Commercial Real Estate Farm 79,619 2,950 3,784 1,504 Hotel 117,911 — — 2,918 Construction and development 76,313 — 2,579 — Other 975,414 25,348 12,635 3,937 Total $ 1,751,207 $ 32,796 $ 22,250 $ 12,030 At December 31, 2016, the risk category of loans by class of loans was as follows: Special December 31, 2016 Pass Mention Substandard Non-accrual Commercial Commercial and industrial $ 415,064 $ 3,347 $ 5,297 $ 827 Agricultural 61,637 2,283 — 1,441 Commercial Real Estate Farm 89,297 2,209 694 1,340 Hotel 88,166 — 2,983 64 Construction and development 74,811 3,600 2,287 31 Other 752,063 9,087 7,365 2,141 Total $ 1,481,038 $ 20,526 $ 18,626 $ 5,844 Loans not analyzed individually as part of the above described process are classified by delinquency. These loans are primarily smaller (<$250) commercial, smaller commercial real estate (<$250), residential mortgage and consumer loans. All commercial, commercial real estate, and consumer loans fully or partially secured by 1-4 family residential real estate that are 60-89 days will be classified as Watch. If loans are greater than 90 days past due, they will be classified as Substandard. Smaller commercial and commercial real estate loans on non-accrual are included in the non-accrual tables above. Consumer loans not secured by 1-4 family residential real estate that are 60-119 days past due will be classified Substandard while loans greater than 119 days will be classified as Loss and are subsequently charged off. As of September 30, 2017 and December 31, 2016, the grading of loans by category of loans is as follows: September 30, 2017 Performing Watch Substandard Commercial Commercial and industrial $ 38,536 $ — $ 38 Agricultural 7,984 — 66 Commercial Real Estate Farm 15,776 — 150 Construction and development 20,014 — — Other 83,929 — 494 Total $ 166,239 $ — $ 748 December 31, 2016 Performing Watch Substandard Commercial Commercial and industrial $ 36,502 $ — $ 55 Agricultural 7,916 — 190 Commercial Real Estate Farm 18,260 — 7 Construction and development 21,778 — 91 Other 85,254 90 1,078 Total $ 169,710 $ 90 $ 1,421 September 30, 2017 Performing Watch Substandard Residential 1-4 family $ 689,607 $ 1,965 $ 2,591 Home equity 300,626 126 580 Total $ 990,233 $ 2,091 $ 3,171 September 30, 2017 Performing Substandard Loss Consumer Direct $ 65,356 $ 11 $ 914 Indirect 204 — — Total $ 65,560 $ 11 $ 914 December 31, 2016 Performing Watch Substandard Residential 1-4 family $ 603,102 $ 2,002 $ 3,262 Home equity 283,096 137 914 Total $ 886,198 $ 2,139 $ 4,176 December 31, 2016 Performing Substandard Loss Consumer Direct $ 61,508 $ 4 $ 62 Indirect 331 — — Total $ 61,839 $ 4 $ 62 Purchased Credit Impaired Loans The Company has purchased loans, for which there was, at acquisition, evidence of credit deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these loans is as follows: September 30, December 31, 2017 2016 Commercial $ 15,733 $ 10,817 1-4 Family 2,380 2,399 Outstanding Balance $ 18,113 $ 13,216 Carrying amount, net of allowance of $203 and $0 $ 11,245 $ 8,954 Accretable yield, or income to be collected is as follows: September 30, December 31, 2017 2016 Balance at January 1 $ — $ — New loans purchased 526 — Accretion of income (155) — Reclassifications from nonaccretable difference — — Balance at end of period $ 371 $ — For those purchased credit impaired loans (PCI) disclosed above, the Company increased the allowance for loan losses by $0 and $0 for the third quarter of 2017 and 2016 respectively and $203 and $0 during the nine month period ending September 30, 2017 and 2016. Purchased credit impaired loans purchased during the periods ending September 30, 2017 and December 31, 2016 for which it was probable at acquisition that all contractually required payments would not be collected are as follows: September 30, December 31, 2017 2016 Contractually required payments receivable of loans purchased during the year: Commercial $ 8,968 $ 12,907 1-4 Family 274 3,268 $ 9,242 $ 16,175 Fair value of acquired loans at acquisition $ 6,927 $ 11,560

OTHER REAL ESTATE OWNED

OTHER REAL ESTATE OWNED	9 Months Ended
	Sep. 30, 2017
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED	NOTE 5 — OTHER REAL ESTATE OWNED Other real estate owned is recorded in other assets on the balance sheet. Activity in other real estate owned was as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Beginning Balance $ 2,072 $ $ 1,875 $ Transfer to other real estate owned 362 564 1,470 1,547 Sale — Out of other real estate owned (845) (1,441) (1,936) (2,841) Acquisition — — 227 1,668 Write-down (21) (61) (68) (91) Ending Balance $ 1,568 $ 2,242 $ 1,568 $ 2,242 The value of the sale amount above is the carrying value of the property when it was sold. Activity in the valuation account for other real estate was as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Beginning Balance — $ (237) $ (234) $ (236) $ (217) Impairments during year (21) (61) (68) (91) Recovery on impairments 20 5 66 18 Ending Balance — $ (238) $ (290) $ (238) $ (290) Expenses related to foreclosed assets for the period ending September 30 include: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Write-downs $ 21 $ 61 $ 68 $ 91 Losses/(gains)on sales (65) (128) (294) (344) Net loss/(gain) $ (44) $ (67) $ (226) $ (253) Operating expenses $ 24 $ 46 $ 106 $ 103 Foreclosed residential real estate properties included in other assets on the Consolidated Balance Sheets totaled $559 and $1,443 at September 30, 2017 and December 31, 2016, respectively. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $3,157 and $3,266 at September 30, 2017 and December 31, 2016, respectively.

DEPOSITS & REPURCHASE AGREEMENT

DEPOSITS & REPURCHASE AGREEMENTS	9 Months Ended
	Sep. 30, 2017
DEPOSITS & REPURCHASE AGREEMENTS
DEPOSITS & REPURCHASE AGREEMENTS	NOTE 6 — DEPOSITS & REPURCHASE AGREEMENTS September 30, December 31, 2017 2016 Non-interest-bearing demand $ 838,490 $ Interest-bearing demand 1,202,796 Savings 842,333 Certificates of deposit of $250 or more 121,353 Other certificates and time deposits 417,015 Total deposits $ 3,421,987 $ The Company has entered into repurchase agreements with some of its customers. The agreements are one day in length. At September 30, 2017, these agreements totaled $41,688 and were secured by a pledged amount of $56,590 of mortgage backed securities. At December 31, 2016, these agreements totaled $38,339 and were secured by a pledged amount of $58,001. Management monitors the fair value of the securities on a regular basis. If the fair value of the securities declined to an amount approximating these agreements, more securities would be pledged.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2017
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 7 - EARNINGS PER SHARE Earnings per common share (EPS) were computed as follows: 2017 2016 Net Average Share Net Average Share Three Months Ended September 30, Income Shares Amount Income Shares Amount Basic Earnings Per Common Share Net income $ 11,116 25,580,316 $ 0.43 $ 11,696 24,016,237 $ 0.49 Effect of dilutive warrants 321,370 202,238 Dilutive effect of stock compensation 70,513 103,137 Diluted Earnings Per Common Share Net income attributable to common shareholders and assumed conversions $ 11,116 25,972,199 $ 0.43 $ 11,696 24,321,612 $ 0.48 There were no antidilutive options in the three month periods ending September 30, 2017 or 2016. 2017 2016 Net Average Share Net Average Share Nine Months Ended September 30, Income Shares Amount Income Shares Amount Basic Earnings Per Common Share Net income $ 32,843 24,951,821 $ 1.32 $ 26,579 22,786,961 $ Effect of dilutive warrants Effect of dilutive stock options Diluted Earnings Per Common Share Net income attributable to common shareholders and assumed conversions $ $ 1.30 $ $ 1.15 There were no antidilutive options in the nine month periods ending September 30, 2017 or 2016.

FAIR VALUE

FAIR VALUE	9 Months Ended
	Sep. 30, 2017
FAIR VALUE
FAIR VALUE	NOTE 8 — FAIR VALUE ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or using market data utilizing pricing models, primarily Interactive Data Corporation (IDC), that vary based upon asset class and include available trade, bid, and other market information. Matrix pricing is used for most municipals, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. The grouping of securities is done according to insurer, credit support, state of issuance, and rating to incorporate additional spreads and municipal curves. For the general market municipals, the Thomson Municipal Market Data curve is used to determine the initial curve for determining the price, movement, and yield relationships with the municipal market (Level 2 inputs). Level 3 securities are largely comprised of small, local municipality issuances. Fair values are derived through consideration of funding type, maturity and other features of the issuance, and include reviewing financial statements, earnings forecasts, industry trends and the valuation of comparative issuers. In most cases, the book value of the security is used as the fair value as meaningful pricing data is not readily available. Twice a year, a sample of prices supplied by the pricing agent is validated by comparison to prices obtained from other third party sources. The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals or industry accepted valuation methods. In a limited number of situations, the Company’s appraisal department is determining the value of the appraisal. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the loan officers to adjust for differences between the comparable sales and income data available as well as costs to sell. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Impaired loans are evaluated quarterly for additional impairment and take into account changing market conditions, specific information in the market the property is located, and the overall economic climate as well as overall changes in the credit. The Company’s Appraisal Manager has the overall responsibility for all appraisals. The Company’s loan officer responsible for the loan, the special assets officer, as well as the senior officers of the Company review the adjustments made to the appraisal for market and disposal costs on the loan. The fair value of other real estate owned is measured based on the value of the collateral securing those assets and is determined using several methods. The fair value of real estate is generally determined based on appraisals by qualified licensed appraisers (third party). The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Fair values are reviewed on at least an annual basis. The Company normally applies an internal discount to the value of appraisals used in the fair value evaluation of OREO. The deductions take into account changing business factors and market conditions as well as disposal costs. As noted in the impaired loans discussion above, the Company’s Appraisal Manager has the overall responsibility for all appraisals. The Appraisal Manager reports to the Vice President of Credit Administration who reports to the Chief Credit Officer of the Company. The fair value of servicing rights is based on a valuation model from a third party 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. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 2 inputs). The fair value of mortgage banking derivatives are based on derivative valuation models using market data inputs as of the valuation date (Level 2). The mortgage banking derivative is classified as Interest receivable and other assets on the balance sheet. The fair value of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2). The fair value of derivatives are classified as Interest receivable and other assets and Other liabilities on the balance sheet. Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value under ASC 820 on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below: Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Carrying Identical Assets Inputs Inputs (Dollars in thousands) Value (Level 1) (Level 2) (Level 3) Financial Assets Investment securities available-for-sale U. S. government agency $ 116 $ — $ 116 $ — States and municipal 389,126 — 379,646 9,480 Mortgage-backed securities — residential — Government Sponsored Entity 402,226 — 402,226 — Collateralized mortgage obligations — Government Sponsored Entity 282,757 — 282,757 — Equity securities 4,670 4,670 — — Other securities 5,008 — — 5,008 Total investment securities available-for-sale $ 1,083,903 $ 4,670 $ 1,064,745 $ 14,488 Mortgage banking derivative $ 854 — $ 854 — Interest rate swap asset $ 3,666 — $ 3,666 — Interest rate swap liability $ (3,666) — $ (3,666) — Fair Value Measurements at December 31, 2016 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Carrying Identical Assets Inputs Inputs (Dollars in thousands) Value (Level 1) (Level 2) (Level 3) Financial Assets Investment securities available-for-sale U. S. government agency $ 955 $ — $ 955 $ — States and municipal 369,286 — 359,166 10,120 Mortgage-backed securities — residential — Government Sponsored Entity 446,630 — 446,630 — Collateralized mortgage obligations — Government Sponsored Entity 179,401 — 179,401 — Equity securities 4,670 4,670 — — Other securities 6,598 — — 6,598 Total investment securities available-for-sale $ 1,007,540 $ 4,670 $ 986,152 $ 16,718 Mortgage banking derivative $ 648 — $ 648 — Interest rate swap asset $ 3,003 — $ 3,003 — Interest rate swap liability $ (3,003) — $ (3,003) — There were no transfers between Level 1 and Level 2 during the third quarter of 2017 or 2016. The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month periods ended September 30, 2017 and 2016: Three months ended September 30: States and municipal 2017 2016 Beginning balance, July 1 $ $ Total gains or losses (realized / unrealized) Included in other comprehensive income (7) 6 Settlements (185) (182) Ending balance, September 30 $ 9,480 $ 10,254 Other securities 2017 2016 Beginning balance, July 1 $ 5,009 $ Total gains or losses (realized / unrealized) Settlement through acquisition — — Included in other comprehensive income (1) (2) Ending balance, September 30 $ 5,008 $ 6,599 The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine month periods ended September 30, 2017 and 2016: States and municipal 2017 2016 Beginning balance, January 1 $ $ 10,858 Total gains or losses (realized / unrealized) Included in other comprehensive income (12) 8 Settlements (628) (612) Ending balance, September 30 $ 9,480 $ 10,254 Other securities 2017 2016 Beginning balance, January 1 $ 6,598 $ Total gains or losses (realized / unrealized) Settlement through acquisition (1,590) — Included in other comprehensive income — 75 Ending balance, September 30 $ 5,008 $ 6,599 The Company’s state and municipal security valuations were supported by analysis prepared by an independent third party. Fair values are derived through consideration of funding type, maturity and other features of the issuance, and include reviewing financial statements, earnings forecasts, industry trends and the valuation of comparative issuers. In most cases, the book value of the security is used as the fair value as meaningful pricing data is not readily available. The Company’s other security valuation was supported by analysis prepared by an independent third party. Fair values are derived through consideration of funding type, maturity and other features of the issuance, and include reviewing financial statements, earnings forecasts, industry trends and the valuation of comparative issuers. In most cases, the book value of the security is used as the fair value as meaningful pricing data is not readily available. Assets and Liabilities Measured on a Non-Recurring Basis Assets and liabilities measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable September 30, Identical Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Impaired loans Commercial and industrial $ 855 $ 855 Agricultural 779 779 Hotel 2,715 2,715 Farm real estate 794 794 Other real estate 1,746 1,746 Total impaired loans $ 6,889 $ 6,889 Impaired servicing rights $ 928 $ 928 Fair Value Measurements at December 31, 2016 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable December 31, Identical Assets Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Impaired loans Commercial and industrial $ 260 $ 260 Agricultural 972 972 Farm real estate 745 745 Other real estate 560 560 Total impaired loans $ 2,537 $ 2,537 Impaired servicing rights $ 1,083 $ 1,083 Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a gross carrying amount of $10,464, with a valuation allowance of $3,575 at September 30, 2017. The Company recorded a charge of $1,748 to provision expense associated with these loans for the three months ended September 30, 2017 and a charge of $2,629 to provision expense with these loans for the nine month period ending September 30, 2017. The Company recorded a charge of $228 to provision expense associated with these loans for the three months ended September 30, 2016 and a charge of $634 to provision expense with these loans for the nine month period ending September 30, 2016. At December 31, 2016, impaired loans had a gross carrying amount of $4,008 with a valuation allowance of $1,471. A breakdown of these loans by portfolio class at September 30, 2017 is as follows: Gross Valuation Balance Allowance Net Commercial and industrial $ 2,197 $ 1,342 $ 855 Agricultural 1,484 705 779 Hotel 2,918 203 2,715 Farm real estate 1,344 550 794 Other real estate 2,521 775 1,746 Ending Balance $ 10,464 $ 3,575 $ 6,889 Impaired tranches of servicing rights were carried at a fair value of $928, which is made up of the gross outstanding balance of $1,103 net of a valuation allowance of $175. A $25 credit was made to the valuation allowance in the three and nine month periods ending September 30, 2017. A $125 charge was made to the valuation allowance in the third quarter of 2016 and a charge of $175 was made to the valuation allowance in the first nine months of 2016. At December 31, 2016, impaired servicing rights were carried at a fair value of $1,083 which was made up of the gross outstanding balance of $1,283, net of a valuation allowance of $200. The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2017 and December 31, 2016. Impaired commercial loans, commercial real estate loans, and other real estate owned that are deemed collateral dependent are valued based on the fair value of the underlying collateral. These estimates are based on the most recently available appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property and other related factors to estimate the current value of the collateral. The fair value of the mortgage servicing rights is valued based on present value of future cash flows to be received taking into account the coupon rate on the mortgage as well as estimated prepayment speeds. Fair Value Valuation Unobservable Range/ September 30, 2017 (in thousands) Technique(s) Input(s) Average Impaired Loans: Commercial and industrial $ 855 Sales comparison approach Adjustment for differences between comparable sales 19% - 30% 24% Avg Agricultural 779 Sales comparison approach Adjustment for differences between comparable sales 16%-25% 24% Avg Hotel 2,715 Sales comparison approach Adjustment for differences between comparable sales 40% 40% Avg Farm real estate 794 Sales comparison approach Adjustment for differences between comparable sales 16%-25% 22% Avg Other real estate 1,746 Sales comparison approach Adjustment for differences between comparable sales, type of property, current status of property 19% - 40% 27% Avg $ 6,889 Mortgage servicing rights $ 928 Cash flow analysis Discount rate 10% Fair Value Valuation Unobservable Range/ December 31, 2016 (in thousands) Technique(s) Input(s) Average Impaired Loans: Commercial and industrial $ Sales comparison approach Adjustment for differences between comparable sales 10% - 30% 18% Avg Agricultural Sales comparison approach Adjustment for differences between comparable sales 10% 10% Avg Farm real estate 745 Sales comparison approach Adjustment for differences between comparable sales 10% 10% Avg Other real estate 560 Sales comparison approach Adjustment for differences between comparable sales, type of property, current status of property 16% - 31% 27% Avg $ 2,537 Mortgage servicing rights $ 1,083 Cash flow analysis Discount rate 10% The carrying amounts and estimated fair values of financial instruments, not previously presented, is as follows: Carrying September 30, 2017 Amount Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 70,277 $ 63,762 $ 6,515 $ $ 70,277 Interest bearing time deposits 2,160 2,160 2,160 Loans including loans held for sale, net 3,026,807 9,197 3,034,068 3,043,265 FHLB and other stock 27,972 N/A Interest receivable 14,493 5,703 8,790 14,493 Liabilities Deposits (3,421,987) (838,490) (2,580,936) (3,419,426) Other borrowings (271,412) (271,412) (271,412) FHLB advances (310,982) (309,196) (309,196) Interest payable (1,292) (1,292) (1,292) Subordinated debentures (48,176) (41,021) (41,021) Carrying December 31, 2016 Amount Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 86,552 $ 75,778 $ 10,774 $ $ 86,552 Interest bearing time deposits 1,960 1,960 1,960 Loans including loans held for sale, net 2,639,046 12,598 2,662,431 2,675,029 FHLB and other stock 21,693 N/A Interest receivable 12,576 5,234 7,342 12,576 Liabilities Deposits (3,110,871) (767,159) (2,340,824) (3,107,983) Other borrowings (209,672) (209,686) (209,686) FHLB advances (249,658) (248,944) (248,944) Interest payable (642) (642) (642) Subordinated debentures (41,239) (34,084) (34,084) The difference between the loan balance included above and the amounts shown in Note 4 are the impaired loans discussed above. The methods and assumptions, not previously presented, used to estimate fair values are described as follows: (a) Cash and Cash Equivalents The carrying amounts of cash, short-term instruments, and interest bearing time deposits approximate fair values and are classified as either Level 1 or Level 2. Noninterest bearing deposits are Level 1 whereas interest bearing, due from bank accounts, and fed funds sold are Level 2. (b) FHLB and other stock It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. (c) Loans, Net Fair values of loans are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. (d) Deposits The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate interest bearing deposits approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate interest bearing deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. (e) Borrowings The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification. The fair values of the Company’s subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. The fair values of the Company’s Other borrowings are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification. (f) Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the asset or liability with which the accrual is associated.

REGULATORY CAPITAL

REGULATORY CAPITAL	9 Months Ended
	Sep. 30, 2017
REGULATORY CAPITAL
REGULATORY CAPITAL	NOTE 9 — REGULATORY CAPITAL Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. The assigned capital category is largely determined by four ratios that are calculated according to the regulations. The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures. The capital category assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity’s activities that are not part of the calculated ratios. On July 2, 2013, the Federal Reserve approved a final rule that establishes an integrated regulatory capital framework. The rule implements the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. In general, under the new rules, minimum requirements have increased for both the quantity and quality of capital held by banking organizations. Consistent with the international Basel framework, the new rules include a new minimum ratio of common equity Tier 1 capital to risk-weighted assets of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. The rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and includes a minimum leverage ratio of 4% for all banking organizations. Additionally, in order to avoid limitations on capital distributions, the Company will be required to maintain a capital conservation buffer above the adequately capitalized regulatory capital ratios. The capital conservation buffer is being phased in from 0.00% in 2015 to 2.50% in 2019. At September 30, 2017, the capital conservation buffer is 1.250%. At September 30, 2017, the capital levels for the Company and its subsidiary bank remained in excess of the minimum amounts needed for capital adequacy purposes. The new rules also change the methodology for calculating risk-weighted assets to enhance risk sensitivity and became effective on January 1, 2015. Actual and required capital amounts and ratios are presented below which do not include the conservation buffer in the required ratio: Required for To Be Actual Adequate Capital Well Capitalized September 30, 2017 Amount Ratio Amount Ratio Amount Ratio MainSource Financial Group Total capital (to risk-weighted assets) $ 442,560 13.5 % $ 263,158 % N/A N/A Tier 1 capital (to risk-weighted assets) 420,017 12.8 197,369 N/A N/A Common equity Tier 1 capital (to risk-weighted assets) 372,091 11.3 148,026 N/A N/A Tier 1 capital (to average assets) 420,017 9.5 177,717 N/A N/A MainSource Bank Total capital (to risk-weighted assets) $ 446,375 13.6 % $ 263,215 % $ 329,019 % Tier 1 capital (to risk-weighted assets) 423,832 12.9 197,411 263,215 Common equity Tier 1 capital (to risk-weighted assets) 423,832 12.9 148,058 213,862 Tier 1 capital (to average assets) 423,832 9.6 177,436 221,795 Required for To Be Actual Adequate Capital Well Capitalized December 31, 2016 Amount Ratio Amount Ratio Amount Ratio MainSource Financial Group Total capital (to risk-weighted assets) $ % $ % N/A N/A Tier 1 capital (to risk-weighted assets) N/A N/A Common equity Tier 1 capital (to risk-weighted assets) N/A N/A Tier 1 capital (to average assets) N/A N/A MainSource Bank Total capital (to risk-weighted assets) $ % $ % $ % Tier 1 capital (to risk-weighted assets) Common equity Tier 1 capital (to risk-weighted assets) Tier 1 capital (to average assets) Management believes as of September 30, 2017, the Company and the Bank met all capital adequacy requirements to which they are subject to be considered well-capitalized. The Company is a source of additional financial strength to the Bank with its $13,000 in cash and its ability to downstream additional capital to the Bank.

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2017
INCOME TAXES
INCOME TAXES	NOTE 10 — INCOME TAXES In accordance with ASC 740-270-50-1, Accounting for Interim Reporting, the provision for income taxes was recorded at September 30, 2017 and 2016 based on the current estimate of the effective annual rate. The effective tax rate for the third quarter of 2017 was 24.9% versus 26.0% for the same period in 2016. For the first nine months of 2017 and 2016, the effective tax rate was 23.9% vs 23.5%. The slight increase in the effective tax rate for the first nine months of 2017 was due to pre-tax earnings increasing at a greater rate than earnings from tax exempt investments. The Company’s effective tax rate was lower than its blended statutory rate due to the Company’s investments in tax-exempt securities, tax-exempt loans, company-owned life insurance, and a subsidiary company domiciled in a state with no state or local income tax.

DERIVATIVES

DERIVATIVES	9 Months Ended
	Sep. 30, 2017
DERIVATIVES
DERIVATIVES	NOTE 11 — DERIVATIVES The Bank executes interest rate swaps with commercial banking customers to facilitate their risk management strategies. These derivative positions relate to transactions in which the Bank enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. The Bank agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Bank agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the customer to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institutions offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Bank’s results of operations. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $186.2 million at September 30, 2017 and $143.3 million at December 31, 2016. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bank’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Bank minimizes credit risk through credit approvals, limits, and monitoring procedures. The fair value of interest rate swaps are summarized below: September 30, 2017 December 31, 2016 Notional Notional Amount Fair Value Amount Fair Value Included in Other Assets: Interest Rate Swaps at Fair Value $ 186,209 $ 3,666 $ 143,300 $ 3,003 Included in Other Liabilities: Interest Rate Swaps at Fair Value $ 186,209 $ 3,666 $ 143,300 $ 3,003 The effect of derivative instruments on the Consolidated Statement of Income is presented below: Three Months Ended September 30, 2017 2016 Interest Rate Swaps - Fee Income Included in Other Income / (Expense) $ 209 $ 257 Nine Months Ended September 30, 2017 2016 Interest Rate Swaps – Fee Income Included in Other Income / (Expense) $ 612 $ 766

ACQUISITIONS

ACQUISITIONS	9 Months Ended
	Sep. 30, 2017
ACQUISITIONS
ACQUISITIONS	NOTE 12 – ACQUISITIONS On April 30, 2017, the Company acquired 100% of the outstanding common shares of FCB Bancorp, Inc., a Kentucky corporation (“FCB”). On June 23, 2017, FCB’s wholly-owned subsidiary, The First Capital Bank of Kentucky, a Kentucky-chartered bank (“FCB Bank”) was merged into the Company’s wholly-owned subsidiary, MainSource Bank. Shareholders of FCB were entitled to merger consideration in accordance with the terms of the merger agreement. At the effective time of the Merger, shareholders of FCB received (i) 0.9 shares of MainSource common stock (the “Exchange Ratio”) and (ii) $7.00 in cash for each share of FCB common stock owned. Additionally, all outstanding and unexercised options to purchase FCB stock vested in full and were converted automatically into the right to receive an amount of cash equal to the product of (i) the difference (if positive) between (A) $7.00 plus the product of (y) 0.9 and (z) the average of the daily closing sales prices of a share of MainSource common stock as reported on the NASDAQ for the 10 consecutive trading days ending on the third business day preceding the Closing Date minus (B) the exercise price of such FCB stock option, multiplied by (ii) the number of shares of FCB common stock subject to such FCB stock option In total, the Company issued 1,402,612 shares of common stock and paid $10.9 million in cash to the former shareholders of FCB. With the acquisition, the Company expanded its presence in the greater Louisville area. The acquisition offers the Company the opportunity to increase profitability by introducing new products and services to the acquired customer base and adding new customers in the expanded region. FCB’s results of operations were included in the Company’s results beginning May 1, 2017. Acquisition-related costs of $ 7,063 were included in the Company’s income statement for the nine months ended September 30, 2017. The fair value of the common shares issued as part of the consideration paid for FCB was determined on the basis of the closing price of the Company’s common shares on the acquisition date. Goodwill of $3 3,668 arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. Goodwill will not be deductible for income tax purposes. The following Consideration Cash $ 10,911 Equity Instruments 47,969 Fair Value of Total Consideration $ 58,880 Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed Cash and cash equivalents $ 15,972 Securities 45,498 Federal Home Loan Bank stock 3,418 Loans 427,762 Premises and equipment 9,863 Core deposit intangibles 6,263 Bank owned life insurance 6,571 Other assets 9,057 Total assets acquired $ 524,404 Deposits $ 366,871 Federal Home Loan Bank advances 43,804 Subordinated debt 17,111 Other liabilities 71,406 Total liabilities assumed $ 499,192 Total identifiable net assets $ 25,212 Goodwill $ 33,668 The Company will be completing its final fair value adjustments in the fourth quarter of 2017. The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans and customer receivables with a fair value and gross contractual amounts receivable of $419,470 and $427,152 on the date of acquisition. The following table presents pro forma information as if the acquisition had occurred at the beginning of 2016. The pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred if the transaction had been effected on the assumed dates. 3 months 3 months 9 months 9 months 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Net interest income $ 37,400 $ 35,317 $ 110,947 $ 98,452 Net income 12,133 13,100 38,801 34,200 Basic earnings per share 0.47 0.51 1.51 1.40 Diluted earnings per share 0.47 0.51 1.49 1.39 On February 17, 2017, MainSource Bank entered into an agreement with First Service Capital Management, Inc. (“First Service”), located in Elizabethtown, Kentucky, to acquire the assets under management. The transaction closed on February 17, 2017. $1,400 was paid on February 17, 2017 upon closing of the transaction and the remaining balance will be paid as earned over the next two years. In connection with the acquisition, the Bank also agreed to hire all of the First Service employees, including its four brokers. The purchase price of approximately $1,750 resulted in goodwill of $660 and a customer relationship intangible of $1,090 being recorded. The customer relationship intangible is being amortized over 15 years. Goodwill and intangible assets will be deducted for tax purposes over 15 years. On May 1, 2017, MainSource Bank entered into an agreement with Capstone Investment Management, LLC. (“Capstone”), located in Greenwood, Indiana, to acquire the assets under management. In connection with the acquisition, the Bank also agreed to hire all of Capstone’s employees. The purchase price of approximately $1,750 will result in intangible assets including goodwill and a customer relationship intangible. Preliminary amounts have been recorded in the second quarter of 2017 but are still being finalized. $756 was paid on May 1, 2017 upon closing of the transaction and a loan held by the seller of $644 was assumed. The remaining balance will be paid as earned over the next two years. On July 25, 2017, First Financial Bancorp (“First Financial”) and MainSource Financial Group, Inc. (the “Company”) executed a definitive merger agreement pursuant to which the Company agreed to merge into First Financial in a stock-for-stock transaction. MainSource Bank, a wholly owned subsidiary of the Company, will merge into First Financial Bank, a wholly owned subsidiary of First Financial. Under the terms of the merger agreement, shareholders of the Company will receive 1.3875 common shares of First Financial common stock for each share of the Company’s common stock. The closing price of First Financial on July 25, 2017 was $28.10. Including outstanding options and warrants on the Company’s common stock, the transaction is valued at approximately $1.0 billion. Upon closing, First Financial shareholders will own approximately 63% of the combined company and the Company’s shareholders will own approximately 37% on a fully diluted basis. The merger will result in a combined company with approximately $13.3 billion in assets, $8.9 billion in loans, $10.0 billion in deposits, and $4.0 billion in assets under management, utilizing financial information as of September 30, 2017. The transaction will allow the combined company to better meet the needs of its communities in a rapidly changing banking environment, while providing the efficiencies and scale required to comply with regulatory requirements and costs associated with crossing the $10 billion asset threshold. The transaction is expected to close in early 2018, subject to the approval of shareholders of both First Financial and the Company and regulatory approvals, as well as satisfaction of customary closing conditions. The combined company will operate as First Financial and its headquarters will be located in downtown Cincinnati, Ohio.

STOCK PLANS AND STOCK BASED C20

STOCK PLANS AND STOCK BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2017
STOCK PLANS AND STOCK BASED COMPENSATION
Summary of stock option activity	Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Options Shares Price (years) Value Outstanding, beginning of year 193,114 $ 12.09 Granted — — Exercised (86,556) 12.59 Forfeited or expired (400) 13.67 Outstanding at end of period 106,158 $ 11.67 4.4 $ 2,568 Exercisable at end of period 94,754 $ 11.13 4.1 $ 2,344
Schedule of details of stock options outstanding	September 30, December 31, 2017 2016 Stock options vested and currently exercisable: Number 94,754 181,710 Weighted average exercise price $ 11.13 $ 11.83 Aggregate intrinsic value $ 2,344 $ 4,101 Weighted average remaining life (in years) 4.1 3.8
Schedule of unrecognized stock option compensation expense related to unvested awards	Year (in thousands) October 2017 - December 2017 $ 7
Summary of changes in the nonvested shares	Weighted Average Restricted Grant Date Shares Fair Value Nonvested at January 1, 2017 104,319 $ 20.03 Granted 30,302 34.38 Vested (28,432) 16.31 Forfeited (1,250) 23.62 Nonvested at September 30, 2017 104,939 $ 25.14
Summary of executive's payout percentage from the LTIP upon achievement of certain performance levels	Performance Payout Threshold % Target 100 % Superior 150 %
Schedule of executive's eligibility for payout of shares determined by certain measures	Evaluated Performance Measure Weight vs. Return on Assets 50 % Peer Total Shareholder Return 25 % Peer Earnings Per Share 25 % Goal
Schedule of shares awarded by quarter	Quarter Shares Price per Share 2017 2Q 8,204 $ 34.15

SECURITIES (Tables)

SECURITIES (Tables)	9 Months Ended
	Sep. 30, 2017
SECURITIES
Schedule of amortized cost and fair value of securities available for sale and related unrealized gains/losses recognized in accumulated other comprehensive income	Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value As of September 30, 2017 Available for Sale U. S. government agency $ 115 $ 1 $ — $ 116 State and municipal 376,533 13,490 (897) 389,126 Mortgage-backed securities-residential (Government Sponsored Entity) 402,987 1,831 (2,592) 402,226 Collateralized mortgage obligations (Government Sponsored Entity) 283,012 1,124 (1,379) 282,757 Equity securities 4,670 — — 4,670 Other securities 4,933 75 — 5,008 Total available for sale $ 1,072,250 $ 16,521 $ (4,868) $ 1,083,903 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value As of December 31, 2016 Available for Sale U. S. government agency $ 951 $ 4 $ — $ 955 State and municipal 361,335 10,799 (2,848) 369,286 Mortgage-backed securities-residential (Government Sponsored Entity) 450,006 1,253 (4,629) 446,630 Collateralized mortgage obligations (Government Sponsored Entity) 179,314 1,514 (1,427) 179,401 Equity securities 4,670 — — 4,670 Other securities 6,527 71 — 6,598 Total available for sale $ 1,002,803 $ 13,641 $ (8,904) $ 1,007,540
Schedule of contractual maturities of securities	Available for Sale Amortized Cost Fair Value Within one year $ 18,434 $ 18,666 One through five years 89,659 93,452 Six through ten years 97,431 101,640 After ten years 176,057 180,492 Mortgage-backed securities-residential (Government Sponsored Entity) 402,987 402,226 Collateralized mortgage obligations (Government Sponsored Entity) 283,012 282,757 Equity securities 4,670 4,670 Total available for sale securities $ 1,072,250 $ 1,083,903
Schedule of securities in a continuous unrealized loss position with unrealized losses presented by length of time	Less than 12 months 12 months or longer Total September 30, 2017 Unrealized Unrealized Unrealized Description of securities Fair Value Losses Fair Value Losses Fair Value Losses U. S. government agency $ — $ — $ — $ — $ — $ — State and municipal 36,363 (517) 10,073 (380) 46,436 (897) Mortgage-backed securities-residential (Government Sponsored Entity) 187,075 (2,359) 8,791 (233) 195,866 (2,592) Collateralized mortgage obligations (Government Sponsored Entity) 132,884 (864) 17,580 (515) 150,464 (1,379) Other securities — — — — — — Total temporarily impaired $ 356,322 $ (3,740) $ 36,444 $ (1,128) $ 392,766 $ (4,868) Less than 12 months 12 months or longer Total December 31, 2016 Unrealized Unrealized Unrealized Description of securities Fair Value Losses Fair Value Losses Fair Value Losses U. S. government agency $ — $ — $ — $ — $ — $ — State and municipal 95,822 (2,848) — — 95,822 (2,848) Mortgage-backed securities-residential (Government Sponsored Entity) 335,668 (4,629) — — 335,668 (4,629) Collateralized mortgage obligations (Government Sponsored Entity) 77,694 (1,202) 8,518 (225) 86,212 (1,427) Other securities — — — — — — Total temporarily impaired $ 509,184 $ (8,679) $ 8,518 $ (225) $ 517,702 $ (8,904)

LOANS AND ALLOWANCE (Tables)

LOANS AND ALLOWANCE (Tables)	9 Months Ended
	Sep. 30, 2017
LOANS AND ALLOWANCE
Schedule of loans	September 30, December 31, 2017 2016 Commercial Commercial and industrial $ 496,523 $ 461,092 Agricultural 63,472 73,467 Commercial Real Estate Farm 103,783 111,807 Hotel 120,829 91,213 Construction and development 98,906 102,598 Other 1,101,757 857,078 Residential 1-4 family 694,163 608,366 Home equity 301,332 284,147 Consumer Direct 66,281 61,574 Indirect 204 331 Total loans 3,047,250 2,651,673 Allowance for loan losses (22,543) (22,499) Net loans $ 3,024,707 $ 2,629,174
Schedule of loans acquired through purchase	September 30, December 31, 2017 2016 Commercial and industrial $ 17,876 $ 13,875 Agricultural 772 872 Construction and development 22,012 16,634 Farm real estate 3,585 389 Hotel 13,066 2,983 Other real estate 356,651 164,505 1-4 family 274,732 206,044 Home equity 26,692 14,342 Direct 2,825 2,517 $ 718,211 $ 422,161
Schedule of activity in the allowance for loan losses	Activity in the allowance for loan losses for the three months ended September 30, 2017 and 2016 was as follows: Commercial 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, July 1 $ 9,348 $ 7,866 $ 4,021 $ 1,071 $ 22,306 Provision charged to expense 801 (278) (58) 135 600 Losses charged off (27) (99) (286) (909) (1,321) Recoveries 26 121 111 700 958 Balance, September 30 $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Commercial 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, July 1 $ 6,940 $ 8,780 $ 4,677 $ 1,071 $ 21,468 Provision charged to expense 1,525 (1,225) (257) 107 150 Losses charged off (23) (33) (122) (1,031) (1,209) Recoveries 148 398 106 767 1,419 Balance, September 30 $ 8,590 $ 7,920 $ 4,404 $ 914 $ 21,828 Activity in the allowance for loan losses for the nine months ended September 30, 2017 and 2016 was as follows: Commercial 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, January 1 $ 9,654 $ 7,706 $ 4,247 $ 892 $ 22,499 Provision charged to expense 664 (527) (47) 610 700 Losses charged off (624) (556) (739) (2,560) (4,479) Recoveries 454 987 327 2,055 3,823 Balance, September 30 $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Commercial 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Balance, January 1 $ 6,511 $ 10,702 $ 3,859 $ 948 $ 22,020 Provision charged to expense 2,352 (3,314) 1,214 603 855 Losses charged off (650) (614) (967) (2,748) (4,979) Recoveries 377 1,146 298 2,111 3,932 Balance, September 30 $ 8,590 $ 7,920 $ 4,404 $ 914 $ 21,828
Schedule of balance in the allowance for loan losses and the recorded investment by portfolio segment and impairment method	Commercial September 30, 2017 Commercial Real Estate Residential Consumer Total Allowance for loan losses Ending Balance individually evaluated for impairment $ 2,047 $ 1,384 $ 144 $ — $ 3,575 Ending Balance collectively evaluated for impairment 8,101 6,023 3,644 997 18,765 Ending Balance acquired with deteriorated credit quality — 203 — — 203 Total ending allowance balance $ 10,148 $ 7,610 $ 3,788 $ 997 $ 22,543 Loans Ending Balance individually evaluated for impairment $ 3,837 $ 7,082 $ 7,817 $ 961 $ 19,697 Ending Balance collectively evaluated for impairment 556,158 1,406,948 986,113 65,524 3,014,743 Ending Balance acquired with deteriorated credit quality — 11,245 1,565 — 12,810 Total ending loan balance excludes $8,772 of accrued interest $ 559,995 $ 1,425,275 $ 995,495 $ 66,485 $ 3,047,250 Commercial December 31, 2016 Commercial Real Estate Residential Consumer Total Allowance for loan losses Ending Balance individually evaluated for impairment $ 898 $ 755 $ 147 $ — $ 1,800 Ending Balance collectively evaluated for impairment 8,756 6,951 4,100 892 20,699 Total ending allowance balance $ 9,654 $ 7,706 $ 4,247 $ 892 $ 22,499 Loans Ending Balance individually evaluated for impairment $ 2,705 $ 7,904 $ 10,458 $ 130 $ 21,197 Ending Balance collectively evaluated for impairment 531,854 1,147,536 880,357 61,775 2,621,522 Ending Balance acquired with deteriorated credit quality — 7,256 1,698 — 8,954 Total ending loan balance excludes $7,342 of accrued interest $ 534,559 $ 1,162,696 $ 892,513 $ 61,905 $ 2,651,673
Schedule of loans individually evaluated for impairment by class of loans	Allowance Unpaid for Loan Principal Recorded Losses September 30, 2017 Balance Investment Allocated With an allowance recorded Commercial Commercial and industrial $ 2,231 $ 2,197 $ 1,342 Agricultural 1,484 1,484 705 Commercial Real Estate Farm 1,346 1,344 550 Hotel 4,196 2,918 203 Construction and development — — — Other 3,303 3,211 834 Residential 1-4 Family 1,062 1,000 143 Home Equity 99 99 1 Consumer Direct — — — Indirect — — — Subtotal — impaired with allowance recorded 13,721 12,253 3,778 With no related allowance recorded Commercial Commercial and industrial $ 490 $ 28 $ — Agricultural 129 129 — Commercial Real Estate Farm 575 310 — Hotel — — — Construction and development 37 37 — Other 4,345 2,309 — Residential 1-4 Family 7,690 6,109 — Home Equity 1,734 1,479 — Consumer Direct 1,066 960 — Indirect — — — Subtotal — impaired with no allowance recorded 16,066 11,361 — Total impaired loans $ 29,787 $ 23,614 $ 3,778 Allowance Unpaid for Loan Principal Recorded Losses December 31, 2016 Balance Investment Allocated With an allowance recorded Commercial Commercial and industrial $ 719 $ 689 $ 429 Agricultural 1,441 1,441 469 Commercial Real Estate Farm 1,106 1,105 360 Hotel — — — Construction and development — — — Other 1,900 1,755 395 Residential 1-4 Family 1,091 1,046 146 Home Equity 15 105 1 Consumer Direct — — — Indirect — — — Subtotal — impaired with allowance recorded 6,272 6,141 1,800 With no related allowance recorded Commercial Commercial and industrial $ 1,028 $ 322 $ — Agricultural 254 253 — Commercial Real Estate Farm 506 241 — Hotel 64 64 — Construction and development 239 162 — Other 3,558 2,652 — Residential 1-4 Family 9,215 7,432 — Home Equity 2,233 1,875 — Consumer Direct 139 130 — Indirect — — — Subtotal — impaired with no allowance recorded 17,236 13,131 — Total impaired loans $ 23,508 $ 19,272 $ 1,800
Schedule of average balance of impaired loans and interest income and cash basis interest recognized	The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the three months ending September 30, 2017 and September 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40. Average Interest Cash Basis Balance Income Income Three months ended September 30, 2017 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 1,358 8 8 Agricultural 1,622 — — Commercial Real Estate Farm 1,656 — — Hotel 2,934 — — Construction and development 746 — — Other 4,984 9 9 Residential 1-4 family 7,128 32 32 Home equity 1,624 5 5 Consumer Direct 974 1 1 Indirect — — — Total loans $ 23,026 $ 55 $ 55 Average Interest Cash Basis Balance Income Income Three months ended September 30, 2016 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 725 $ 12 $ 12 Agricultural 1,640 — — Commercial Real Estate Farm 1,357 — — Hotel 32 — — Construction and development 124 — — Other 4,791 35 35 Residential 1-4 family 8,299 17 17 Home equity 2,083 4 4 Consumer Direct 126 3 3 Indirect — — — Total loans $ 19,177 $ 71 $ 71 The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the nine months ending September 30, 2017 and September 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40. Average Interest Cash Basis Balance Income Income Nine months ended September 30, 2017 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 1,041 $ 70 70 Agricultural 1,701 — — Commercial Real Estate Farm 1,588 — — Hotel 2,229 — — Construction and development 804 — — Other 4,641 83 83 Residential 1-4 family 7,652 41 41 Home equity 1,811 15 15 Consumer Direct 777 3 3 Indirect — — — Total loans $ 22,244 $ 212 $ 212 Average Interest Cash Basis Balance Income Income Nine months ended September 30, 2016 Impaired Loans Recognized Recognized Commercial Commercial and industrial $ 753 $ 43 $ 43 Agricultural 824 — — Commercial Real Estate Farm 830 — — Hotel 16 — — Construction and development 155 — — Other 4,898 152 152 Residential 1-4 family 7,433 44 44 Home equity 2,270 20 20 Consumer Direct 121 9 9 Indirect — 1 1 Total loans $ 17,300 $ 269 $ 269
Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans	Past due over 90 days and Non-accrual still accruing September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016 Commercial Commercial and industrial $ 2,225 $ 882 $ — $ — Agricultural 1,550 1,631 — — Commercial Real Estate Farm 1,654 1,347 — — Hotel 2,918 64 — — Construction and development — 122 — 2,135 Other 4,431 3,219 40 — Residential 1-4 Family 6,126 7,163 — — Home Equity 939 1,273 — — Consumer Direct 938 107 — — Indirect — — — — Total $ 20,781 $ 15,808 $ 40 $ 2,135
Schedule of aging of the recorded investment in past due loans	Greater than Total 30-59 Days 60-89 Days 90 Days Total Loans Not September 30, 2017 Loans Past Due Past Due Past Due Past Due Past Due Commercial Commercial and industrial $ 496,523 $ 274 $ 389 $ 1,828 $ 2,491 $ 494,032 Agricultural 63,472 34 — 1,496 1,530 61,942 Commercial Real Estate Farm 103,783 5 — 1,559 1,564 102,219 Hotel 120,829 — — — — 120,829 Construction and development 98,906 9 — — 9 98,897 Other 1,101,757 369 12 3,130 3,511 1,098,246 Residential 1-4 Family 694,163 934 1,965 2,591 5,490 688,673 Home Equity 301,332 485 126 580 1,191 300,141 Consumer Direct 66,281 157 11 914 1,082 65,199 Indirect 204 — — — — 204 Total — excludes $8,772 of accrued interest $ 3,047,250 $ 2,267 $ 2,503 $ 12,098 $ 16,868 $ 3,030,382 Greater than Total 30-59 Days 60-89 Days 90 Days Total Loans Not December 31, 2016 Loans Past Due Past Due Past Due Past Due Past Due Commercial Commercial and industrial $ 461,092 $ — $ — $ 176 $ 176 $ 460,916 Agricultural 73,467 215 — 1,606 1,821 71,646 Commercial Real Estate Farm 111,807 81 — 1,243 1,324 110,483 Hotel 91,213 — — 63 63 91,150 Construction and development 102,598 1,416 — 2,223 3,639 98,959 Other 857,078 1,268 90 1,812 3,170 853,908 Residential 1-4 Family 608,366 4,884 2,002 3,262 10,148 598,218 Home Equity 284,147 830 137 914 1,881 282,266 Consumer Direct 61,574 936 — 66 1,002 60,572 Indirect 331 10 — — 10 321 Total — excludes $7,342 of accrued interest $ 2,651,673 $ 9,640 $ 2,229 $ 11,365 $ 23,234 $ 2,628,439
Schedule of loans by class modified as troubled debt restructurings	The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2017. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the three months ended September 30, 2017 Number of Loans Investment Investment Residential 1-4 Family 1 $ 92 $ 92 Total 1 $ 92 $ 92 The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2016. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the three months ended September 30, 2016 Number of Loans Investment Investment Commercial real estate Other $ 298 $ 298 Total 2 $ 298 $ 298 The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2017. Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the nine months ended September 30, 2017 Number of Loans Investment Investment Commercial Real Estate Other 1 $ 53 $ 53 Residential 1-4 Family 2 422 422 Total 3 $ 475 $ 475 The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2016 Pre-Modification Post-Modification Outstanding Recorded Outstanding Recorded For the nine months ended September 30, 2016 Number of Loans Investment Investment Commercial Agricultural 1 $ 89 $ 89 Commercial real estate Other 2 298 298 Residential 1-4 Family 1 124 124 Home Equity 76 76 Total 8 $ 587 $ 587
Schedule of loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification	The following table presents loans where there was a payment default within twelve months following the modification during both the three and nine month periods ending September 30, 2017.
Schedule of risk category of loans by class of loans	As of September 30, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Special September 30, 2017 Pass Mention Substandard Non-accrual Commercial Commercial and industrial $ 449,907 $ 2,941 $ 2,914 $ 2,187 Agricultural 52,043 1,557 338 1,484 Commercial Real Estate Farm 79,619 2,950 3,784 1,504 Hotel 117,911 — — 2,918 Construction and development 76,313 — 2,579 — Other 975,414 25,348 12,635 3,937 Total $ 1,751,207 $ 32,796 $ 22,250 $ 12,030 At December 31, 2016, the risk category of loans by class of loans was as follows: Special December 31, 2016 Pass Mention Substandard Non-accrual Commercial Commercial and industrial $ 415,064 $ 3,347 $ 5,297 $ 827 Agricultural 61,637 2,283 — 1,441 Commercial Real Estate Farm 89,297 2,209 694 1,340 Hotel 88,166 — 2,983 64 Construction and development 74,811 3,600 2,287 31 Other 752,063 9,087 7,365 2,141 Total $ 1,481,038 $ 20,526 $ 18,626 $ 5,844
Schedule of performing/non performing loans by category of loans	September 30, 2017 Performing Watch Substandard Commercial Commercial and industrial $ 38,536 $ — $ 38 Agricultural 7,984 — 66 Commercial Real Estate Farm 15,776 — 150 Construction and development 20,014 — — Other 83,929 — 494 Total $ 166,239 $ — $ 748 December 31, 2016 Performing Watch Substandard Commercial Commercial and industrial $ 36,502 $ — $ 55 Agricultural 7,916 — 190 Commercial Real Estate Farm 18,260 — 7 Construction and development 21,778 — 91 Other 85,254 90 1,078 Total $ 169,710 $ 90 $ 1,421 September 30, 2017 Performing Watch Substandard Residential 1-4 family $ 689,607 $ 1,965 $ 2,591 Home equity 300,626 126 580 Total $ 990,233 $ 2,091 $ 3,171 September 30, 2017 Performing Substandard Loss Consumer Direct $ 65,356 $ 11 $ 914 Indirect 204 — — Total $ 65,560 $ 11 $ 914 December 31, 2016 Performing Watch Substandard Residential 1-4 family $ 603,102 $ 2,002 $ 3,262 Home equity 283,096 137 914 Total $ 886,198 $ 2,139 $ 4,176 December 31, 2016 Performing Substandard Loss Consumer Direct $ 61,508 $ 4 $ 62 Indirect 331 — — Total $ 61,839 $ 4 $ 62
Purchased credit impaired loans for which it was probable that all contractually required payments would not be collected	September 30, December 31, 2017 2016 Commercial $ 15,733 $ 10,817 1-4 Family 2,380 2,399 Outstanding Balance $ 18,113 $ 13,216 Carrying amount, net of allowance of $203 and $0 $ 11,245 $ 8,954

OTHER REAL ESTATE OWNED (Tables

OTHER REAL ESTATE OWNED (Tables)	9 Months Ended
	Sep. 30, 2017
OTHER REAL ESTATE OWNED
Schedule of activity in other real estate owned	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Beginning Balance $ 2,072 $ $ 1,875 $ Transfer to other real estate owned 362 564 1,470 1,547 Sale — Out of other real estate owned (845) (1,441) (1,936) (2,841) Acquisition — — 227 1,668 Write-down (21) (61) (68) (91) Ending Balance $ 1,568 $ 2,242 $ 1,568 $ 2,242
Schedule of activity in the valuation account for other real estate	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Beginning Balance — $ (237) $ (234) $ (236) $ (217) Impairments during year (21) (61) (68) (91) Recovery on impairments 20 5 66 18 Ending Balance — $ (238) $ (290) $ (238) $ (290)
Schedule of net loss on OREO activity which is included in non-interest income and expenses related to foreclosed assets	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Write-downs $ 21 $ 61 $ 68 $ 91 Losses/(gains)on sales (65) (128) (294) (344) Net loss/(gain) $ (44) $ (67) $ (226) $ (253) Operating expenses $ 24 $ 46 $ 106 $ 103

DEPOSITS & REPURCHASE AGREEME24

DEPOSITS & REPURCHASE AGREEMENTS (Tables)	9 Months Ended
	Sep. 30, 2017
DEPOSITS & REPURCHASE AGREEMENTS
Schedule of deposits	September 30, December 31, 2017 2016 Non-interest-bearing demand $ 838,490 $ Interest-bearing demand 1,202,796 Savings 842,333 Certificates of deposit of $250 or more 121,353 Other certificates and time deposits 417,015 Total deposits $ 3,421,987 $

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2017
EARNINGS PER SHARE
Schedule of earnings per common share (EPS) computation	Earnings per common share (EPS) were computed as follows: 2017 2016 Net Average Share Net Average Share Three Months Ended September 30, Income Shares Amount Income Shares Amount Basic Earnings Per Common Share Net income $ 11,116 25,580,316 $ 0.43 $ 11,696 24,016,237 $ 0.49 Effect of dilutive warrants 321,370 202,238 Dilutive effect of stock compensation 70,513 103,137 Diluted Earnings Per Common Share Net income attributable to common shareholders and assumed conversions $ 11,116 25,972,199 $ 0.43 $ 11,696 24,321,612 $ 0.48 There were no antidilutive options in the three month periods ending September 30, 2017 or 2016. 2017 2016 Net Average Share Net Average Share Nine Months Ended September 30, Income Shares Amount Income Shares Amount Basic Earnings Per Common Share Net income $ 32,843 24,951,821 $ 1.32 $ 26,579 22,786,961 $ Effect of dilutive warrants Effect of dilutive stock options Diluted Earnings Per Common Share Net income attributable to common shareholders and assumed conversions $ $ 1.30 $ $ 1.15

FAIR VALUE (Tables)

FAIR VALUE (Tables)	9 Months Ended
	Sep. 30, 2017
FAIR VALUE
Schedule of assets and liabilities measured at fair value on a recurring basis	Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Carrying Identical Assets Inputs Inputs (Dollars in thousands) Value (Level 1) (Level 2) (Level 3) Financial Assets Investment securities available-for-sale U. S. government agency $ 116 $ — $ 116 $ — States and municipal 389,126 — 379,646 9,480 Mortgage-backed securities — residential — Government Sponsored Entity 402,226 — 402,226 — Collateralized mortgage obligations — Government Sponsored Entity 282,757 — 282,757 — Equity securities 4,670 4,670 — — Other securities 5,008 — — 5,008 Total investment securities available-for-sale $ 1,083,903 $ 4,670 $ 1,064,745 $ 14,488 Mortgage banking derivative $ 854 — $ 854 — Interest rate swap asset $ 3,666 — $ 3,666 — Interest rate swap liability $ (3,666) — $ (3,666) — Fair Value Measurements at December 31, 2016 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Carrying Identical Assets Inputs Inputs (Dollars in thousands) Value (Level 1) (Level 2) (Level 3) Financial Assets Investment securities available-for-sale U. S. government agency $ 955 $ — $ 955 $ — States and municipal 369,286 — 359,166 10,120 Mortgage-backed securities — residential — Government Sponsored Entity 446,630 — 446,630 — Collateralized mortgage obligations — Government Sponsored Entity 179,401 — 179,401 — Equity securities 4,670 4,670 — — Other securities 6,598 — — 6,598 Total investment securities available-for-sale $ 1,007,540 $ 4,670 $ 986,152 $ 16,718 Mortgage banking derivative $ 648 — $ 648 — Interest rate swap asset $ 3,003 — $ 3,003 — Interest rate swap liability $ (3,003) — $ (3,003) —
Schedule of reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	Three months ended September 30: States and municipal 2017 2016 Beginning balance, July 1 $ $ Total gains or losses (realized / unrealized) Included in other comprehensive income (7) 6 Settlements (185) (182) Ending balance, September 30 $ 9,480 $ 10,254 Other securities 2017 2016 Beginning balance, July 1 $ 5,009 $ Total gains or losses (realized / unrealized) Settlement through acquisition — — Included in other comprehensive income (1) (2) Ending balance, September 30 $ 5,008 $ 6,599 The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine month periods ended September 30, 2017 and 2016: States and municipal 2017 2016 Beginning balance, January 1 $ $ 10,858 Total gains or losses (realized / unrealized) Included in other comprehensive income (12) 8 Settlements (628) (612) Ending balance, September 30 $ 9,480 $ 10,254 Other securities 2017 2016 Beginning balance, January 1 $ 6,598 $ Total gains or losses (realized / unrealized) Settlement through acquisition (1,590) — Included in other comprehensive income — 75 Ending balance, September 30 $ 5,008 $ 6,599
Schedule of assets and liabilities measured at fair value on a non-recurring basis	Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable September 30, Identical Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Impaired loans Commercial and industrial $ 855 $ 855 Agricultural 779 779 Hotel 2,715 2,715 Farm real estate 794 794 Other real estate 1,746 1,746 Total impaired loans $ 6,889 $ 6,889 Impaired servicing rights $ 928 $ 928 Fair Value Measurements at December 31, 2016 Using: Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable December 31, Identical Assets Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Impaired loans Commercial and industrial $ 260 $ 260 Agricultural 972 972 Farm real estate 745 745 Other real estate 560 560 Total impaired loans $ 2,537 $ 2,537 Impaired servicing rights $ 1,083 $ 1,083
Schedule of breakdown of impaired loans by portfolio class	Gross Valuation Balance Allowance Net Commercial and industrial $ 2,197 $ 1,342 $ 855 Agricultural 1,484 705 779 Hotel 2,918 203 2,715 Farm real estate 1,344 550 794 Other real estate 2,521 775 1,746 Ending Balance $ 10,464 $ 3,575 $ 6,889
Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis	Fair Value Valuation Unobservable Range/ September 30, 2017 (in thousands) Technique(s) Input(s) Average Impaired Loans: Commercial and industrial $ 855 Sales comparison approach Adjustment for differences between comparable sales 19% - 30% 24% Avg Agricultural 779 Sales comparison approach Adjustment for differences between comparable sales 16%-25% 24% Avg Hotel 2,715 Sales comparison approach Adjustment for differences between comparable sales 40% 40% Avg Farm real estate 794 Sales comparison approach Adjustment for differences between comparable sales 16%-25% 22% Avg Other real estate 1,746 Sales comparison approach Adjustment for differences between comparable sales, type of property, current status of property 19% - 40% 27% Avg $ 6,889 Mortgage servicing rights $ 928 Cash flow analysis Discount rate 10% Fair Value Valuation Unobservable Range/ December 31, 2016 (in thousands) Technique(s) Input(s) Average Impaired Loans: Commercial and industrial $ Sales comparison approach Adjustment for differences between comparable sales 10% - 30% 18% Avg Agricultural Sales comparison approach Adjustment for differences between comparable sales 10% 10% Avg Farm real estate 745 Sales comparison approach Adjustment for differences between comparable sales 10% 10% Avg Other real estate 560 Sales comparison approach Adjustment for differences between comparable sales, type of property, current status of property 16% - 31% 27% Avg $ 2,537 Mortgage servicing rights $ 1,083 Cash flow analysis Discount rate 10%
Schedule of carrying amounts and estimated fair values of financial instruments	Carrying September 30, 2017 Amount Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 70,277 $ 63,762 $ 6,515 $ $ 70,277 Interest bearing time deposits 2,160 2,160 2,160 Loans including loans held for sale, net 3,026,807 9,197 3,034,068 3,043,265 FHLB and other stock 27,972 N/A Interest receivable 14,493 5,703 8,790 14,493 Liabilities Deposits (3,421,987) (838,490) (2,580,936) (3,419,426) Other borrowings (271,412) (271,412) (271,412) FHLB advances (310,982) (309,196) (309,196) Interest payable (1,292) (1,292) (1,292) Subordinated debentures (48,176) (41,021) (41,021) Carrying December 31, 2016 Amount Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 86,552 $ 75,778 $ 10,774 $ $ 86,552 Interest bearing time deposits 1,960 1,960 1,960 Loans including loans held for sale, net 2,639,046 12,598 2,662,431 2,675,029 FHLB and other stock 21,693 N/A Interest receivable 12,576 5,234 7,342 12,576 Liabilities Deposits (3,110,871) (767,159) (2,340,824) (3,107,983) Other borrowings (209,672) (209,686) (209,686) FHLB advances (249,658) (248,944) (248,944) Interest payable (642) (642) (642) Subordinated debentures (41,239) (34,084) (34,084)

REGULATORY CAPITAL (Tables)

REGULATORY CAPITAL (Tables)	9 Months Ended
	Sep. 30, 2017
REGULATORY CAPITAL
Schedule of actual and required capital amounts and ratios	Required for To Be Actual Adequate Capital Well Capitalized September 30, 2017 Amount Ratio Amount Ratio Amount Ratio MainSource Financial Group Total capital (to risk-weighted assets) $ 442,560 13.5 % $ 263,158 % N/A N/A Tier 1 capital (to risk-weighted assets) 420,017 12.8 197,369 N/A N/A Common equity Tier 1 capital (to risk-weighted assets) 372,091 11.3 148,026 N/A N/A Tier 1 capital (to average assets) 420,017 9.5 177,717 N/A N/A MainSource Bank Total capital (to risk-weighted assets) $ 446,375 13.6 % $ 263,215 % $ 329,019 % Tier 1 capital (to risk-weighted assets) 423,832 12.9 197,411 263,215 Common equity Tier 1 capital (to risk-weighted assets) 423,832 12.9 148,058 213,862 Tier 1 capital (to average assets) 423,832 9.6 177,436 221,795 Required for To Be Actual Adequate Capital Well Capitalized December 31, 2016 Amount Ratio Amount Ratio Amount Ratio MainSource Financial Group Total capital (to risk-weighted assets) $ % $ % N/A N/A Tier 1 capital (to risk-weighted assets) N/A N/A Common equity Tier 1 capital (to risk-weighted assets) N/A N/A Tier 1 capital (to average assets) N/A N/A MainSource Bank Total capital (to risk-weighted assets) $ % $ % $ % Tier 1 capital (to risk-weighted assets) Common equity Tier 1 capital (to risk-weighted assets) Tier 1 capital (to average assets)

DERIVATIVES (Tables)

DERIVATIVES (Tables)	9 Months Ended
	Sep. 30, 2017
DERIVATIVES
Schedule of fair value hedges	September 30, 2017 December 31, 2016 Notional Notional Amount Fair Value Amount Fair Value Included in Other Assets: Interest Rate Swaps at Fair Value $ 186,209 $ 3,666 $ 143,300 $ 3,003 Included in Other Liabilities: Interest Rate Swaps at Fair Value $ 186,209 $ 3,666 $ 143,300 $ 3,003
Summary of the effect of derivative instruments on the Consolidated Statement of Income	The effect of derivative instruments on the Consolidated Statement of Income is presented below: Three Months Ended September 30, 2017 2016 Interest Rate Swaps - Fee Income Included in Other Income / (Expense) $ 209 $ 257 Nine Months Ended September 30, 2017 2016 Interest Rate Swaps – Fee Income Included in Other Income / (Expense) $ 612 $ 766

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	9 Months Ended
	Sep. 30, 2017
ACQUISITIONS
Summary of the amounts of assets acquired and liabilities assumed recognized at the acquisition date	Consideration Cash $ 10,911 Equity Instruments 47,969 Fair Value of Total Consideration $ 58,880 Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed Cash and cash equivalents $ 15,972 Securities 45,498 Federal Home Loan Bank stock 3,418 Loans 427,762 Premises and equipment 9,863 Core deposit intangibles 6,263 Bank owned life insurance 6,571 Other assets 9,057 Total assets acquired $ 524,404 Deposits $ 366,871 Federal Home Loan Bank advances 43,804 Subordinated debt 17,111 Other liabilities 71,406 Total liabilities assumed $ 499,192 Total identifiable net assets $ 25,212 Goodwill $ 33,668
Pro forma information	3 months 3 months 9 months 9 months 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Net interest income $ 37,400 $ 35,317 $ 110,947 $ 98,452 Net income 12,133 13,100 38,801 34,200 Basic earnings per share 0.47 0.51 1.51 1.40 Diluted earnings per share 0.47 0.51 1.49 1.39

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
BASIS OF PRESENTATION
Income tax expense	$ 3,683		$ 4,117	$ 10,317	$ 8,172
Accounting Standards Update 2016-09
BASIS OF PRESENTATION
Income tax expense		$ (402)
Cumulative adjustment to retained earnings				$ 0

STOCK PLANS AND STOCK BASED C31

STOCK PLANS AND STOCK BASED COMPENSATION - Stock Incentive Plans (Details) - shares	Jan. 19, 2015	Apr. 26, 2007
2015 Plan
Stock-based compensation
Number of shares reserved for issuance under the plan	1,000,000
2007 Stock Incentive Plan
Stock-based compensation
Number of shares reserved for issuance under the plan		650,000

STOCK PLANS AND STOCK BASED C32

STOCK PLANS AND STOCK BASED COMPENSATION - Activity in Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Shares
Outstanding, beginning of year (in shares)		193,114
Granted (in shares)		0	0
Exercised (in shares)		(86,556)
Forfeited or expired (in shares)		(400)
Outstanding at end of period (in shares)		106,158		193,114
Exercisable end of period (in shares)		94,754
Weighted Average Exercise Price
Outstanding, beginning of year (in dollars per share)		$ 12.09
Granted (in dollars per share)	$ 34.15
Exercised (in dollars per share)		12.59
Forfeited or expired (in dollars per share)		13.67
Outstanding, period end (in dollars per share)		11.67		$ 12.09
Exercisable at end of period (in dollars per share)		$ 11.13
Stock options vested and currently exercisable
Outstanding at end of period, Weighted average remaining contractual term (years)		4 years 4 months 24 days
Outstanding at end of period, Aggregate intrinsic value		$ 2,568
Exercisable at end of period, Weighted average remaining contractual term (years)		4 years 1 month 6 days
Exercisable at end of period, Aggregate intrinsic value		$ 2,344
Stock options
Shares
Exercisable end of period (in shares)		94,754		181,710
Weighted Average Exercise Price
Exercisable at end of period (in dollars per share)		$ 11.13		$ 11.83
Stock options vested and currently exercisable
Exercisable at end of period, Weighted average remaining contractual term (years)		4 years 1 month 6 days		3 years 9 months 18 days
Exercisable at end of period, Aggregate intrinsic value		$ 2,344		$ 4,101

STOCK PLANS AND STOCK BASED C33

STOCK PLANS AND STOCK BASED COMPENSATION - Intrinsic Value of Stock Options and Additional Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Additional disclosures
Compensation expense	$ 70	$ 103	$ 241	$ 282
Options granted			0	0
Stock options
Additional disclosures
Compensation expense	$ 9	$ 21	$ 24	$ 64
Unrecognized stock option compensation expense related to unvested awards
October 2017 - December 2017			$ 7

STOCK PLANS AND STOCK BASED C34

STOCK PLANS AND STOCK BASED COMPENSATION - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016
Shares
Granted (in shares)	0	8,204		0
Additional disclosures
Compensation expense	$ 70			$ 103			$ 241	$ 282
Restricted stock
Shares
Nonvested at the beginning of the period (in shares)			104,319				104,319
Granted (in shares)							30,302
Vested (in shares)							(28,432)
Forfeited (in shares)							(1,250)
Nonvested at the end of the period (in shares)	104,939						104,939
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)			$ 20.03				$ 20.03
Granted (in dollars per share)							34.38
Vested (in dollars per share)							16.31
Forfeited (in dollars per share)							23.62
Nonvested at the end of the period (in dollars per share)	$ 25.14						$ 25.14
Restricted stock | 2015 Plan
Additional disclosures
Unrecognized compensation costs	$ 1,553						$ 1,553
Weighted-average period of expected recognition of the cost							2 years 2 months 12 days
Compensation expense	$ 175			$ 160			$ 588	$ 512
Restricted stock | Executive officer and other employees
Stock-based compensation
Vesting percentage of stock awards on third anniversary of grant date	100.00%						100.00%
Shares
Granted (in shares)		13,500	12,802		16,000
Weighted Average Grant Date Fair Value
Granted (in dollars per share)			$ 34.99
Common Stock | Executive officer and other employees
Shares
Granted (in shares)	4,000					24,152
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 34.82	$ 33.68			$ 22.47	$ 21.47

STOCK PLANS AND STOCK BASED C35

STOCK PLANS AND STOCK BASED COMPENSATION - Performance Measures and Additional Disclosures (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016
Additional disclosures
Shares of common stock granted	0	8,204		0
Shares granted (in dollars per share)		$ 34.15
Compensation expense	$ 70			$ 103			$ 241	$ 282
Performance units | Executive officers
Performance Measures
Performance period							3 years
Granted (in dollars per share)			$ 35.04			$ 21.41
Return on assets criteria (as a percent)							50.00%
Total shareholder return criteria (as a percent)							25.00%
Earnings per share criteria (as a percent)							25.00%
Additional disclosures
Vesting period							3 years
Shares of common stock granted	0	0	11,302	0	0	16,152
Compensation expense	$ 76			$ 55			$ 165	$ 137
Unrecognized compensation costs	$ 506						$ 506
Restricted stock
Performance Measures
Granted (in dollars per share)							$ 34.38
Additional disclosures
Shares of common stock granted							30,302
Restricted stock | Directors
Additional disclosures
Shares of common stock granted			0
Quarterly vesting percentage of stock awards	25.00%						25.00%
Threshold | Performance units | Executive officers
Performance Measures
Performance levels (as a percent)							0.00%
Target | Performance units | Executive officers
Performance Measures
Performance levels (as a percent)							100.00%
Superior | Performance units | Executive officers
Performance Measures
Performance levels (as a percent)							150.00%

SECURITIES - Amortized Cost and

SECURITIES - Amortized Cost and Fair Value of Securities Available for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Available for sale securities
Amortized Cost	$ 1,072,250	$ 1,002,803
Gross Unrealized Gains	16,521	13,641
Gross Unrealized Losses	(4,868)	(8,904)
Fair Value	1,083,903	1,007,540
U. S. government agency
Available for sale securities
Amortized Cost	115	951
Gross Unrealized Gains	1	4
Fair Value	116	955
State and municipal
Available for sale securities
Amortized Cost	376,533	361,335
Gross Unrealized Gains	13,490	10,799
Gross Unrealized Losses	(897)	(2,848)
Fair Value	389,126	369,286
Mortgage-backed securities-residential (Government Sponsored Entity)
Available for sale securities
Amortized Cost	402,987	450,006
Gross Unrealized Gains	1,831	1,253
Gross Unrealized Losses	(2,592)	(4,629)
Fair Value	402,226	446,630
Collateralized mortgage obligations (Government Sponsored Entity)
Available for sale securities
Amortized Cost	283,012	179,314
Gross Unrealized Gains	1,124	1,514
Gross Unrealized Losses	(1,379)	(1,427)
Fair Value	282,757	179,401
Equity securities
Available for sale securities
Amortized Cost	4,670	4,670
Fair Value	4,670	4,670
Other securities
Available for sale securities
Amortized Cost	4,933	6,527
Gross Unrealized Gains	75	71
Fair Value	$ 5,008	$ 6,598

SECURITIES - Contractual Maturi

SECURITIES - Contractual Maturities of Securities Available for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Available for Sale, Amortized Cost
Within one year	$ 18,434
One through five years	89,659
Six through ten years	97,431
After ten years	176,057
Equity securities	4,670
Amortized Cost	1,072,250	$ 1,002,803
Available for Sale, Fair Value
Within one year	18,666
One through five years	93,452
Six through ten years	101,640
After ten years	180,492
Equity securities	4,670
Fair Value	1,083,903	1,007,540
Mortgage-backed securities-residential (Government Sponsored Entity)
Available for Sale, Amortized Cost
Debt securities without single maturity date	402,987
Amortized Cost	402,987	450,006
Available for Sale, Fair Value
Debt securities without single maturity date	402,226
Fair Value	402,226	446,630
Collateralized mortgage obligations (Government Sponsored Entity)
Available for Sale, Amortized Cost
Debt securities without single maturity date	283,012
Amortized Cost	283,012	179,314
Available for Sale, Fair Value
Debt securities without single maturity date	282,757
Fair Value	$ 282,757	$ 179,401

SECURITIES - Additional Informa

SECURITIES - Additional Information - (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Available for sale securities
Gross proceeds from sales of securities	$ 956	$ 7,615	$ 56,441	$ 85,738
Gross gains realized on sales	1	23	153	144
Gross losses realized on sales	10	0	140	0
Tax provision related to net realized gains	$ (3)	$ 8	$ 5	$ 50

SECURITIES - Securities in an U

SECURITIES - Securities in an Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Securities in a continuous unrealized loss position with unrealized losses presented by length of time
Less than 12 months, Fair Value	$ 356,322	$ 509,184
Less than 12 months, Unrealized Losses	(3,740)	(8,679)
12 months or longer, Fair Value	36,444	8,518
12 months or longer, Unrealized Losses	(1,128)	(225)
Total Fair Value	392,766	517,702
Total Unrealized Losses	(4,868)	(8,904)
State and municipal
Securities in a continuous unrealized loss position with unrealized losses presented by length of time
Less than 12 months, Fair Value	36,363	95,822
Less than 12 months, Unrealized Losses	(517)	(2,848)
12 months or longer, Fair Value	10,073
12 months or longer, Unrealized Losses	(380)
Total Fair Value	46,436	95,822
Total Unrealized Losses	(897)	(2,848)
Mortgage-backed securities-residential (Government Sponsored Entity)
Securities in a continuous unrealized loss position with unrealized losses presented by length of time
Less than 12 months, Fair Value	187,075	335,668
Less than 12 months, Unrealized Losses	(2,359)	(4,629)
12 months or longer, Fair Value	8,791
12 months or longer, Unrealized Losses	(233)
Total Fair Value	195,866	335,668
Total Unrealized Losses	(2,592)	(4,629)
Collateralized mortgage obligations (Government Sponsored Entity)
Securities in a continuous unrealized loss position with unrealized losses presented by length of time
Less than 12 months, Fair Value	132,884	77,694
Less than 12 months, Unrealized Losses	(864)	(1,202)
12 months or longer, Fair Value	17,580	8,518
12 months or longer, Unrealized Losses	(515)	(225)
Total Fair Value	150,464	86,212
Total Unrealized Losses	$ (1,379)	$ (1,427)

SECURITIES - Other-Than-Tempora

SECURITIES - Other-Than-Temporary Impairment and Other Disclosures (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)item	Dec. 31, 2016USD ($)
Other-Than-Temporary-Impairment
Number of general segments segregated in investment securities portfolio | item	2
Number of security in the portfolio | item	990
Number of portfolio security in unrealized loss position | item	143
Market value of securities in unrealized loss position	$ 392,766	$ 517,702
Unrealized losses of collateralized mortgage obligation securities	4,868	8,904
State and municipal
Other-Than-Temporary-Impairment
Market value of securities in unrealized loss position	46,436	95,822
Unrealized losses of collateralized mortgage obligation securities	897	2,848
Mortgage-backed securities
Other-Than-Temporary-Impairment
Unrealized losses of collateralized mortgage obligation securities	2,592
Collateralized mortgage obligations (Government Sponsored Entity)
Other-Than-Temporary-Impairment
Market value of securities in unrealized loss position	150,464	86,212
Unrealized losses of collateralized mortgage obligation securities	1,379	$ 1,427
Other than temporary impairment on available for sale securities	$ 0

LOANS AND ALLOWANCE - (Details)

LOANS AND ALLOWANCE - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Loans and allowance
Total loans	$ 3,047,250		$ 2,651,673
Allowance for loan losses	(22,543)	$ (22,306)	(22,499)	$ (21,828)	$ (21,468)	$ (22,020)
Net loans	3,024,707		2,629,174
Commercial
Loans and allowance
Total loans	559,995		534,559
Allowance for loan losses	(10,148)	(9,348)	(9,654)	(8,590)	(6,940)	(6,511)
Commercial | Commercial and industrial
Loans and allowance
Total loans	496,523		461,092
Commercial | Agricultural
Loans and allowance
Total loans	63,472		73,467
Commercial real estate
Loans and allowance
Total loans	1,425,275		1,162,696
Allowance for loan losses	(7,610)	(7,866)	(7,706)	(7,920)	(8,780)	(10,702)
Commercial real estate | Farm
Loans and allowance
Total loans	103,783		111,807
Commercial real estate | Hotel
Loans and allowance
Total loans	120,829		91,213
Commercial real estate | Construction and development
Loans and allowance
Total loans	98,906		102,598
Commercial real estate | Other
Loans and allowance
Total loans	1,101,757		857,078
Residential
Loans and allowance
Total loans	995,495		892,513
Allowance for loan losses	(3,788)	(4,021)	(4,247)	(4,404)	(4,677)	(3,859)
Residential | 1-4 family
Loans and allowance
Total loans	694,163		608,366
Residential | Home equity
Loans and allowance
Total loans	301,332		284,147
Consumer
Loans and allowance
Total loans	66,485		61,905
Allowance for loan losses	(997)	$ (1,071)	(892)	$ (914)	$ (1,071)	$ (948)
Consumer | Direct
Loans and allowance
Total loans	66,281		61,574
Consumer | Indirect
Loans and allowance
Total loans	$ 204		$ 331

LOANS AND ALLOWANCE - Investmen

LOANS AND ALLOWANCE - Investment by portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans and allowance
Financing receivables	$ 718,211	$ 422,161
Remaining discount on financing receivables	13,024	7,313
Non accretable yield	4,861	4,262
Commercial and industrial
Loans and allowance
Financing receivables	17,876	13,875
Agricultural
Loans and allowance
Financing receivables	772	872
Farm
Loans and allowance
Financing receivables	3,585	389
Hotel
Loans and allowance
Financing receivables	13,066	2,983
Construction and development
Loans and allowance
Financing receivables	22,012	16,634
Other real estate
Loans and allowance
Financing receivables	356,651	164,505
1-4 family
Loans and allowance
Financing receivables	274,732	206,044
Home equity
Loans and allowance
Financing receivables	26,692	14,342
Direct
Loans and allowance
Financing receivables	$ 2,825	$ 2,517

LOANS AND ALLOWANCE - Activity

LOANS AND ALLOWANCE - Activity in the allowance for loan losses - (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Allowance for loan losses
Balance at the beginning of the period	$ 22,306	$ 21,468	$ 22,499	$ 22,020
Provision charged to expense	600	150	700	855
Losses charged off	(1,321)	(1,209)	(4,479)	(4,979)
Recoveries	958	1,419	3,823	3,932
Balance at the end of the period	22,543	21,828	22,543	21,828
Commercial
Allowance for loan losses
Balance at the beginning of the period	9,348	6,940	9,654	6,511
Provision charged to expense	801	1,525	664	2,352
Losses charged off	(27)	(23)	(624)	(650)
Recoveries	26	148	454	377
Balance at the end of the period	10,148	8,590	10,148	8,590
Commercial real estate
Allowance for loan losses
Balance at the beginning of the period	7,866	8,780	7,706	10,702
Provision charged to expense	(278)	(1,225)	(527)	(3,314)
Losses charged off	(99)	(33)	(556)	(614)
Recoveries	121	398	987	1,146
Balance at the end of the period	7,610	7,920	7,610	7,920
Residential
Allowance for loan losses
Balance at the beginning of the period	4,021	4,677	4,247	3,859
Provision charged to expense	(58)	(257)	(47)	1,214
Losses charged off	(286)	(122)	(739)	(967)
Recoveries	111	106	327	298
Balance at the end of the period	3,788	4,404	3,788	4,404
Consumer
Allowance for loan losses
Balance at the beginning of the period	1,071	1,071	892	948
Provision charged to expense	135	107	610	603
Losses charged off	(909)	(1,031)	(2,560)	(2,748)
Recoveries	700	767	2,055	2,111
Balance at the end of the period	$ 997	$ 914	$ 997	$ 914

LOANS AND ALLOWANCE - Allowance

LOANS AND ALLOWANCE - Allowance for loan losses and the recorded investment by portfolio segment and based on impairment method - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Allowance for loan losses
Ending Balance individually evaluated for impairment	$ 3,778		$ 1,800
Ending Balance collectively evaluated for impairment	18,765		20,699
Total ending allowance balance	22,543	$ 22,306	22,499	$ 21,828	$ 21,468	$ 22,020
Loans
Ending Balance individually evaluated for impairment			21,197
Ending Balance collectively evaluated for impairment	3,014,743		2,621,522
Total ending loan balance excluding accrued interest	3,047,250		2,651,673
Interest Receivable	8,772		7,342
Excluding loans acquired with deteriorated credit quality
Allowance for loan losses
Ending Balance individually evaluated for impairment	3,575		1,800
Loans
Ending Balance individually evaluated for impairment	19,697
Acquired with deteriorated credit quality
Allowance for loan losses
Total ending allowance balance	203
Loans
Total ending loan balance excluding accrued interest	12,810		8,954
Commercial
Allowance for loan losses
Ending Balance collectively evaluated for impairment	8,101		8,756
Total ending allowance balance	10,148	9,348	9,654	8,590	6,940	6,511
Loans
Ending Balance individually evaluated for impairment			2,705
Ending Balance collectively evaluated for impairment	556,158		531,854
Total ending loan balance excluding accrued interest	559,995		534,559
Commercial | Excluding loans acquired with deteriorated credit quality
Allowance for loan losses
Ending Balance individually evaluated for impairment	2,047		898
Loans
Ending Balance individually evaluated for impairment	3,837
Commercial real estate
Allowance for loan losses
Ending Balance collectively evaluated for impairment	6,023		6,951
Total ending allowance balance	7,610	7,866	7,706	7,920	8,780	10,702
Loans
Ending Balance individually evaluated for impairment			7,904
Ending Balance collectively evaluated for impairment	1,406,948		1,147,536
Total ending loan balance excluding accrued interest	1,425,275		1,162,696
Commercial real estate | Excluding loans acquired with deteriorated credit quality
Allowance for loan losses
Ending Balance individually evaluated for impairment	1,384		755
Loans
Ending Balance individually evaluated for impairment	7,082
Commercial real estate | Acquired with deteriorated credit quality
Allowance for loan losses
Total ending allowance balance	203
Loans
Total ending loan balance excluding accrued interest	11,245		7,256
Residential
Allowance for loan losses
Ending Balance collectively evaluated for impairment	3,644		4,100
Total ending allowance balance	3,788	4,021	4,247	4,404	4,677	3,859
Loans
Ending Balance individually evaluated for impairment			10,458
Ending Balance collectively evaluated for impairment	986,113		880,357
Total ending loan balance excluding accrued interest	995,495		892,513
Residential | Excluding loans acquired with deteriorated credit quality
Allowance for loan losses
Ending Balance individually evaluated for impairment	144		147
Loans
Ending Balance individually evaluated for impairment	7,817
Residential | Acquired with deteriorated credit quality
Loans
Total ending loan balance excluding accrued interest	1,565		1,698
Consumer
Allowance for loan losses
Ending Balance collectively evaluated for impairment	997		892
Total ending allowance balance	997	$ 1,071	892	$ 914	$ 1,071	$ 948
Loans
Ending Balance individually evaluated for impairment			130
Ending Balance collectively evaluated for impairment	65,524		61,775
Total ending loan balance excluding accrued interest	66,485		$ 61,905
Consumer | Excluding loans acquired with deteriorated credit quality
Loans
Ending Balance individually evaluated for impairment	$ 961

LOANS AND ALLOWANCE - Allowan45

LOANS AND ALLOWANCE - Allowance for loans collectively evaluated for impairment - (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Activity in the allowance for loan losses and recorded investment of loans and allowances
Allowance that includes a probability of default for subject loans	$ 1,146	$ 2,697
Purchased credit impaired loans	11,245	8,954
Non accretable yield	4,861	4,262
Allowance for loan losses	(22,543)	$ (22,499)	$ (22,306)	$ (21,828)	$ (21,468)	$ (22,020)
Cheviot Financial Corp.
Activity in the allowance for loan losses and recorded investment of loans and allowances
Purchased credit impaired loans	25,417
Non accretable yield	6,404
Accretable yield	526
Allowance for loan losses	$ 203

LOANS AND ALLOWANCE - Loan indi

LOANS AND ALLOWANCE - Loan individually evaluated for impairment by class of loans - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans individually evaluated for impairment and average balance of impaired loans
Performing troubled debt restructurings excluded as allowed	$ 394	$ 1,925
Unpaid Principal Balance
With an allowance recorded	13,721	6,272
With no related allowance recorded	16,066	17,236
Total impaired loans	29,787	23,508
Recorded Investment
With an allowance recorded	12,253	6,141
With no related allowance recorded	11,361	13,131
Total impaired loans	23,614	19,272
Allowance for Loan Losses Allocated
With an allowance recorded	3,778	1,800
Total impaired loans	3,778	1,800
Commercial | Commercial and industrial
Unpaid Principal Balance
With an allowance recorded	2,231	719
With no related allowance recorded	490	1,028
Recorded Investment
With an allowance recorded	2,197	689
With no related allowance recorded	28	322
Allowance for Loan Losses Allocated
With an allowance recorded	1,342	429
Commercial | Agricultural
Unpaid Principal Balance
With an allowance recorded	1,484	1,441
With no related allowance recorded	129	254
Recorded Investment
With an allowance recorded	1,484	1,441
With no related allowance recorded	129	253
Allowance for Loan Losses Allocated
With an allowance recorded	705	469
Commercial real estate | Farm
Unpaid Principal Balance
With an allowance recorded	1,346	1,106
With no related allowance recorded	575	506
Recorded Investment
With an allowance recorded	1,344	1,105
With no related allowance recorded	310	241
Allowance for Loan Losses Allocated
With an allowance recorded	550	360
Commercial real estate | Hotel
Unpaid Principal Balance
With an allowance recorded	4,196
With no related allowance recorded		64
Recorded Investment
With an allowance recorded	2,918
With no related allowance recorded		64
Allowance for Loan Losses Allocated
With an allowance recorded	203
Commercial real estate | Construction and development
Unpaid Principal Balance
With no related allowance recorded	37	239
Recorded Investment
With no related allowance recorded	37	162
Commercial real estate | Other
Unpaid Principal Balance
With an allowance recorded	3,303	1,900
With no related allowance recorded	4,345	3,558
Recorded Investment
With an allowance recorded	3,211	1,755
With no related allowance recorded	2,309	2,652
Allowance for Loan Losses Allocated
With an allowance recorded	834	395
Residential | 1-4 family
Unpaid Principal Balance
With an allowance recorded	1,062	1,091
With no related allowance recorded	7,690	9,215
Recorded Investment
With an allowance recorded	1,000	1,046
With no related allowance recorded	6,109	7,432
Allowance for Loan Losses Allocated
With an allowance recorded	143	146
Residential | Home equity
Unpaid Principal Balance
With an allowance recorded	99	15
With no related allowance recorded	1,734	2,233
Recorded Investment
With an allowance recorded	99	105
With no related allowance recorded	1,479	1,875
Allowance for Loan Losses Allocated
With an allowance recorded	1	1
Consumer | Direct
Unpaid Principal Balance
With no related allowance recorded	1,066	139
Recorded Investment
With no related allowance recorded	$ 960	$ 130

LOANS AND ALLOWANCE - Loan Impa

LOANS AND ALLOWANCE - Loan Impairment average balance of impaired loans and interest income and cash basis interest - (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest Income Recognized
Interest Income Recognized	$ 55	$ 71	$ 212	$ 269
Cash Basis Income Recognized
Cash Basis Income Recognized	55	71	212	269
Average recorded investment
Average Balance	23,026	19,177	22,244	17,300
Commercial | Commercial and industrial
Interest Income Recognized
Interest Income Recognized	8	12	70	43
Cash Basis Income Recognized
Cash Basis Income Recognized	8	12	70	43
Average recorded investment
Average Balance	1,358	725	1,041	753
Commercial | Agricultural
Average recorded investment
Average Balance	1,622	1,640	1,701	824
Commercial real estate
Average recorded investment
Average Balance				155
Commercial real estate | Farm
Average recorded investment
Average Balance	1,656	1,357	1,588	830
Commercial real estate | Hotel
Average recorded investment
Average Balance	2,934	32	2,229	16
Commercial real estate | Construction and development
Average recorded investment
Average Balance	746	124	804
Commercial real estate | Other
Interest Income Recognized
Interest Income Recognized	9	35	83	152
Cash Basis Income Recognized
Cash Basis Income Recognized	9	35	83	152
Average recorded investment
Average Balance	4,984	4,791	4,641	4,898
Residential | 1-4 family
Interest Income Recognized
Interest Income Recognized	32	17	41	44
Cash Basis Income Recognized
Cash Basis Income Recognized	32	17	41	44
Average recorded investment
Average Balance	7,128	8,299	7,652	7,433
Residential | Home equity
Interest Income Recognized
Interest Income Recognized	5	4	15	20
Cash Basis Income Recognized
Cash Basis Income Recognized	5	4	15	20
Average recorded investment
Average Balance	1,624	2,083	1,811	2,270
Consumer | Direct
Interest Income Recognized
Interest Income Recognized	1	3	3	9
Cash Basis Income Recognized
Cash Basis Income Recognized	1	3	3	9
Average recorded investment
Average Balance	$ 974	$ 126	$ 777	121
Consumer | Indirect
Interest Income Recognized
Interest Income Recognized				1
Cash Basis Income Recognized
Cash Basis Income Recognized				$ 1

LOANS AND ALLOWANCE - Nonaccrua

LOANS AND ALLOWANCE - Nonaccrual and loans past due over 90 days - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	$ 20,781	$ 15,808
Past due over 90 days and still accruing	40	2,135
Cheviot Financial Corp.
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	6,877	3,564
Commercial | Commercial and industrial
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	2,225	882
Commercial | Agricultural
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	1,550	1,631
Commercial real estate | Farm
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	1,654	1,347
Commercial real estate | Hotel
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	2,918	64
Commercial real estate | Construction and development
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual		122
Past due over 90 days and still accruing		2,135
Commercial real estate | Other
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	4,431	3,219
Past due over 90 days and still accruing	40
Residential | 1-4 family
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	6,126	7,163
Residential | Home equity
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	939	1,273
Consumer | Direct
Recorded investment in nonaccrual and loans past due over 90 days still on accrual and aging of recorded investment in past due
Non-accrual	$ 938	$ 107

LOANS AND ALLOWANCE - Nonaccr49

LOANS AND ALLOWANCE - Nonaccrual and loans past due over 90 days still on accrual by class of loans - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	$ 3,047,250	$ 2,651,673
Total Past Due	16,868	23,234
Loans Not Past Due	3,030,382	2,628,439
30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	2,267	9,640
60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	2,503	2,229
Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	12,098	11,365
Commercial
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	559,995	534,559
Commercial | Commercial and industrial
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	496,523	461,092
Total Past Due	2,491	176
Loans Not Past Due	494,032	460,916
Commercial | Commercial and industrial | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	274
Commercial | Commercial and industrial | 60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	389
Commercial | Commercial and industrial | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	1,828	176
Commercial | Agricultural
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	63,472	73,467
Total Past Due	1,530	1,821
Loans Not Past Due	61,942	71,646
Commercial | Agricultural | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	34	215
Commercial | Agricultural | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	1,496	1,606
Commercial real estate
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	1,425,275	1,162,696
Commercial real estate | Farm
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	103,783	111,807
Total Past Due	1,564	1,324
Loans Not Past Due	102,219	110,483
Commercial real estate | Farm | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	5	81
Commercial real estate | Farm | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	1,559	1,243
Commercial real estate | Hotel
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	120,829	91,213
Total Past Due		63
Loans Not Past Due	120,829	91,150
Commercial real estate | Hotel | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due		63
Commercial real estate | Construction and development
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	98,906	102,598
Total Past Due	9	3,639
Loans Not Past Due	98,897	98,959
Commercial real estate | Construction and development | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	9	1,416
Commercial real estate | Construction and development | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due		2,223
Commercial real estate | Other
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	1,101,757	857,078
Total Past Due	3,511	3,170
Loans Not Past Due	1,098,246	853,908
Commercial real estate | Other | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	369	1,268
Commercial real estate | Other | 60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	12	90
Commercial real estate | Other | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	3,130	1,812
Residential
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	995,495	892,513
Residential | 1-4 family
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	694,163	608,366
Total Past Due	5,490	10,148
Loans Not Past Due	688,673	598,218
Residential | 1-4 family | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	934	4,884
Residential | 1-4 family | 60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	1,965	2,002
Residential | 1-4 family | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	2,591	3,262
Residential | Home equity
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	301,332	284,147
Total Past Due	1,191	1,881
Loans Not Past Due	300,141	282,266
Residential | Home equity | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	485	830
Residential | Home equity | 60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	126	137
Residential | Home equity | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	580	914
Consumer
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	66,485	61,905
Consumer | Direct
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	66,281	61,574
Total Past Due	1,082	1,002
Loans Not Past Due	65,199	60,572
Consumer | Direct | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	157	936
Consumer | Direct | 60-89 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	11
Consumer | Direct | Greater Than 90 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due	914	66
Consumer | Indirect
Aging of the recorded investment in past due loans
Total ending loan balance excluding accrued interest	204	331
Total Past Due		10
Loans Not Past Due	$ 204	321
Consumer | Indirect | 30-59 Days Past Due
Aging of the recorded investment in past due loans
Total Past Due		$ 10

LOANS AND ALLOWANCE - Loans by

LOANS AND ALLOWANCE - Loans by class modified as troubled debt restructurings (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017USD ($)loan	Sep. 30, 2016USD ($)loan	Sep. 30, 2017USD ($)loan	Sep. 30, 2016USD ($)loan	Dec. 31, 2016USD ($)
Troubled debt restructurings
Total of troubled debt restructurings	$ 4,022		$ 4,022		$ 6,474
Allocated specific reserves	402		402		508
Amounts Company has committed to lend to customers with outstanding loans classified as troubled debt restructurings	$ 0		$ 0		$ 0
Loans by class modified as troubled debt restructurings
Number of Loans | loan	1	2	3	8
Pre-Modification Outstanding Recorded Investment	$ 92	$ 298	$ 475	$ 587
Post-Modification Outstanding Recorded Investment	$ 92	$ 298	$ 475	$ 587
1-4 family
Loans by class modified as troubled debt restructurings
Number of Loans | loan			2
Pre-Modification Outstanding Recorded Investment			$ 422
Post-Modification Outstanding Recorded Investment			$ 422
Commercial | Agricultural
Loans by class modified as troubled debt restructurings
Number of Loans | loan				1
Pre-Modification Outstanding Recorded Investment				$ 89
Post-Modification Outstanding Recorded Investment				$ 89
Commercial real estate | Other
Loans by class modified as troubled debt restructurings
Number of Loans | loan		2	1	2
Pre-Modification Outstanding Recorded Investment		$ 298	$ 53	$ 298
Post-Modification Outstanding Recorded Investment		$ 298	$ 53	$ 298
Commercial real estate | Home equity
Loans by class modified as troubled debt restructurings
Number of Loans | loan				4
Pre-Modification Outstanding Recorded Investment				$ 76
Post-Modification Outstanding Recorded Investment				$ 76
Residential | 1-4 family
Loans by class modified as troubled debt restructurings
Number of Loans | loan	1			1
Pre-Modification Outstanding Recorded Investment	$ 92			$ 124
Post-Modification Outstanding Recorded Investment	$ 92			$ 124

LOANS AND ALLOWANCE - Loans whe

LOANS AND ALLOWANCE - Loans where there was a payment default within twelve months following the modification - (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)loan	Sep. 30, 2017USD ($)loan	Sep. 30, 2016USD ($)loan
Loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification
Number of Loans | loan		1	4	3
Recorded Investment		$ 104	$ 401	$ 375
Period of contractually past due loans under the modified terms, to be considered in payment default			90 days
Additional disclosures
Recorded investment in loans modified other than troubled debt restructurings	$ 4,616	$ 7,895	$ 12,916	$ 10,784
Commercial real estate | Other
Loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification
Number of Loans | loan				1
Recorded Investment				$ 125
Residential | 1-4 family
Loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification
Number of Loans | loan		1	1	2
Recorded Investment		$ 104	$ 79	$ 250
Commercial | Other
Loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification
Number of Loans | loan			3
Recorded Investment			$ 322

LOANS AND ALLOWANCE - Risk Cate

LOANS AND ALLOWANCE - Risk Categories of Loans by Class of Loans - (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Risk category of loans
Loans	$ 3,047,250	$ 2,651,673
Pass
Risk category of loans
Loans	1,751,207	1,481,038
Special Mention
Risk category of loans
Loans	32,796	20,526
Substandard
Risk category of loans
Loans	22,250	18,626
Non-accrual
Risk category of loans
Loans	12,030	5,844
Substandard Commercial
Risk category of loans
Loans	748	1,421
Performing
Risk category of loans
Loans	166,239	169,710
Watch
Risk category of loans
Loans		90
Commercial
Risk category of loans
Loans	559,995	534,559
Commercial | Commercial and industrial
Risk category of loans
Loans	496,523	461,092
Commercial | Commercial and industrial | Pass
Risk category of loans
Loans	449,907	415,064
Commercial | Commercial and industrial | Special Mention
Risk category of loans
Loans	2,941	3,347
Commercial | Commercial and industrial | Substandard
Risk category of loans
Loans	2,914	5,297
Commercial | Commercial and industrial | Non-accrual
Risk category of loans
Loans	2,187	827
Commercial | Commercial and industrial | Substandard Commercial
Risk category of loans
Loans	38	55
Commercial | Commercial and industrial | Performing
Risk category of loans
Loans	38,536	36,502
Commercial | Agricultural
Risk category of loans
Loans	63,472	73,467
Commercial | Agricultural | Pass
Risk category of loans
Loans	52,043	61,637
Commercial | Agricultural | Special Mention
Risk category of loans
Loans	1,557	2,283
Commercial | Agricultural | Substandard
Risk category of loans
Loans	338
Commercial | Agricultural | Non-accrual
Risk category of loans
Loans	1,484	1,441
Commercial | Agricultural | Substandard Commercial
Risk category of loans
Loans	66	190
Commercial | Agricultural | Performing
Risk category of loans
Loans	7,984	7,916
Commercial real estate
Risk category of loans
Loans	1,425,275	1,162,696
Commercial real estate | Farm
Risk category of loans
Loans	103,783	111,807
Commercial real estate | Farm | Pass
Risk category of loans
Loans	79,619	89,297
Commercial real estate | Farm | Special Mention
Risk category of loans
Loans	2,950	2,209
Commercial real estate | Farm | Substandard
Risk category of loans
Loans	3,784	694
Commercial real estate | Farm | Non-accrual
Risk category of loans
Loans	1,504	1,340
Commercial real estate | Farm | Substandard Commercial
Risk category of loans
Loans	150	91
Commercial real estate | Farm | Performing
Risk category of loans
Loans	15,776	21,778
Commercial real estate | Hotel
Risk category of loans
Loans	120,829	91,213
Commercial real estate | Hotel | Pass
Risk category of loans
Loans	117,911	88,166
Commercial real estate | Hotel | Substandard
Risk category of loans
Loans		2,983
Commercial real estate | Hotel | Non-accrual
Risk category of loans
Loans	2,918	64
Commercial real estate | Construction and development
Risk category of loans
Loans	98,906	102,598
Commercial real estate | Construction and development | Pass
Risk category of loans
Loans	76,313	74,811
Commercial real estate | Construction and development | Special Mention
Risk category of loans
Loans		3,600
Commercial real estate | Construction and development | Substandard
Risk category of loans
Loans	2,579	2,287
Commercial real estate | Construction and development | Non-accrual
Risk category of loans
Loans		31
Commercial real estate | Construction and development | Substandard Commercial
Risk category of loans
Loans		7
Commercial real estate | Construction and development | Performing
Risk category of loans
Loans	20,014	18,260
Commercial real estate | Other
Risk category of loans
Loans	1,101,757	857,078
Commercial real estate | Other | Pass
Risk category of loans
Loans	975,414	752,063
Commercial real estate | Other | Special Mention
Risk category of loans
Loans	25,348	9,087
Commercial real estate | Other | Substandard
Risk category of loans
Loans	12,635	7,365
Commercial real estate | Other | Non-accrual
Risk category of loans
Loans	3,937	2,141
Commercial real estate | Other | Substandard Commercial
Risk category of loans
Loans	494	1,078
Commercial real estate | Other | Performing
Risk category of loans
Loans	83,929	85,254
Commercial real estate | Other | Watch
Risk category of loans
Loans		90
Residential
Risk category of loans
Loans	995,495	892,513
Residential | Substandard
Risk category of loans
Loans	3,171	4,176
Residential | Performing
Risk category of loans
Loans	990,233	886,198
Residential | Watch
Risk category of loans
Loans	2,091	2,139
Residential | 1-4 family
Risk category of loans
Loans	694,163	608,366
Residential | 1-4 family | Substandard
Risk category of loans
Loans	2,591	3,262
Residential | 1-4 family | Performing
Risk category of loans
Loans	689,607	603,102
Residential | 1-4 family | Watch
Risk category of loans
Loans	1,965	2,002
Residential | Home equity
Risk category of loans
Loans	301,332	284,147
Residential | Home equity | Substandard
Risk category of loans
Loans	580	914
Residential | Home equity | Performing
Risk category of loans
Loans	300,626	283,096
Residential | Home equity | Watch
Risk category of loans
Loans	126	137
Consumer
Risk category of loans
Loans	66,485	61,905
Consumer | Substandard
Risk category of loans
Loans	11	4
Consumer | Performing
Risk category of loans
Loans	65,560	61,839
Consumer | Loss
Risk category of loans
Loans	914	62
Consumer | Direct
Risk category of loans
Loans	66,281	61,574
Consumer | Direct | Substandard
Risk category of loans
Loans	11	4
Consumer | Direct | Performing
Risk category of loans
Loans	65,356	61,508
Consumer | Direct | Loss
Risk category of loans
Loans	914	62
Consumer | Indirect
Risk category of loans
Loans	204	331
Consumer | Indirect | Performing
Risk category of loans
Loans	204	$ 331
Minimum
Risk category of loans
Credit relationships with an outstanding balance	$ 1,000
Minimum | Substandard
Risk category of loans
Period of loans past due	90 days
Minimum | Watch
Risk category of loans
Period of loans past due	60 days
Minimum | Loss
Risk category of loans
Period of loans past due	119 days
Minimum | Consumer loans not secured by 1-4 family residential real estate | Substandard
Risk category of loans
Period of loans past due	60 days
Maximum | Watch
Risk category of loans
Period of loans past due	89 days
Maximum | Consumer loans not secured by 1-4 family residential real estate | Substandard
Risk category of loans
Period of loans past due	119 days
Maximum | Commercial
Risk category of loans
Loans classified by delinquency	$ 250
Maximum | Commercial real estate
Risk category of loans
Loans classified by delinquency	$ 250

LOANS AND ALLOWANCE - Purchased

LOANS AND ALLOWANCE - Purchased Credit Impaired Loans for Which it Was Probable at Acquisition That All Contractually Required Payments Would Not be Collected (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Carrying amount of purchased credit impaired loans
Commercial	$ 15,733		$ 15,733	$ 10,817
1-4 Family	2,380		2,380	2,399
Outstanding Balance	18,113		18,113	13,216
Carrying amount, net of allowance	11,245		11,245	8,954
Allowance for loan losses on loans acquired in transfer	203		203	0
Increase in allowance for loan losses on loans acquired in transfer	0	$ 0
Contractually required payments receivable of loans purchased during the year
Commercial	8,968		8,968	12,907
1-4 Family	274		274	3,268
Total contractually required payments receivable	9,242		9,242	16,175
Fair value of acquired loans at acquisition	6,927		6,927	$ 11,560
Accretable yield, or income to be collected
New loans purchased			526
Accretion of income			(155)
Balance at end of period	$ 371		$ 371

OTHER REAL ESTATE OWNED - Infor

OTHER REAL ESTATE OWNED - Information Regarding Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Activity in other real estate owned
Beginning Balance	$ 2,072	$ 3,180	$ 1,875	$ 1,959	$ 1,959
Transfer to other real estate owned	362	564	1,470	1,547
Sale - Out of other real estate owned	(845)	(1,441)	(1,936)	(2,841)
Acquisition			227	1,668
Write-downs	21	61	68	91
Ending Balance	1,568	2,242	1,568	2,242	1,875
Valuation allowance on other real estate owned
Beginning Balance	(237)	(234)	(236)	(217)	(217)
Impairments during year	(21)	(61)	(68)	(91)
Recovery on impairments	20	5	66	18
Ending Balance	(238)	(290)	(238)	(290)	(236)
Net loss on OREO activity which is included in non-interest income and expenses related to foreclosed assets
Write-downs	21	61	68	91
Losses/(gains) on sales	(65)	(128)	(294)	(344)
Net loss/(gain)	(44)	(67)	(226)	(253)
Operating expenses	24	$ 46	106	$ 103
Foreclosed residential real estate properties
Foreclosed residential real estate properties	$ 559		559		1,443
Retail mortgage loans, foreclosure proceedings in process			$ 3,157		$ 3,266

DEPOSITS - Deposit Liabilities

DEPOSITS - Deposit Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
DEPOSITS & REPURCHASE AGREEMENTS
Non-interest-bearing demand	$ 838,490	$ 767,159
Interest-bearing demand	1,202,796	1,163,010
Savings	842,333	749,391
Certificates of deposit of $250 or more	121,353	65,815
Other certificates and time deposits	417,015	365,496
Total deposits	$ 3,421,987	3,110,871
Repurchase agreement, term	1 day
Pledged amount of mortgage backed securities	$ 56,590	58,001
Securities under repurchase agreements	$ 41,688	$ 38,339

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net Income
Net income	$ 11,116	$ 11,696	$ 32,843	$ 26,579
Diluted Earnings Per Common Share: Net income attributable to common shareholders and assumed conversions	$ 11,116	$ 11,696	$ 32,843	$ 26,579
Weighted Average Shares
Basic Earnings Per Common Share: Average Shares	25,580,316	24,016,237	24,951,821	22,786,961
Effect of dilutive warrants (in shares)	321,370	202,238	317,899	182,327
Effect of dilutive stock options (in shares)	70,513	103,137	79,908	101,777
Diluted Earnings Per Common Share: Average Shares	25,972,199	24,321,612	25,349,628	23,071,065
Earnings per Common Share
Basic Earnings Per Common Share: Net income (in dollars per share)	$ 0.43	$ 0.49	$ 1.32	$ 1.17
Diluted Earnings Per Common Share: Net income attributable to common shareholders and assumed conversions (in dollars per share)	$ 0.43	$ 0.48	$ 1.30	$ 1.15
Stock options
Earnings per Common Share
Antidilutive options	0	0

FAIR VALUE - Assets and Liabili

FAIR VALUE - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)item	Dec. 31, 2016USD ($)	Sep. 30, 2016USD ($)
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Number of times a sample of prices supplied by the pricing agent is validated by comparison to prices obtained from other third party sources | item	2
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	$ 1,083,903	$ 1,007,540
Transfers between Level 1 and Level 2
Transfers of assets from Level 1 to Level 2	0		$ 0
Transfers of assets from Level 2 to Level 1	0		$ 0
U. S. government agency
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	116	955
State and municipal
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	389,126	369,286
Mortgage-backed securities-residential (Government Sponsored Entity)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	402,226	446,630
Collateralized mortgage obligations (Government Sponsored Entity)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	282,757	179,401
Equity securities
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	4,670	4,670
Other securities
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	5,008	6,598
Recurring basis | Carrying Value
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	1,083,903	1,007,540
Mortgage banking derivatives	854	648
Fair value, assets	3,666	3,003
Derivative liability	(3,666)	(3,003)
Recurring basis | Carrying Value | U. S. government agency
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	116	955
Recurring basis | Carrying Value | State and municipal
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	389,126	369,286
Recurring basis | Carrying Value | Mortgage-backed securities-residential (Government Sponsored Entity)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	402,226	446,630
Recurring basis | Carrying Value | Collateralized mortgage obligations (Government Sponsored Entity)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	282,757	179,401
Recurring basis | Carrying Value | Equity securities
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	4,670	4,670
Recurring basis | Carrying Value | Other securities
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	5,008	6,598
Recurring basis | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	4,670	4,670
Recurring basis | Estimated Fair Value | Significant Other Observable Inputs (Level 2)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	1,064,745	986,152
Mortgage banking derivatives	854	648
Fair value, assets	3,666	3,003
Derivative liability	(3,666)	(3,003)
Recurring basis | Estimated Fair Value | Significant Unobservable Inputs (Level 3)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	14,488	16,718
Recurring basis | Estimated Fair Value | U. S. government agency | Significant Other Observable Inputs (Level 2)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	116	955
Recurring basis | Estimated Fair Value | State and municipal | Significant Other Observable Inputs (Level 2)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	379,646	359,166
Recurring basis | Estimated Fair Value | State and municipal | Significant Unobservable Inputs (Level 3)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	9,480	10,120
Recurring basis | Estimated Fair Value | Mortgage-backed securities-residential (Government Sponsored Entity) | Significant Other Observable Inputs (Level 2)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	402,226	446,630
Recurring basis | Estimated Fair Value | Collateralized mortgage obligations (Government Sponsored Entity) | Significant Other Observable Inputs (Level 2)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	282,757	179,401
Recurring basis | Estimated Fair Value | Equity securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	4,670	4,670
Recurring basis | Estimated Fair Value | Other securities | Significant Unobservable Inputs (Level 3)
Assets and Liabilities Measured on a Recurring Basis
Financial Assets	$ 5,008	$ 6,598

FAIR VALUE - Reconciliation Of

FAIR VALUE - Reconciliation Of Gains and Losses on Level 3 Assets - (Details) - Significant Unobservable Inputs (Level 3) - Recurring basis - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
State and municipal
Reconciliation and income statement classification of gains and losses
Balance at the beginning of the period	$ 9,672	$ 10,430	$ 10,120	$ 10,858
Included in other comprehensive income	(7)	6	(12)	8
Settlements	(185)	(182)	(628)	(612)
Balance at the end of the period	9,480	10,254	9,480	10,254
Other securities
Reconciliation and income statement classification of gains and losses
Balance at the beginning of the period	5,009	6,601	6,598	6,524
Included in other comprehensive income	(1)	(2)		75
Settlements			(1,590)
Balance at the end of the period	$ 5,008	$ 6,599	$ 5,008	$ 6,599

FAIR VALUE - Fair Value of Asse

FAIR VALUE - Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis - (Details) - Non-recurring basis - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Assets:
Impaired servicing rights	$ 928		$ 928		$ 1,083
Total impaired loans	6,889		6,889		2,537
Recorded investment of impaired loans	10,464		10,464		4,008
Valuation allowance of impaired loans	3,575		3,575		1,471
Provision expenses of impaired loans	1,748	$ 228	2,629	$ 634
Gross outstanding balance of servicing rights	1,103		1,103		1,283
Valuation allowance of servicing rights			175		200
Change occurred in the valuation allowance	25	$ 125	25	$ 175
Commercial and industrial
Assets:
Total impaired loans	855		855		260
Recorded investment of impaired loans	2,197		2,197
Valuation allowance of impaired loans	1,342		1,342
Agricultural
Assets:
Total impaired loans	779		779		972
Recorded investment of impaired loans	1,484		1,484
Valuation allowance of impaired loans	705		705
Hotel
Assets:
Total impaired loans	2,715		2,715
Recorded investment of impaired loans	2,918		2,918
Valuation allowance of impaired loans	203		203
Farm
Assets:
Total impaired loans	794		794		745
Recorded investment of impaired loans	1,344		1,344
Valuation allowance of impaired loans	550		550
Other real estate
Assets:
Total impaired loans	1,746		1,746		560
Recorded investment of impaired loans	2,521		2,521
Valuation allowance of impaired loans	775		775
Significant Unobservable Inputs (Level 3)
Assets:
Impaired servicing rights	928		928		1,083
Total impaired loans	6,889		6,889		2,537
Significant Unobservable Inputs (Level 3) | Commercial and industrial
Assets:
Total impaired loans	855		855		260
Significant Unobservable Inputs (Level 3) | Agricultural
Assets:
Total impaired loans	779		779		972
Significant Unobservable Inputs (Level 3) | Hotel
Assets:
Total impaired loans	2,715		2,715
Significant Unobservable Inputs (Level 3) | Farm
Assets:
Total impaired loans	794		794		745
Significant Unobservable Inputs (Level 3) | Other real estate
Assets:
Total impaired loans	$ 1,746		$ 1,746		$ 560

FAIR VALUE - Quantitative Infor

FAIR VALUE - Quantitative Information about Level 3 Value Measurements - (Details) - Non-recurring basis - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Impaired Loans
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 6,889	$ 2,537
Impaired Loans | Commercial and industrial | Sales comparison approach
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 855	$ 260
Impaired Loans | Commercial and industrial | Sales comparison approach | Minimum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	19.00%	10.00%
Impaired Loans | Commercial and industrial | Sales comparison approach | Maximum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	30.00%	30.00%
Impaired Loans | Commercial and industrial | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	24.00%	18.00%
Impaired Loans | Agricultural | Sales comparison approach
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 779	$ 972
Impaired Loans | Agricultural | Sales comparison approach | Minimum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	16.00%
Impaired Loans | Agricultural | Sales comparison approach | Maximum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	25.00%
Impaired Loans | Agricultural | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	24.00%	10.00%
Impaired Loans | Hotel | Sales comparison approach
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 2,715
Impaired Loans | Hotel | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	40.00%
Impaired Loans | Farm | Sales comparison approach
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 794	$ 745
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)		10.00%
Impaired Loans | Farm | Sales comparison approach | Minimum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	16.00%
Impaired Loans | Farm | Sales comparison approach | Maximum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	(25.00%)
Impaired Loans | Farm | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	22.00%	10.00%
Impaired Loans | Other real estate | Sales comparison approach
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 1,746	$ 560
Impaired Loans | Other real estate | Sales comparison approach | Minimum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	19.00%	16.00%
Impaired Loans | Other real estate | Sales comparison approach | Maximum
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	40.00%	31.00%
Impaired Loans | Other real estate | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)	27.00%
Impaired Loans | Other | Sales comparison approach | Average
Unobservable Inputs
Adjustment for differences between comparable sales, type of property, current status of property (as a percent)		27.00%
Mortgage servicing rights | Cash flow analysis
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value
Fair Value	$ 928	$ 1,083
Unobservable Inputs
Discount rate (as a percent)	10.00%	10.00%

FAIR VALUE - Carrying Amounts a

FAIR VALUE - Carrying Amounts and Estimated Fair Values of Financial Instruments - (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Financial assets
Interest bearing time deposits	$ 2,160	$ 1,960
FHLB and other stock, at cost	27,972	21,693
Interest receivable	8,772	7,342
Carrying Value
Financial assets
Cash and cash equivalents	70,277	86,552
Interest bearing time deposits	2,160	1,960
Loans including loans held for sale, net	3,026,807	2,639,046
FHLB and other stock, at cost	27,972	21,693
Interest receivable	14,493	12,576
Financial liabilities
Deposits	(3,421,987)	(3,110,871)
Other borrowings	(271,412)	(209,672)
FHLB advances	(310,982)	(249,658)
Interest payable	(1,292)	(642)
Subordinated debentures	(48,176)	(41,239)
Estimated Fair Value
Financial assets
Cash and cash equivalents	70,277	86,552
Interest bearing time deposits	2,160	1,960
Loans including loans held for sale, net	3,043,265	2,675,029
Interest receivable	14,493	12,576
Financial liabilities
Deposits	(3,419,426)	(3,107,983)
Other borrowings	(271,412)	(209,686)
FHLB advances	(309,196)	(248,944)
Interest payable	(1,292)	(642)
Subordinated debentures	(41,021)	(34,084)
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets
Cash and cash equivalents	63,762	75,778
Financial liabilities
Deposits	(838,490)	(767,159)
Significant Other Observable Inputs (Level 2)
Financial assets
Cash and cash equivalents	6,515	10,774
Interest bearing time deposits	2,160	1,960
Loans including loans held for sale, net	9,197	12,598
Interest receivable	5,703	5,234
Financial liabilities
Deposits	(2,580,936)	(2,340,824)
Other borrowings	(271,412)	(209,686)
FHLB advances	(309,196)	(248,944)
Interest payable	(1,292)	(642)
Subordinated debentures	(41,021)	(34,084)
Significant Unobservable Inputs (Level 3)
Financial assets
Loans including loans held for sale, net	3,034,068	2,662,431
Interest receivable	$ 8,790	$ 7,342

REGULATORY CAPITAL (Details)

REGULATORY CAPITAL (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)item	Dec. 31, 2019	Dec. 31, 2016USD ($)	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Actual and required capital amounts and ratios
Number of ratios calculated according to the regulations for determining assigned capital category | item	4
Basel III and Dodd Frank Rules
Capital conservation buffer, percentage					0.00%
Total capital (to risk-weighted assets)
Actual, Amount	$ 442,560		$ 407,802
Required for Adequate Capital, Amount	$ 263,158		$ 222,095
Actual, Ratio	13.50%		14.70%
Required for Adequate Capital, Ratio	8.00%		8.00%
Tier 1 capital (to risk-weighted assets)
Actual, Amount	$ 420,017		$ 385,303
Required for Adequate Capital, Amount	$ 197,369		$ 166,571
Actual, Ratio	12.80%		13.90%
Required for Adequate Capital, Ratio	6.00%		6.00%
Common equity Tier 1 capital (to risk-weighted assets)
Actual, Amount	$ 372,091		$ 344,212
Required for Adequate Capital, Amount	$ 148,026		$ 124,928
Actual, Ratio	11.30%		12.40%
Required for Adequate Capital, Ratio	4.50%		4.50%
Tier 1 capital (to average assets)
Actual, Amount	$ 420,017		$ 385,303
Required for Adequate Capital, Amount	$ 177,717		$ 157,671
Actual, Ratio (as a percent)	9.50%		9.80%
Required for Adequate Capital, Ratio	4.00%		4.00%
Cash and cash equivalents	$ 70,277		$ 86,552	$ 80,329	$ 67,578
Federal Reserve Corrective Action Rules
Basel III and Dodd Frank Rules
Capital conservation buffer, percentage	1.25%
Forecast 2,019
Basel III and Dodd Frank Rules
Capital conservation buffer, percentage		2.50%
Minimum | Prior To Federal Reserve Corrective Action Rules
Tier 1 capital (to risk-weighted assets)
Required for Adequate Capital, Ratio	4.00%
Minimum | Federal Reserve Corrective Action Rules
Basel III and Dodd Frank Rules
Required minimum Tier 1 capital to risk weighted assets (as a percent )	4.50%
Required minimum conservation buffer percentage	2.50%
Tier 1 capital (to risk-weighted assets)
Required for Adequate Capital, Ratio	6.00%
Tier 1 capital (to average assets)
Required for Adequate Capital, Ratio	4.00%
Parent Company
Tier 1 capital (to average assets)
Cash and cash equivalents	$ 13,000
MainSource Bank
Basel III and Dodd Frank Rules
Tier 1 leverage capital required to be well capitalized to average assets (as a percent)	5.00%		5.00%
Total capital (to risk-weighted assets)
Actual, Amount	$ 446,375		$ 407,939
Required for Adequate Capital, Amount	263,215		222,152
To Be Well Capitalized, Amount	$ 329,019		$ 277,690
Actual, Ratio	13.60%		14.70%
Required for Adequate Capital, Ratio	8.00%		8.00%
To Be Well Capitalized, Ratio	10.00%		10.00%
Tier 1 capital (to risk-weighted assets)
Actual, Amount	$ 423,832		$ 385,440
Required for Adequate Capital, Amount	197,411		166,614
To Be Well Capitalized, Amount	$ 263,215		$ 222,152
Actual, Ratio	12.90%		13.90%
Required for Adequate Capital, Ratio	6.00%		6.00%
To Be Well Capitalized, Ratio	8.00%		8.00%
Common equity Tier 1 capital (to risk-weighted assets)
Actual, Amount	$ 423,832		$ 385,440
Required for Adequate Capital, Amount	148,058		124,960
To Be Well Capitalized, Amount	$ 213,862		$ 180,498
Actual, Ratio	12.90%		13.90%
Required for Adequate Capital, Ratio	4.50%		4.50%
To Be Well Capitalized, Ratio	6.50%		6.50%
Tier 1 capital (to average assets)
Actual, Amount	$ 423,832		$ 385,440
Required for Adequate Capital, Amount	177,436		157,390
To Be Well Capitalized, Amount	$ 221,795		$ 196,737
Actual, Ratio (as a percent)	9.60%		9.80%
Required for Adequate Capital, Ratio	4.00%		4.00%
To Be Well Capitalized, Ratio	5.00%		5.00%

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
INCOME TAXES
Effective tax rate (as a percent)	24.90%	26.00%	23.90%	23.50%

DERIVATIVES (Details)

DERIVATIVES (Details) - Interest Rate Swap - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Other Income
Derivatives, Fair Value [Line Items]
Fee income (expense)	$ 209	$ 257	$ 612	$ 766
Other Assets
Derivatives, Fair Value [Line Items]
Notional amount, assets	186,209		186,209		$ 143,300
Fair value, assets	3,666		3,666		3,003
Other Liabilities
Derivatives, Fair Value [Line Items]
Notional amount, liabilities	186,209		186,209		143,300
Fair value, liabilities	$ 3,666		$ 3,666		$ 3,003

ACQUISITIONS - Acquisition of F

ACQUISITIONS - Acquisition of FCB Bancorp (Details) $ / shares in Units, $ in Thousands	Apr. 28, 2017USD ($)$ / sharesshares	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)$ / shares	Sep. 30, 2016USD ($)	Jun. 30, 2016USD ($)$ / shares	Jun. 30, 2017USD ($)$ / shares	Jun. 30, 2016USD ($)$ / shares	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Dec. 31, 2016USD ($)
ACQUISITIONS
Acquisition related expenses		$ 3,037		$ 601				$ 8,613	$ 6,964
Consideration
Cash								(2,845)	$ 11,289
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Goodwill		136,303						$ 136,303		$ 101,315
FCB Bancorp, Inc.
ACQUISITIONS
Acquisition of outstanding common shares (as a percent)	100.00%
Ratio of shares to be received by acquiree shareholders	0.9
Cash received in exchange for each share of common stock owned (in dollars per share) | $ / shares	$ 7
Period of consecutive trading days used to calculate average daily closing sales price of a share of common stock	10 days
Shares issued | shares	1,402,612
Acquisition related expenses		$ 7,063
Consideration
Cash	$ 10,911
Equity Instruments	47,969
Fair Value of Total Consideration	58,880
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash and cash equivalents	15,972
Securities	45,498
Federal Home Loan Bank stock	3,418
Subordinated debt	17,111
Loans	427,762
Premises and equipment	9,863
Core deposit intangibles	6,263
Bank owned life insurance	6,571
Other assets	9,057
Total assets acquired	524,404
Deposits	366,871
Federal Home Loan Bank advances	43,804
Other liabilities	71,406
Total liabilities assumed	499,192
Total identifiable net assets	25,212
Goodwill	33,668
Pro forma financial information
Net interest income			$ 37,400		$ 35,317	$ 110,947	$ 98,452
Net income			$ 12,133		$ 13,100	$ 38,801	$ 34,200
Basic earnings per share | $ / shares			$ 0.47		$ 0.51	$ 1.51	$ 1.40
Diluted earnings per share | $ / shares			$ 0.47		$ 0.51	$ 1.49	$ 1.39
Fair value of acquired receivables	419,470
Gross contractual amounts receivable	$ 427,152

ACQUISITIONS - Acquisition of66

ACQUISITIONS - Acquisition of First Service Capital Management, Inc. (Details) $ in Thousands	Feb. 17, 2017USD ($)item	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Business Acquisition [Line Items]
Cash paid for acquisitions, net		$ (2,845)	$ 11,289
Goodwill		$ 136,303		$ 101,315
First Service Capital Management, Inc.
Business Acquisition [Line Items]
Cash paid for acquisitions, net	$ 1,400
Number of brokers of acquiree to be hired | item	4
Purchase price	$ 1,750
Goodwill	$ 660
Period for tax deduction purposes for goodwill and intangible assets	15 years
First Service Capital Management, Inc. | Customer relationship intangibles
Business Acquisition [Line Items]
Intangible asset recorded	$ 1,090
Intangible asset amortization period	15 years

ACQUISITIONS - Acquisition of C

ACQUISITIONS - Acquisition of Capstone Investment Management (Details) - USD ($) $ in Thousands	May 01, 2017	Sep. 30, 2017	Sep. 30, 2016
ACQUISITIONS
Cash paid for acquisitions, net		$ (2,845)	$ 11,289
Capstone
ACQUISITIONS
Purchase price	$ 1,750
Cash paid for acquisitions, net	756
Loan assumed	$ 644
Period over which remaining balance of loan assumed will be earned	2 years