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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Nov. 07, 2018
Document and Entity Information
Entity Registrant Name	FIRST BUSEY CORP /NV/
Entity Central Index Key	0000314489
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		48,860,557
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents (interest-bearing 2018 $52,390; 2017 $234,889)	$ 160,652	$ 353,272
Securities available for sale	863,381	872,682
Securities held to maturity	626,250	443,550
Securities equity investments	7,317	5,378
Loans held for sale	32,617	94,848
Portfolio loans (net of allowance for loan losses 2018 $52,743; 2017 $53,582)	5,570,998	5,465,918
Premises and equipment, net	119,162	116,913
Goodwill	267,685	269,346
Other intangible assets, net	34,278	38,727
Cash surrender value of bank owned life insurance	127,663	126,737
Deferred tax asset, net	16,431	17,296
Other assets	62,951	55,973
Total assets	7,889,385	7,860,640
Deposits:
Noninterest-bearing	1,438,054	1,597,421
Interest-bearing	4,757,515	4,528,544
Total deposits	6,195,569	6,125,965
Securities sold under agreements to repurchase	255,906	304,566
Short-term borrowings	200,000	220,000
Long-term debt	50,000	50,000
Senior notes, net of unamortized issuance costs	39,505	39,404
Subordinated notes, net of unamortized issuance costs	59,121	64,715
Junior subordinated debt owed to unconsolidated trusts	71,118	71,008
Other liabilities	46,026	49,979
Total liabilities	6,917,245	6,925,637
Commitments and contingencies (See Note 13)
Stockholders' Equity
Common stock, $.001 par value, authorized 66,666,667 shares; shares issued 2018 and 2017 49,185,581	49	49
Additional paid-in capital	1,079,111	1,084,889
Accumulated deficit	(87,532)	(132,122)
Accumulated other comprehensive loss	(13,024)	(2,810)
Total stockholders' equity before treasury stock	978,604	950,006
Common stock shares held in treasury at cost, 2018 325,272; 2017 500,638	(6,464)	(15,003)
Total stockholders’ equity	972,140	935,003
Total liabilities and stockholders’ equity	$ 7,889,385	$ 7,860,640
Common shares outstanding at period end	48,860,309	48,684,943

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents, interest-bearing (in dollars)	$ 52,390	$ 234,889
Portfolio Loans, allowance for loan losses (in dollars)	$ 52,743	$ 53,582
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	66,666,667	66,666,667
Common stock, shares issued	49,185,581	49,185,581
Common stock shares held in treasury	325,272	500,638

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Interest income:
Interest and fees on loans	$ 63,589	$ 56,762	$ 186,839	$ 138,595
Interest and dividends on investment securities:
Taxable interest income	8,006	4,689	21,250	12,339
Non-taxable interest income	1,166	1,068	3,630	2,521
Total interest income	72,761	62,519	211,719	153,455
Interest expense:
Deposits	8,946	3,851	21,837	8,058
Federal funds purchased and securities sold under agreements to repurchase	426	291	1,139	618
Short-term borrowings	324	447	1,257	521
Long-term debt	245	141	622	421
Senior notes	400	400	1,199	562
Subordinated notes	792	799	2,379	1,098
Junior subordinated debt owed to unconsolidated trusts	854	649	2,383	1,857
Total interest expense	11,987	6,578	30,816	13,135
Net interest income	60,774	55,941	180,903	140,320
Provision for loan losses	758	1,494	4,024	2,494
Net interest income after provision for loan losses	60,016	54,447	176,879	137,826
Non-interest income:
Mortgage revenue	1,272	3,526	4,488	8,430
Security gains, net		290	160	1,143
Other income	2,406	1,730	6,896	4,774
Total non-interest income	21,853	20,837	67,141	60,913
Non-interest expense:
Salaries, wages and employee benefits	26,024	25,497	80,315	67,448
Net occupancy expense of premises	3,761	3,714	11,271	10,025
Furniture and equipment expenses	1,715	1,785	5,418	5,123
Data processing	4,016	5,113	12,391	11,348
Amortization of intangible assets	1,445	1,286	4,450	3,675
Other expense	8,968	9,544	30,429	23,707
Total non-interest expense	45,929	46,939	144,274	121,326
Income before income taxes	35,940	28,345	99,746	77,413
Income taxes	9,081	9,561	26,108	26,980
Net income	$ 26,859	$ 18,784	$ 73,638	$ 50,433
Basic earnings per common share (in dollars per share)	$ 0.55	$ 0.41	$ 1.51	$ 1.24
Diluted earnings per common share (in dollars per share)	0.55	0.41	1.50	1.23
Dividends declared per share of common stock (in dollars per share)	$ 0.20	$ 0.18	$ 0.60	$ 0.54
Trust fees
Non-interest income:
Non-interest income	$ 6,324	$ 5,071	$ 20,573	$ 17,088
Commissions and brokers fees, net
Non-interest income:
Non-interest income	881	766	2,860	2,239
Remittance processing
Non-interest income:
Non-interest income	3,630	2,877	10,588	8,581
Fees for customer services
Non-interest income:
Non-interest income	$ 7,340	$ 6,577	$ 21,576	$ 18,658

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 26,859	$ 18,784	$ 73,638	$ 50,433
Unrealized net (losses) gains on securities:
Unrealized net holding (losses) gains arising during period	(3,020)	563	(13,280)	1,864
Reclassification adjustment for gains included in net income		(290)	(160)	(1,143)
Other comprehensive (loss) income, before tax	(3,020)	273	(13,440)	721
Income tax (benefit) expense related to items of other comprehensive income	(861)	119	(3,831)	298
Other comprehensive (loss) income, net of tax	(2,159)	154	(9,609)	423
Comprehensive income	$ 24,700	$ 18,938	$ 64,029	$ 50,856

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Pulaski Accumulated (Deficit)	Pulaski	First Community Common Stock	First Community Additional Paid-in Capital	First Community	Common Stock	Additional Paid-in Capital	Accumulated (Deficit)	Accumulated Other Comprehensive Income (loss)	Treasury Stock	Total
Balance at Dec. 31, 2016						$ 39	$ 781,716	$ (163,689)	$ 36	$ (23,788)	$ 594,314
Increase (decrease) in shareholders' equity
Net income								50,433			50,433
Other comprehensive loss									423		423
Issuance of treasury stock for employee stock purchase plan							(452)			841	389
Net issuance of treasury stock for restricted stock unit vesting and related tax benefit							(5,221)			4,862	(359)
Net issuance of stock options exercised net of shares redeemed							(923)			1,088	165
Stock issued for acquisition of First Community, net of stock issuance costs			$ 7	$ 211,575	$ 211,582
Cash dividends common stock at $0.60 and $0.54 per share for nine months ended September 30, 2018 and 2017 respectively								(21,944)			(21,944)
Stock dividend equivalents restricted stock units at $0.60 and $0.54 per share for nine months ended September 30, 2018 and 2017 respectively							342	(342)
Stock dividend accrued on restricted stock awards assumed with the Pulaski Financial Corp. (“Pulaski”) acquisition at $0.54 per share	$ (10)	$ (10)
Return of 28,648 equity trust shares										(860)	(860)
Stock-based compensation							1,935				1,935
Balance at Sep. 30, 2017						46	988,972	(135,552)	459	(17,857)	836,068
Balance at Dec. 31, 2017						49	1,084,889	(132,122)	(2,810)	(15,003)	935,003
Increase (decrease) in shareholders' equity
Net income								73,638			73,638
Other comprehensive loss									(9,609)		(9,609)
Tax Cuts and Jobs Act (“TCJA”) of 2017 reclassification								605	(605)
Issuance of treasury stock for employee stock purchase plan							(295)			724	429
Net issuance of treasury stock for restricted stock unit vesting and related tax benefit							(6,059)			4,924	(1,135)
Net issuance of stock options exercised net of shares redeemed							(2,505)			2,891	386
Cash dividends common stock at $0.60 and $0.54 per share for nine months ended September 30, 2018 and 2017 respectively								(29,238)			(29,238)
Stock dividend equivalents restricted stock units at $0.60 and $0.54 per share for nine months ended September 30, 2018 and 2017 respectively							415	(415)
Stock-based compensation							2,666				2,666
Balance at Sep. 30, 2018						$ 49	$ 1,079,111	$ (87,532)	$ (13,024)	$ (6,464)	$ 972,140

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Cash dividends, common stock (in dollars per share)	$ 0.60	$ 0.54
Stock dividends, restricted stock units (in dollars per share)	$ 0.60	0.54
Stock dividends, accrued restricted stock awards (in dollars per share)		$ 0.54
Return of equity trust shares		28,648

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Cash Flows from Operating Activities
Net income			$ 73,638	$ 50,433
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based and non-cash compensation			2,666	1,935
Depreciation			7,158	6,084
Amortization of intangible assets	$ 1,445	$ 1,286	4,450	3,675
Premises and equipment impairment			817
Provision for loan losses	758	1,494	4,024	2,494
Provision for deferred income taxes			4,696	(3,480)
Amortization of security premiums and discounts, net			6,545	4,172
Accretion of premiums and discounts on time deposits and trust preferred securities, net			(82)	(232)
Accretion of premiums and discounts on portfolio loans, net			(8,615)	(6,329)
Security gains, net		(290)	(160)	(1,143)
Change in equity securities, net			(2,699)
Gain on sales of mortgage loans, net of origination costs			(7,805)	(36,911)
Mortgage loans originated for sale			(336,169)	(1,166,083)
Proceeds from sales of mortgage loans			406,205	1,314,779
Net losses (gains) on disposition of premises and equipment			186	(57)
Increase in cash surrender value of bank owned life insurance			(926)	(1,604)
Change in assets and liabilities:
(Increase) decrease in other assets			(3,627)	14,049
Decrease in other liabilities			(7,215)	(5,513)
Increase in interest payable			1,849	1,650
Decrease in income taxes receivable			2,200	1,435
Net cash provided by operating activities			147,136	179,354
Cash Flows from Investing Activities
Proceeds from sales of securities classified available for sale				134,515
Proceeds from sales of securities classified equity			920
Proceeds from maturities of securities classified available for sale			115,522	154,435
Proceeds from sales of securities classified held to maturity			31,815
Proceeds from maturities of securities classified held to maturity				6,358
Purchase of securities classified available for sale			(122,954)	(128,425)
Purchase of securities classified held to maturity			(217,767)	(185,201)
Net increase in loans			(104,195)	(98,040)
Proceeds from disposition of premises and equipment			26	622
Proceeds from sale of other real estate owned (“OREO”) properties			4,275	4,069	$ 5,024
Purchases of premises and equipment			(10,436)	(11,336)
Proceeds (purchases) from the redemption of Federal Home Loan Bank ("FHLB") stock, net			(2,611)	4,322
Net cash received in acquisitions				29,947
Net cash used in investing activities			(305,405)	(88,734)
Cash Flows from Financing Activities
Net increase (decrease) in certificates of deposit			216,313	(92,596)
Net increase in demand deposits, money market and savings accounts			(146,517)	(42,414)
Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase			(48,660)	4,443
Proceeds from short-term borrowings, net				53,150
Repayment of long-term advances			(5,500)	(39,800)
Net proceeds from issuance of senior debt				39,326
Net proceeds from issuance of subordinated debt				58,986
Cash dividends paid			(29,238)	(21,971)
Proceeds from FHLB long term advances, net			(20,000)
Value of shares surrendered upon vesting to satisfy tax withholding obligations of stock-based compensation			(1,136)	(1,975)
Proceeds from stock options exercised			387	165
Common stock issuance costs				(259)
Net cash (used in) financing activities			(34,351)	(42,945)
Net increase (decrease) in cash and cash equivalents			(192,620)	47,675
Cash and cash equivalents, beginning of period			353,272	166,706	166,706
Cash and cash equivalents, ending of period	$ 160,652	$ 214,381	160,652	214,381	$ 353,272
Cash payments for:
Interest			26,665	11,485
Income taxes			20,127	19,369
Non-cash Investing and Financing Activities:
Other real estate acquired in settlement of loans			$ 3,706	$ 477

Accounting Policies	9 Months Ended
Accounting Policies	Sep. 30, 2018
Accounting Policies
Accounting Policies	Note 1: Accounting Policies Basis of Financial Statement Presentation When preparing these unaudited Consolidated Financial Statements of First Busey Corporation and its subsidiaries (“First Busey,” “Company,” “we,” or “our”), a Nevada corporation, we have assumed that you have read the audited Consolidated Financial Statements included in our 2017 Form 10-K. These interim unaudited Consolidated Financial Statements serve to update our 2017 Form 10-K and may not include all information and notes necessary to constitute a complete set of Financial Statements. We prepared these unaudited Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform to the current period presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. In our opinion, the unaudited Consolidated Financial Statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. We have also considered the impact of subsequent events on these unaudited Consolidated Financial Statements. On October 12, 2018 a return of capital and associated surplus to the Company from Busey Bank was executed as discussed in “Note 14: Capital” with no impact to capital for the unaudited Consolidated Financial Statements. In addition, on November 1, 2018, Busey Trust Company was merged with and into Busey Bank, with no impact to the unaudited Consolidated Financial Statements. Other than these events, there were no significant subsequent events for the quarter ended September 30, 2018 through the issuance date of these unaudited Consolidated Financial Statements that warranted adjustment to or disclosure in the unaudited Consolidated Financial Statements. Use of Estimates In preparing the accompanying unaudited Consolidated Financial Statements, the Company’s management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Financial Statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the fair value of available for sale investment securities, the fair value of assets acquired and liabilities assumed in business combinations and the determination of the allowance for loan losses. Recently Issued Accounting Standards Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 outlines a single model for companies to use in accounting for revenue arising from contracts with customers and supersedes most prior revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and establishes additional disclosures. The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. The Company has evaluated its non-interest income and the nature of its contracts with customers and determined that further disaggregation of revenue beyond what is presented in the accompanying unaudited Consolidated Financial Statements was not necessary. The Company satisfies its performance obligations on its contracts with customers as services are rendered so there is limited judgment involved in applying Topic 606 that affects the determination of the timing and amount of revenue from contracts with customers. Descriptions of the Company’s primary revenue generating activities that are within Topic 606, and are presented in the accompanying unaudited Consolidated Statements of Income as components of non-interest income, include trust fees, commission and brokers’ fees, net, remittance processing, and fees for customer services. Trust fees and commission and brokers’ fees, net, represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and other fiduciary activities. Also included are fees received from a third party broker-dealer as part of a revenue sharing agreement for fees earned from customers that the Company refers to the third party. Revenue is recognized when the performance obligation is completed, which is generally monthly. Remittance processing represents transaction-based fees for pay processing solutions such as online bill payments, lockbox and walk-in payments. Revenue is recognized when the performance obligation is completed, which is generally monthly. Fees for customer services represents general service fees for monthly account maintenance and activity or transaction-based fees and consists of transaction-based revenue, time-based revenue, or item-based revenue. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for such performance obligations are generally received at the time the performance obligations are satisfied. The adoption of this guidance on January 1, 2018 did not change the method in which non-interest income is recognized therefore a cumulative effect adjustment to retained earnings was not necessary. ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 requires: equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial assets; eliminating the requirement to disclose the method and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the Balance Sheet; and requires an entity to present separately in other comprehensive income (loss) the portion of the total change in fair value of a liability resulting from the change in the instrument-specific credit risk when the fair value option has been elected for the liability. ASU 2016-01 was effective on January 1, 2018 and the adoption of this guidance resulted in separate classification of equity securities previously included in available for sale securities on the Consolidated Financial Statements. There was no cumulative effect adjustment recorded with the adoption of this guidance. ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows companies to make a one-time reclassification from accumulated other comprehensive income (loss) to retained earnings for the effects of remeasuring deferred tax liabilities and assets originally recorded in other comprehensive income as a result of the change in the federal tax rate by the TCJA. The Company adopted this guidance in the first quarter of 2018 with no impact on total stockholders' equity or net income. ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 intends to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the Consolidated Balance Sheet as a lease liability and a right-of-use asset. The guidance also requires qualitative and quantitative disclosures of the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, ASU 2018-11, "Leases (Topic 842): Targeted Improvements" was issued to allow companies to choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to the opening balance of retained earnings rather than recasting prior year results upon adoption of the standard. The Company is in the process of calculating the transition impact of the guidance on its Consolidated Financial Statements and related disclosures. Where the Company is a lessee, the Company expects an increase in assets and liabilities to record the right of use asset and the lease liability. ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 implements a change from the current impaired loss model to an expected credit loss model over the life of an instrument, including loans and securities held to maturity. The expected credit loss model is expected to result in earlier recognition of losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 including interim periods with those years. The Company has developed and is executing a project plan to implement this guidance. As part of that project plan, the Company will evaluate the impact this guidance will have on its Consolidated Financial Statements and related disclosures. ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 is intended to simplify goodwill impairment testing by eliminating the second step of the analysis which required an entity to determine the fair value of its assets and liabilities as of the impairment test date. Instead, ASU 2017-04 requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. This guidance is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 amends Topic 815 to reduce the cost and complexity of applying hedge accounting and expands the types of relationships that qualify for hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, requires all items that affect earnings to be presented in the same income statement line as the hedged item, provides for applying hedge accounting to additional hedging strategies, provides for new approaches to measuring the hedged item in fair value hedges of interest rate risk, and eases the requirements for effective testing and hedge documentation. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 removes, modifies, and adds certain disclosure requirements on fair value measurements. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The guidance has no impact on the Company’s Consolidated Financial Statements and is not expected to have a material impact on the Company’s required disclosures.

Acquisitions

9 Months Ended

Sep. 30, 2018

Acquisitions

Acquisitions

Note 2: Acquisitions

First Community Financial Partners, Inc.

On July 2, 2017, the Company completed its acquisition of First Community Financial Partners, Inc. (“First Community”), which was headquartered in Joliet, Illinois and its wholly owned bank subsidiary, First Community Financial Bank. Founded in 2004, First Community operated nine banking centers in Will, DuPage and Grundy Counties, which encompass portions of the southwestern suburbs of Chicago. The operating results of First Community are included with the Company’s results of operations since the date of acquisition. First Busey operated First Community Financial Bank as a separate subsidiary from July 3, 2017 until November 3, 2017, when it was merged with and into Busey Bank. At that time, First Community Financial Bank’s banking centers became banking centers of Busey Bank.

Under the terms of the merger agreement with First Community, at the effective time of the acquisition, each share of First Community common stock issued and outstanding was converted into the right to receive 0.396 shares of the Company’s common stock, cash in lieu of fractional shares and $1.35 cash consideration per share. The market value of the 7.2 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $211.1 million based on First Busey’s closing stock price of $29.32 on June 30, 2017. In addition, certain options to purchase shares of First Community common stock that were outstanding at the acquisition date were converted into options to purchase shares of First Busey common stock, adjusted for the 0.44 option exchange ratio, and the fair value was included in the purchase price. Further, the purchase price included cash payouts relating to unconverted stock options and restricted stock units outstanding as of the acquisition date.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair values on the date of acquisition. The total consideration paid, which was used to determine the amount of goodwill resulting from the transaction, also included the fair value of outstanding First Community stock options that were converted into options to purchase common shares of First Busey and cash paid out relating to stock options and restricted stock units not converted. As the total consideration paid for First Community exceeded the net assets acquired, goodwill of $116.0 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and the greater revenue opportunities from the Company’s broader service capabilities in the Chicagoland area, is not tax deductible, and was assigned to the Banking operating segment.

First Busey did not incur any expenses related to the acquisition of First Community for the three months ended September 30, 2018. First Busey incurred $0.1 million in pre-tax expenses related to the acquisition of First Community for the nine months ended September 30, 2018, primarily for professional and legal fees. First Busey incurred $2.9 million and $3.7 million in pre-tax expenses related to the acquisition of First Community for the three and nine months ended September 30, 2017, respectively, primarily for professional and legal fees, data processing conversion expenses and restructuring expenses, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Financial Statements.

The following table presents the fair value of First Community assets acquired and liabilities assumed as of July 2, 2017 (dollars in thousands):



	As Recorded by
	First Busey
Assets acquired:
Cash and cash equivalents	$	60,686
Securities		165,843
Loans held for sale		905
Portfolio loans		1,096,583
Premises and equipment		18,094
OREO		722
Other intangible assets		13,979
Other assets		41,755
Total assets acquired		1,398,567

Liabilities assumed:
Deposits		1,134,355
Other borrowings		125,751
Other liabilities		11,862
Total liabilities assumed		1,271,968

Net assets acquired	$	126,599

Consideration paid:
Cash	$	24,557
Cash payout of options and restricted stock units		6,182
Common stock		211,120
Fair value of stock options assumed		722
Total consideration paid		242,581

Goodwill	$	115,982

The loans acquired in this transaction were recorded at fair value with no carryover of any existing allowance for loan losses. Loans that were not deemed to be credit-impaired at the acquisition date were accounted for under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") 310-20, Receivables-Nonrefundable Fees and Other Costs, and were subsequently considered as part of the Company’s determination of the adequacy of the allowance for loan losses. Purchased credit-impaired (“PCI”) loans were accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the aggregate principal outstanding and aggregate fair value of the acquired performing loans, including loans held for sale, totaled $1.1 billion. The difference between the aggregate principal balance outstanding and aggregate fair value of $14.4 million is expected to be accreted over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $17.9 million and the aggregate fair value of PCI loans totaled $12.5 million, which became such loans’ new carrying value. At September 30, 2018, PCI loans related to this transaction with a carrying value of $2.7 million were outstanding, with the decrease relating to collections and a loan sale.

For PCI loans, the difference between contractually required payments at the acquisition date and the cash flow expected to be collected is referred to as the non-accretable difference. Further, the excess of cash flows expected at acquisition over the fair value is referred to as the accretable yield. The accretable yield, as of the acquisition date, of $0.6 million on PCI loans was expected to be recognized over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method; however, $0.2 million of the accretable yield was accelerated in 2017 as a result of collections of PCI loan balances so the full balance will be recognized by December 2018.

The following table provides the unaudited pro forma information for the results of operations for the nine months ended September 30, 2017, as if the acquisition had occurred January 1, 2017. The pro forma results combine the historical results of First Community into the Company's unaudited Consolidated Statements of Income, including the impact of purchase accounting adjustments for loan discount accretion, intangible assets amortization and deposit accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2017. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions. Only the merger related expenses that have been recognized are included in net income in the table below (dollars in thousands, except per share amount):


		Pro Forma
	Nine Months Ended
	September 30, 2017
Total revenues (net interest income plus non-interest income)	$	231,301
Net income		56,348
Diluted earnings per common share		1.23

Mid Illinois Bancorp, Inc.

On October 1, 2017, the Company completed its acquisition of Mid Illinois Bancorp, Inc. (“Mid Illinois”) and its wholly owned bank subsidiary South Side Trust & Savings Bank of Peoria (“South Side Bank”), under which each share of Mid Illinois common stock issued and outstanding as of the effective time was converted into, at the election of the stockholder the right to receive, either (i) $227.94 in cash, (ii) 7.5149 shares of the Company’s common stock, or (iii) mixed consideration of $68.38 in cash and 5.2604 shares of the Company’s common stock, subject to certain adjustments and proration. In the aggregate, total consideration consisted of 70% stock and 30% cash. Mid Illinois stockholders electing the cash consideration option were subject to proration under the terms of the merger agreement with Mid Illinois and ultimately received a mixture of cash and stock consideration. First Busey operated South Side Bank as a separate bank subsidiary from October 2, 2017 until March 16, 2018, when it was merged with and into Busey Bank. At that time, South Side Bank’s banking centers became banking centers of Busey Bank.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair values on the date of acquisition. An adjustment to the fair value was recorded in the first quarter of 2018 as additional information became available. As the total consideration paid for Mid Illinois exceeded the net assets acquired, goodwill of $48.9 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and expansion within the greater Peoria area, is not tax deductible, and was assigned to the Banking operating segment.

First Busey did not incur any expenses related to the acquisition of Mid Illinois for the three months ended September 30, 2018. First Busey incurred $3.1 million of pre-tax expenses related to the acquisition of Mid Illinois for the nine months ended September 30, 2018, primarily for salaries, wages and employee benefits expense, professional and legal fees and data conversion expenses, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Financial Statements. First Busey incurred $0.2 million and $0.4 million in pre-tax expenses related to the acquisition of Mid Illinois for the three and nine months ended September 30, 2017, respectively, primarily for legal fees, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Financial Statements.

The following table presents the fair value of Mid Illinois assets acquired and liabilities assumed as of October 1, 2017 (dollars in thousands):



	As Recorded by
	First Busey
Assets acquired:
Cash and cash equivalents	$	39,443
Securities		208,003
Loans held for sale		5,031
Portfolio loans		356,651
Premises and equipment		16,551
Other intangible assets		11,531
Other assets		29,564
Total assets acquired		666,774

Liabilities assumed:
Deposits		505,917
Other borrowings		61,040
Other liabilities		10,497
Total liabilities assumed		577,454

Net assets acquired	$	89,320

Consideration paid:
Cash	$	40,507
Common stock		97,702
Total consideration paid		138,209

Goodwill	$	48,889

The loans acquired in this transaction were recorded at fair value with no carryover of any existing allowance for loan losses. Loans that were not deemed to be credit-impaired at the acquisition date were accounted for under FASB ASC 310-20, Receivables-Nonrefundable Fees and Other Costs, and were subsequently considered as part of the Company’s determination of the adequacy of the allowance for loan losses. PCI loans were accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the aggregate principal outstanding was $362.4 million and aggregate fair value of the acquired performing loans was $357.0 million, including loans held for sale. The difference between the aggregate principal balance outstanding and aggregate fair value of $5.4 million is expected to be accreted over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $7.6 million and the aggregate fair value of PCI loans totaled $4.7 million, which became such loans’ new carrying value. At September 30, 2018, PCI loans related to this transaction with a carrying value of $0.1 million were outstanding, with the decrease primarily relating to loan sales. For PCI loans, the difference between contractually required payments at the acquisition date and the cash flow expected to be collected is referred to as the non-accretable difference. Further, the excess of cash flows expected at acquisition over the fair value is referred to as the accretable yield. The accretable yield, as of the acquisition date, of $0.1 million on PCI loans was expected to be recognized over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method; however, this was accelerated in 2018 due to loan sales of PCI loans.

The Company had $4.5 million of banking center real estate in the Peoria market at September 30, 2018 that was no longer in use and was classified as bank properties held for sale, which was recorded at the lower of amortized cost or estimated fair value less estimated cost to sell. The Company recognized an impairment charge of $0.8 million in the second quarter of 2018 related to these properties, resulting in a net amount of bank properties held for sale of $3.7 million at September 30, 2018 which is included in premises and equipment, net.

The Banc Ed Corp.

On August 21, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with The Banc Ed Corp., a Delaware corporation (“Banc Ed”), pursuant to which Banc Ed will merge into First Busey, with First Busey as the surviving corporation (the “Merger”). It is anticipated that TheBANK of Edwardsville, Banc Ed’s wholly-owned bank subsidiary (“TheBANK”), will be merged with and into First Busey’s bank subsidiary, Busey Bank, at a date following the completion of the holding company merger. At the time of the bank merger, TheBANK’s banking offices will become branches of Busey Bank. The Merger is anticipated to be completed in the fourth quarter of 2018 or early in the first quarter of 2019, and is subject to the satisfaction of customary closing conditions in the Merger Agreement and the approval of the appropriate regulatory authorities and of the stockholders of Banc Ed. As of September 30, 2018, Banc Ed had total consolidated assets of $1.8 billion, total loans of $914.5 million and total deposits of $1.6 billion.

TheBANK was founded in 1868 and is a privately held commercial bank headquartered in Edwardsville, Illinois. The partnership will enhance First Busey’s existing deposit, commercial banking and wealth management presence in the greater St. Louis Missouri-Illinois Metropolitan Statistical Area. Under the terms of the Merger Agreement, Banc Ed stockholders will have the right to receive 8.2067 shares of common stock of First Busey and $111.53 in cash for each share of common stock of Banc Ed, with total consideration to consist of approximately 70% stock and 30% cash. Please reference the Company’s Form 8-K, filed on August 22, 2018 for additional information regarding our pending acquisition of Banc Ed.

This transaction will be accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged will be recorded at estimated fair values on the date of acquisition. Fair values are subject to refinement for up to one year after the closing date.

First Busey incurred $0.2 million in pre-tax expenses related to the planned acquisition of Banc Ed for the three and nine months ended September 30, 2018, primarily for legal fees, all of which are reported as a component of non-interest expense in the accompanying unaudited Consolidated Financial Statements. The operating results of Banc Ed and TheBANK are not included in the accompanying unaudited Consolidated Financial Statements.

Securities

9 Months Ended

Sep. 30, 2018

Securities

Securities

Note 3: Securities

The table below provides the amortized cost, unrealized gains and losses and fair values of securities summarized by major category (dollars in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2018:	Cost		Gains		Losses		Value
Available for sale
U.S. Treasury securities	$	61,066	$	—	$	(1,212)	$	59,854
Obligations of U.S. government corporations and agencies		91,767		5		(2,106)		89,666
Obligations of states and political subdivisions		245,459		315		(3,849)		241,925
Residential mortgage-backed securities		342,421		207		(11,046)		331,582
Corporate debt securities		140,884		19		(549)		140,354
Total	$	881,597	$	546	$	(18,762)	$	863,381

Held to maturity
Obligations of states and political subdivisions	$	36,689	$	13	$	(301)	$	36,401
Commercial mortgage-backed securities		60,172		—		(1,705)		58,467
Residential mortgage-backed securities		529,389		—		(12,955)		516,434
Total	$	626,250	$	13	$	(14,961)	$	611,302


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017:	Cost		Gains		Losses		Value
Available for sale
U.S. Treasury securities	$	60,829	$	7	$	(488)	$	60,348
Obligations of U.S. government corporations and agencies		104,807		1		(1,143)		103,665
Obligations of states and political subdivisions		280,216		1,160		(1,177)		280,199
Residential mortgage-backed securities		400,661		612		(3,837)		397,436
Corporate debt securities		30,946		132		(44)		31,034
Total	$	877,459	$	1,912	$	(6,689)	$	872,682

Held to maturity
Obligations of states and political subdivisions	$	41,300	$	228	$	(64)	$	41,464
Commercial mortgage-backed securities		60,474		41		(297)		60,218
Residential mortgage-backed securities		341,776		25		(2,431)		339,370
Total	$	443,550	$	294	$	(2,792)	$	441,052

Securities classified as available for sale are those debt securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on factors including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations or other similar factors. They are carried at fair value with unrealized gains and losses, net of taxes, reported in other comprehensive income. Securities classified as held to maturity are those debt securities that the Company intends to hold to maturity. Accordingly, they are carried at cost, adjusted for amortization of premiums and accretion of discounts.

The Company held equity securities, consisting of money market mutual funds, with fair values of $7.3 million at September 30, 2018. The Company held equity securities, consisting of common stock and money market mutual funds, with fair values of $0.8 million and $4.6 million, respectively, at December 31, 2017. The Company recorded $0.1 million of unrealized losses in non-interest income in the accompanying unaudited Consolidated Financial Statements during the nine months ended September 30, 2018, related to the change in fair value of the common stock. The common stock was sold in the second quarter of 2018 and realized security gains recorded during the nine months ended September 30, 2018 were $0.2 million.

The amortized cost and fair value of debt securities as of September 30, 2018, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands).


	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	86,344	$	86,041	$	9,858	$	9,837
Due after one year through five years		335,204		330,511		56,077		54,998
Due after five years through ten years		152,272		149,199		29,754		28,867
Due after ten years		307,777		297,630		530,561		517,600
Total	$	881,597	$	863,381	$	626,250	$	611,302

Realized gains and losses related to sales of available for sale securities are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross security gains	$	—	$	290	$	—	$	1,259
Gross security (losses)		—		—		—		(116)
Security gains, net(1)	$	—	$	290	$	—	$	1,143

(1)

Security gains, net reported on the Consolidated Statements of Income in 2018 relate to the sale of equity securities as noted above.

The tax provision for the net realized gains and losses was $0.1 million for the three months ended September 30, 2017. The tax provision for the net realized gains and losses was $0.4 million for the nine months ended September 30, 2017.

Investment securities with carrying amounts of $598.7 million and $638.2 million on September 30, 2018 and December 31, 2017, respectively, were pledged as collateral for public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

Information pertaining to securities with gross unrealized losses at September 30, 2018 and December 31, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows (dollars in thousands):


	Continuous unrealized				Continuous unrealized
	losses existing for less than				losses existing for greater
	12 months, gross				than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2018:	Value		Losses		Value		Losses		Value		Losses
Available for sale
U.S. Treasury securities	$	35,883	$	(471)	$	23,971	$	(741)	$	59,854	$	(1,212)
Obligations of U.S. government corporations and agencies		29,899		(707)		58,946		(1,399)		88,845		(2,106)
Obligations of states and political subdivisions		186,959		(3,067)		36,612		(782)		223,571		(3,849)
Residential mortgage-backed securities		204,979		(5,089)		114,013		(5,957)		318,992		(11,046)
Corporate debt securities		138,019		(546)		47		(3)		138,066		(549)
Total temporarily impaired securities	$	595,739	$	(9,880)	$	233,589	$	(8,882)	$	829,328	$	(18,762)

Held to maturity
Obligations of states and political subdivisions	$	31,932	$	(284)	$	911	$	(17)	$	32,843	$	(301)
Commercial mortgage-backed securities		49,853		(1,385)		8,614		(320)		58,467		(1,705)
Residential mortgage-backed securities		449,798		(9,550)		66,636		(3,405)		516,434		(12,955)
Total temporarily impaired securities	$	531,583	$	(11,219)	$	76,161	$	(3,742)	$	607,744	$	(14,961)


	Continuous unrealized				Continuous unrealized
	losses existing for less than				losses existing for greater
	12 months, gross				than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2017:	Value		Losses		Value		Losses		Value		Losses
Available for sale
U.S. Treasury securities	$	59,773	$	(488)	$	—	$	—	$	59,773	$	(488)
Obligations of U.S. government corporations and agencies		78,610		(636)		24,831		(507)		103,441		(1,143)
Obligations of states and political subdivisions		162,213		(1,027)		12,045		(150)		174,258		(1,177)
Residential mortgage-backed securities		223,261		(1,428)		90,930		(2,409)		314,191		(3,837)
Corporate debt securities		16,176		(44)		—		—		16,176		(44)
Total temporarily impaired securities	$	540,033	$	(3,623)	$	127,806	$	(3,066)	$	667,839	$	(6,689)

Held to maturity
Obligations of states and political subdivisions	$	17,939	$	(64)	$	—	$	—	$	17,939	$	(64)
Commercial mortgage-backed securities		44,514		(214)		2,374		(83)		46,888		(297)
Residential mortgage-backed securities		277,826		(2,431)		—		—		277,826		(2,431)
Total temporarily impaired securities	$	340,279	$	(2,709)	$	2,374	$	(83)	$	342,653	$	(2,792)

Securities are periodically evaluated for other-than-temporary impairment (“OTTI”). The total number of securities in the investment portfolio in an unrealized loss position as of September 30, 2018 was 897, and represented an unrealized loss of 2.29% of the aggregate carrying value. As of September 30, 2018, the Company does not intend to sell such securities and it is more-likely-than-not that the Company will recover the amortized cost prior to being required to sell the securities. Full collection of the amounts due according to the contractual terms of the securities is expected; therefore, the Company does not consider these investments to be OTTI at September 30, 2018.

The Company had available for sale obligations of state and political subdivisions with a fair value of $241.9 million and $280.2 million as of September 30, 2018 and December 31, 2017, respectively. In addition, the Company had held to maturity obligations of state and political subdivisions with a fair value of $36.4 million and $41.5 million as of September 30, 2018 and December 31, 2017, respectively.

As of September 30, 2018, the fair value of the Company’s obligations of state and political subdivisions portfolio was comprised of $236.2 million of general obligation bonds and $42.1 million of revenue bonds issued by 386 issuers, primarily consisting of states, counties, cities, towns, villages and school districts. The Company held investments in general obligation bonds in 35 states, including nine states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 20 states, including three states where the aggregate fair value exceeded $5.0 million.

As of December 31, 2017, the fair value of the Company’s obligations of state and political subdivisions portfolio was comprised of $271.7 million of general obligation bonds and $50.0 million of revenue bonds issued by 446 issuers, primarily consisting of states, counties, cities, towns, villages and school districts. The Company held investments in general obligation bonds in 36 states (including the District of Columbia), including nine states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 22 states, including three states where the aggregate fair value exceeded $5.0 million.

The amortized cost and fair values of the Company’s portfolio of general obligation bonds are summarized in the following tables by the issuers’ state (dollars in thousands):


September 30, 2018:						Average Exposure
	Number of		Amortized	Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Illinois	89	$	87,902	$	86,739	$	975
Wisconsin	27		18,971		18,690		692
Texas	43		24,893		24,431		568
Michigan	25		13,589		13,620		545
Ohio	20		14,665		14,505		725
Pennsylvania	15		9,250		9,197		613
New Jersey	12		5,576		5,525		460
Missouri	9		5,556		5,472		608
California	7		8,829		8,765		1,252
Other	85		50,153		49,223		579
Total general obligations bonds	332	$	239,384	$	236,167	$	711


December 31, 2017:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Illinois	97	$	95,340	$	95,344	$	983
Wisconsin	41		27,852		27,809		678
Texas	46		27,485		27,514		598
Michigan	34		19,641		19,849		584
Ohio	20		15,172		15,162		758
Pennsylvania	18		12,189		12,174		676
New Jersey	15		7,755		7,760		517
Missouri	10		5,759		5,747		575
Minnesota	8		5,657		5,667		708
Other	92		54,649		54,633		594
Total general obligations bonds	381	$	271,499	$	271,659	$	713

The general obligation bonds are diversified across many issuers, with $4.9 million and $4.0 million being the largest exposure to a single issuer at September 30, 2018 and December 31, 2017, respectively. Accordingly, as of September 30, 2018 and December 31, 2017, the Company did not hold general obligation bonds of any single issuer, the aggregate book or market value of which exceeded 10% of the Company’s stockholders’ equity. Of the general obligation bonds in the Company’s portfolio, 99.1% had been rated by at least one nationally recognized rating organization and 0.9% were unrated as of September 30, 2018. Of the general obligation bonds in the Company’s portfolio, 99.3% had been rated by at least one nationally recognized rating organization and 0.7% were unrated, based on the aggregate fair value as of December 31, 2017.

The amortized cost and fair values of the Company’s portfolio of revenue bonds are summarized in the following tables by the issuers’ state (dollars in thousands):


September 30, 2018:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Indiana	13	$	10,902	$	10,801	$	831
Missouri	5		7,041		6,966		1,393
Illinois	5		5,218		5,128		1,026
Other	31		19,603		19,264		621
Total revenue bonds	54	$	42,764	$	42,159	$	781


December 31, 2017:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Indiana	14	$	12,001	$	12,054	$	861
Missouri	6		7,376		7,336		1,223
Illinois	7		6,477		6,456		922
Other	38		24,163		24,158		636
Total revenue bonds	65	$	50,017	$	50,004	$	769

The revenue bonds are diversified across many issuers and revenue sources with $3.5 million and $3.6 million being the largest exposure to a single issuer at each of September 30, 2018 and December 31, 2017, respectively. Accordingly, as of September 30, 2018 and December 31, 2017, the Company did not hold revenue bonds of any single issuer, the aggregate book or market value of which exceeded 10% of the Company’s stockholders’ equity. Of the revenue bonds in the Company's portfolio, 100.0% had been rated by at least one nationally recognized rating organization as of September 30, 2018. Of the revenue bonds in the Company’s portfolio, 99.4% had been rated by at least one nationally recognized rating organization and 0.6% were unrated, based on the fair value as of December 31, 2017. Some of the primary types of revenue bonds held in the Company’s portfolio include: primary education or government building lease rentals secured by ad valorem taxes, utility systems secured by utility system net revenues, housing authorities secured by mortgage loans or principal receipts on mortgage loans, secondary education secured by student fees/tuitions, and pooled issuances (i.e. bond bank) consisting of multiple underlying municipal obligors.

At September 30, 2018, all of the Company’s obligations of state and political subdivision securities are owned by its subsidiary bank, which has adopted First Busey’s investment policy requiring that state and political subdivision securities purchased be investment grade. Such investment policy also limits the amount of rated state and political subdivision securities to an aggregate 100% of the subsidiary bank’s total capital (as defined by federal regulations) at the time of purchase and an aggregate 15% of total capital for unrated state and political subdivision securities issued by municipalities having taxing authority or located in counties/micropolitan statistical areas/metropolitan statistical areas in which an office is located.

All securities in First Busey’s obligations of state and political subdivision securities portfolio are subject to periodic review. Factors that may be considered as part of monitoring of state and political subdivision securities include credit rating changes by nationally recognized rating organizations, market valuations, third-party municipal credit analysis, which may include indicative information regarding the issuer’s capacity to pay, market and economic data and such other factors as are available and relevant to the security or the issuer such as its budgetary position and sources, strength and stability of taxes and/or other revenue.

Loans held for sale

9 Months Ended

Sep. 30, 2018

Loans held for sale

Loans held for sale

Note 4: Loans held for sale

Loans held for sale totaled $32.6 million and $94.8 million at September 30, 2018 and December 31, 2017, respectively. The amount of loans held for sale decreased from December 31, 2017, due to lower origination volumes and the timing of sales. Loans held for sale generate net interest income until loans are delivered to investors, at which point mortgage revenue will be recognized.

The following is a summary of mortgage revenue (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Premiums received on sales of mortgage loans, including fair value adjustments	$	2,794	$	11,366	$	9,779	$	33,582
Less direct origination costs		(1,976)		(8,398)		(6,805)		(26,433)
Less provisions to liability for loans sold		(47)		(25)		(156)		(200)
Mortgage servicing revenues, net of servicing expense		501		583		1,670		1,481
Mortgage revenue	$	1,272	$	3,526	$	4,488	$	8,430

Portfolio loans

9 Months Ended

Sep. 30, 2018

Portfolio loans

Portfolio loans

Note 5: Portfolio loans

The distribution of portfolio loans at September 30, 2018 and December 31, 2017 is as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
Commercial	$	1,461,186	$	1,414,631
Commercial real estate		2,371,868		2,354,684
Real estate construction		308,762		261,506
Retail real estate		1,453,266		1,460,801
Retail other		28,659		27,878
Portfolio loans	$	5,623,741	$	5,519,500

Less allowance for loan losses		52,743		53,582
Portfolio loans, net	$	5,570,998	$	5,465,918

Net deferred loan origination costs included in the table above were $5.6 million as of September 30, 2018 and $4.1 million as of December 31, 2017. Net accretable purchase accounting adjustments included in the table above reduced loans by $15.8 million as of September 30, 2018 and $23.6 million as of December 31, 2017.

The Company believes that making sound loans is a necessary and desirable means of employing funds available for investment. Authorized personnel are expected to seek to develop and make sound, profitable loans that resources permit and that opportunity affords. The Company maintains lending policies and procedures designed to focus lending efforts on the types, locations and duration of loans most appropriate for its business model and markets. While not specifically limited, the Company attempts to focus its lending on short to intermediate-term (0-7 years) loans in geographic areas within 125 miles of its lending offices. Loans originated outside of these areas are generally residential mortgage loans originated for sale in the secondary market or are loans to existing customers of the Bank.

The Company attempts to utilize government-assisted lending programs, such as the Small Business Administration and United States Department of Agriculture lending programs, when prudent. Generally, loans are collateralized by assets, primarily real estate, of the borrowers and guaranteed by individuals. The loans are expected to be repaid primarily from cash flows of the borrowers, or from proceeds from the sale of selected assets of the borrowers.

Management reviews and approves the Company’s lending policies and procedures on a routine basis. The policies for legacy First Community and South Side Bank loans were similar in nature to Busey Bank’s policies and the Company is migrating such loan production towards the Busey Bank policies. Management routinely (at least quarterly) reviews the Company’s allowance for loan losses in conjunction with reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. The Company’s underwriting standards are designed to encourage relationship banking rather than transactional banking. Relationship banking implies a primary banking relationship with the borrower that includes, at a minimum, an active deposit banking relationship in addition to the lending relationship. Additional significant underwriting factors beyond location, duration, a sound and profitable cash flow basis and the borrower’s character include the quality of the borrower’s financial history, the liquidity of the underlying collateral and the reliability of the valuation of the underlying collateral.

At no time is a borrower’s total borrowing relationship permitted to exceed the Company’s regulatory lending limit and the Company generally limits such relationships to amounts substantially less than the regulatory limit. Loans to related parties, including executive officers and directors of the Company and its subsidiaries, are reviewed for compliance with regulatory guidelines by the Company’s board of directors at least annually.

The Company maintains an independent loan review department that reviews the loans for compliance with the Company’s loan policy on a periodic basis. In addition, the loan review department reviews the risk assessments made by the Company’s credit department, lenders and loan committees. Results of these reviews are presented to management and the audit committee at least quarterly.

The Company’s lending activities can be summarized into five primary areas: commercial loans, commercial real estate loans, real estate construction loans, retail real estate loans, and retail other loans. A description of each of the lending areas can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The significant majority of the Company’s portfolio lending activity occurs in its Illinois and Missouri markets, with the remainder in the Indiana and Florida markets.

The Company utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows:

Pass- This category includes loans that are all considered strong credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that exceed industry standards and loan policy guidelines and loans that exhibit acceptable credit fundamentals.

Watch- This category includes loans on management’s “Watch List” and is intended to be utilized on a temporary basis for a pass grade borrower where a significant risk-modifying action is anticipated in the near future.

Special mention- This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect the Company’s credit position at some future date.

Substandard- This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful- This category includes “Doubtful” loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine.

All loans are graded at their inception. Most commercial lending relationships that are $1.0 million or less are processed through an expedited underwriting process. If the credit receives a pass grade, it is aggregated into a homogenous pool of either: $0.35 million or less, or $0.35 million to $1.0 million. These pools are monitored on a regular basis and reviewed annually. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more timely review.

Portfolio loans in the highest grades, represented by the pass and watch categories, totaled $5.4 billion and $5.3 billion at September 30, 2018 and December 31, 2017, respectively. Portfolio loans in the lowest grades, represented by the special mention, substandard and doubtful categories, totaled $279.0 million at September 30, 2018, compared to $193.8 million at December 31, 2017.

The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands):


	September 30, 2018
					Special
	Pass		Watch		Mention		Substandard		Doubtful
Commercial	$	1,205,074	$	136,262	$	51,840	$	48,266	$	20,994
Commercial real estate		2,098,441		146,634		76,941		46,267		13,417
Real estate construction		289,134		14,977		3,110		1,923		21
Retail real estate		1,427,792		4,162		4,613		5,690		5,931
Retail other		28,919		—		—		—		32
Total	$	5,049,360	$	302,035	$	136,504	$	102,146	$	40,395


	December 31, 2017
					Special
	Pass		Watch		Mention		Substandard		Doubtful
Commercial	$	1,175,421	$	141,776	$	51,366	$	43,933	$	5,285
Commercial real estate		2,169,420		130,056		21,151		36,482		11,997
Real estate construction		212,952		41,292		3,880		3,071		608
Retail real estate		1,436,156		6,883		5,162		4,135		6,714
Retail other		28,300		9		—		7		20
Total	$	5,022,249	$	320,016	$	81,559	$	87,628	$	24,624

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of the principal due. Loans may be returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

A summary of portfolio loans that are past due and still accruing or on a non-accrual status is as follows (dollars in thousands):


	September 30, 2018
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	284	$	13	$	100	$	20,994
Commercial real estate		1,123		86		—		13,417
Real estate construction		280		651		—		21
Retail real estate		4,111		1,478		264		5,931
Retail other		157		6		—		32
Total	$	5,955	$	2,234	$	364	$	40,395


	December 31, 2017
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	1,615	$	323	$	1,808	$	5,285
Commercial real estate		1,856		2,737		—		11,997
Real estate construction		—		—		—		608
Retail real estate		4,840		1,355		933		6,714
Retail other		166		5		—		20
Total	$	8,477	$	4,420	$	2,741	$	24,624

A loan is classified as impaired when, based on current information and events, it is probable the Company will be unable to collect scheduled principal and interest payments when due according to the terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Loans graded substandard or doubtful and loans classified as a troubled debt restructuring (“TDR”) are reviewed by the Company for potential impairment.

If a loan is impaired, impairment is measured on a loan-by-loan basis for commercial and construction loans based on the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. PCI loans are considered impaired. Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment unless such loans are the subject of a restructuring agreement.

The gross interest income that would have been recorded in the three and nine months ended September 30, 2018 if impaired loans had been current in accordance with their original terms was $0.4 million and $1.1 million, respectively. The gross interest income that would have been recorded in the three and nine months ended September 30, 2017 if impaired loans had been current in accordance with their original terms was $0.4 million and $0.9 million, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was insignificant for the three and nine months ended September 30, 2018 and 2017.

The Company’s loan portfolio includes certain loans that have been modified in a TDR, where concessions have been granted to borrowers who have experienced financial difficulties. The Company will restructure a loan for its customer after evaluating whether the borrower is able to meet the terms of the loan over the long term, though unable to meet the terms of the loan in the near term due to individual circumstances.

The Company considers the customer’s past performance, previous and current credit history, the individual circumstances surrounding the customer’s current difficulties and the customer’s plan to meet the terms of the loan in the future prior to restructuring the terms of the loan. Generally, restructurings consist of short-term interest rate relief, short-term principal payment relief, short-term principal and interest payment relief or forbearance (debt forgiveness). A restructured loan that exceeds 90 days past due or is placed on non-accrual status is classified as non-performing. A summary of restructured loans is as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
In compliance with modified terms	$	8,695	$	9,873
30 — 89 days past due		—		108
Included in non-performing loans		1,541		1,919
Total	$	10,236	$	11,900

All TDRs are considered to be impaired for purposes of assessing the adequacy of the allowance for loan losses and for financial reporting purposes. When the Company modifies a loan in a TDR, it evaluates any possible impairment similar to other impaired loans based on present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. If the Company determines that the fair value of the TDR is less than the recorded investment in the loan, impairment is recognized through an allowance estimate in the period of the modification and in periods subsequent to the modification.

There were no loans classified as TDRs during the three months ended September 30, 2018. Loans classified as TDRs during the nine months ended September 30, 2018 included one retail real estate modification for short-term interest rate relief, with a recorded investment of $0.1 million.

Loans classified as TDRs during the three months ended September 30, 2017 included one retail real estate modification for short-term interest rate relief, with a recorded investment of $0.2 million. Loans classified as TDRs during the nine months ended September 30, 2017 included one commercial modification for short-term principal payment relief, with a recorded investment of $1.7 million, and two retail real estate modifications for short-term interest rate relief, with a recorded investment of $0.5 million.

The gross interest income that would have been recorded in the three and nine months ended September 30, 2018 and 2017 if TDRs had performed in accordance with their original terms compared with their modified terms was insignificant.

There were no TDRs that were entered into during the last twelve months that were subsequently classified as non-performing and had payment defaults (a default occurs when a loan is 90 days or more past due or transferred to non-accrual) during the three and nine months ended September 30, 2018.

There were no TDRs that were entered into during the prior twelve months that were subsequently classified as non-performing and had payment defaults during the three and nine months ended September 30, 2017.

The following tables provide details of loans identified as impaired, segregated by category. The unpaid contractual principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan. The average recorded investment is calculated using the most recent four quarters (dollars in thousands).


	September 30, 2018
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	24,479	$	9,518	$	11,713	$	21,231	$	3,691	$	11,395
Commercial real estate		19,994		12,851		6,197		19,048		1,572		18,528
Real estate construction		429		405		—		405		—		826
Retail real estate		13,395		12,103		100		12,203		100		14,361
Retail other		117		32		—		32		—		43
Total	$	58,414	$	34,909	$	18,010	$	52,919	$	5,363	$	45,153


	December 31, 2017
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	10,604	$	7,192	$	191	$	7,383	$	138	$	10,184
Commercial real estate		22,218		16,472		1,964		18,436		704		15,195
Real estate construction		1,040		1,016		—		1,016		—		692
Retail real estate		18,517		14,957		25		14,982		25		13,009
Retail other		40		20		—		20		—		44
Total	$	52,419	$	39,657	$	2,180	$	41,837	$	867	$	39,124

Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.

Allowance for Loan Losses

The allowance for loan losses represents an estimate of the amount of probable losses believed to be inherent in the Company’s loan portfolio at the Consolidated Balance Sheet date. The allowance for loan losses is calculated by segmenting loans geographically, by product type and by risk classification. The allowance calculation involves a high degree of estimation that management attempts to mitigate through the use of objective historical data where available. Loan losses are charged against the allowance for loan losses when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Overall, the Company believes the allowance methodology is consistent with prior periods and the balance was adequate to cover the estimated losses in the Company’s loan portfolio at September 30, 2018 and December 31, 2017.

The general portion of the Company’s allowance contains two components: (i) a component for historical loss ratios, and (ii) a component for adversely graded loans. The historical loss ratio component is an annualized loss rate calculated using a sum-of-years digits weighted 20-quarter historical average.

The Company’s component for adversely graded loans attempts to quantify the additional risk of loss inherent in the special mention and substandard portfolios. The substandard portfolio has an additional allocation of 3.0% placed on such loans, which is an estimate of the additional loss inherent in these loan grades based upon a review of overall historical charge-offs. As of September 30, 2018, the Company believed this reserve remained adequate. Special mention loans have an additional allocation of 1.0% placed on such loans, which is an estimate of the additional loss inherent in these loan grades. As of September 30, 2018, the Company believed this reserve remained adequate.

The specific portion of the Company’s allowance relates to loans that are impaired, which includes non-performing loans, TDRs and other loans determined to be impaired. Impaired loans are excluded from the determination of the general allowance for non-impaired loans and are allocated specific reserves as discussed above.

Impaired loans are reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. Collateral values are estimated using a combination of observable inputs, including recent appraisals discounted for collateral specific changes and current market conditions, and unobservable inputs based on customized discounting criteria.

The general reserve quantitative allocation that is based upon historical charge off rates is adjusted for qualitative factors based on current general economic conditions and other qualitative risk factors both internal and external to the Company. In general, such valuation allowances are determined by evaluating, among other things: (i) Management & Staff; (ii) Loan Underwriting, Policy and Procedures; (iii) Internal/External Audit & Loan Review; (iv) Valuation of Underlying Collateral; (v) Macro and Local Economic Factors; (vi) Impact of Competition, Legal & Regulatory Issues; (vii) Nature and Volume of Loan Portfolio; (viii) Concentrations of Credit; (ix) Net Charge-Off Trends; and (x) Non-Accrual, Past Due and Classified Trends. Management evaluates the probable impact from the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Based on each component’s risk factor, a qualitative adjustment to the reserve may be applied to the appropriate loan categories. The Company monitors its qualitative factors on a quarterly basis.

The Company holds acquired loans from business combinations with uncollected principal balances. These loans are carried net of a fair value adjustment for credit risk and interest rates and are only included in the allowance calculation to the extent that the reserve requirement exceeds the fair value adjustment. As the acquired loans renew, it is generally necessary to establish an allowance, which represents an amount that, in management’s opinion, will be adequate to absorb probable credit losses in such loans. The balance of all acquired loans as of September 30, 2018 totaled approximately $1.3 billion.

The following table details activity in the allowance for loan losses. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):


	As of and for the Three Months Ended September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,586	$	23,047	$	2,915	$	9,293	$	464	$	53,305
Provision for loan losses		2,388		(1,291)		(15)		(399)		75		758
Charged-off		(1,144)		(62)		—		(695)		(286)		(2,187)
Recoveries		136		58		32		423		218		867
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743


	As of and for the Nine Months Ended September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582
Provision for loan losses		7,111		1,154		22		(4,609)		346		4,024
Charged-off		(3,841)		(1,487)		(97)		(1,637)		(608)		(7,670)
Recoveries		917		272		146		1,085		387		2,807
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743


	As of and for the Three Months Ended September 30, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	12,928	$	20,124	$	2,161	$	13,681	$	307	$	49,201
Provision for loan losses		336		418		64		654		22		1,494
Charged-off		(60)		(69)		—		(482)		(74)		(685)
Recoveries		318		403		36		223		45		1,025
Ending balance	$	13,522	$	20,876	$	2,261	$	14,076	$	300	$	51,035


	As of and for the Nine Months Ended September 30, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	13,303	$	20,623	$	1,870	$	11,648	$	351	$	47,795
Provision for loan losses		(1,885)		1,477		1		2,894		7		2,494
Charged-off		(241)		(1,758)		(48)		(1,574)		(257)		(3,878)
Recoveries		2,345		534		438		1,108		199		4,624
Ending balance	$	13,522	$	20,876	$	2,261	$	14,076	$	300	$	51,035

The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands):


	As of September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Amount allocated to:
Loans individually evaluated for impairment	$	3,691	$	1,572	$	—	$	100	$	—	$	5,363
Loans collectively evaluated for impairment		15,275		20,180		2,932		8,522		471		47,380
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743

Loans:
Loans individually evaluated for impairment	$	20,807	$	16,752	$	405	$	12,047	$	32	$	50,043
Loans collectively evaluated for impairment		1,439,955		2,352,820		308,357		1,441,063		28,627		5,570,822
PCI loans evaluated for impairment		424		2,296		—		156		—		2,876
Ending balance	$	1,461,186	$	2,371,868	$	308,762	$	1,453,266	$	28,659	$	5,623,741


	As of December 31, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Amount allocated to:
Loans individually evaluated for impairment	$	138	$	704	$	—	$	25	$	—	$	867
Loans collectively evaluated for impairment		14,641		21,109		2,861		13,758		346		52,715
Ending balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582

Loans:
Loans individually evaluated for impairment	$	6,572	$	11,491	$	435	$	12,673	$	20	$	31,191
Loans collectively evaluated for impairment		1,407,248		2,336,248		260,490		1,445,819		27,858		5,477,663
PCI loans evaluated for impairment		811		6,945		581		2,309		—		10,646
Ending balance	$	1,414,631	$	2,354,684	$	261,506	$	1,460,801	$	27,878	$	5,519,500

OREO

9 Months Ended

Sep. 30, 2018

OREO.

OREO

Note 6: OREO

OREO represents properties acquired through foreclosure or other proceedings in settlement of loans and is included in other assets in the accompanying Consolidated Balance Sheets. OREO is held for sale and is recorded at the date of foreclosure at the fair value of the properties less estimated costs of disposal, which establishes a new cost basis. Any adjustment to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Properties are evaluated regularly to ensure each recorded amount is supported by its current fair value, and valuation allowances to reduce the carrying amount due to subsequent declines in fair value less estimated costs to dispose are recorded as necessary. Revenue, expense, gains and losses from the operations of foreclosed assets are included in operations. At September 30, 2018, the Company held $0.2 million in commercial OREO, $0.9 million in residential OREO and an insignificant amount of other repossessed assets. At December 31, 2017, the Company held $1.2 million in commercial OREO, $0.1 million in residential OREO and an insignificant amount of other repossessed assets. At September 30, 2018 the Company had $2.4 million of residential real estate in the process of foreclosure.

The following table summarizes activity related to OREO (dollars in thousands):


	Nine Months Ended		Year Ended
	September 30, 2018		December 31, 2017
OREO:
Beginning balance	$	1,283	$	2,518
Additions, transfers from loans		3,706		1,417
Additions, fair value from First Community acquisition		—		722
Additions, fair value from Mid Illinois acquisition		—		60
Proceeds from sales of OREO		(4,275)		(5,024)
Gain on sales of OREO		397		1,632
Valuation allowance for OREO		(18)		(42)
Ending balance	$	1,093	$	1,283

- Definition

The entire disclosure for real estate owned (as defined). Generally, the largest component of real estate owned by lenders is assets taken in settlement of troubled loans through surrender or foreclosure. Real estate investments, real estate loans that qualify as investments in real estate, and premises that are no longer used in operations may also be included in real estate owned.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=84176060&loc=d3e18551-111553

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84176060&loc=d3e18511-111553

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=82891408&loc=d3e4437-111522

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=29634951&loc=d3e1424-110224

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section S99
-Paragraph 6
-Subparagraph (SX 210.5-04(c)(Schedule III))
-URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(10)(4))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 970
-SubTopic 360
-Section S99
-Paragraph 1
-Subparagraph (SX 210.12-28)
-URI http://asc.fasb.org/extlink&oid=6590653&loc=d3e638233-123024

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 43
-URI http://asc.fasb.org/extlink&oid=29634951&loc=d3e1739-110224

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(8))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

+ Details

Deposits

9 Months Ended

Sep. 30, 2018

Deposits

Deposits

Note 7: Deposits

The composition of deposits is as follows (dollars in thousands):


	September 30, 2018		December 31, 2017
Demand deposits, noninterest-bearing	$	1,438,054	$	1,597,421
Interest-bearing transaction deposits		1,325,702		1,166,170
Saving deposits and money market deposits		1,879,530		2,026,212
Time deposits		1,552,283		1,336,162
Total	$	6,195,569	$	6,125,965

The Company held brokered interest-bearing transaction deposits of $5.0 million at September 30, 2018 and December 31, 2017. The Company held brokered saving deposits and money market deposits of $30.0 million and $75.1 million at September 30, 2018 and December 31, 2017, respectively.

The aggregate amount of time deposits with a minimum denomination of $100,000 was approximately $655.7 million and $578.9 million at September 30, 2018 and December 31, 2017, respectively. The aggregate amount of time deposits with a minimum denomination that meets or exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 was approximately $249.7 million and $197.9 million at September 30, 2018 and December 31, 2017, respectively. The Company held brokered time deposits of $351.1 million and $247.7 million at September 30, 2018 and December 31, 2017, respectively.

As of September 30, 2018, the scheduled maturities of time deposits are as follows (dollars in thousands):


October 1, 2018 – September 30, 2019	$	1,087,015
October 1, 2019 – September 30, 2020		293,053
October 1, 2020 – September 30, 2021		58,166
October 1, 2021 – September 30, 2022		73,509
October 1, 2022 – September 30, 2023		40,524
Thereafter		16
	$	1,552,283

Borrowings

9 Months Ended

Sep. 30, 2018

Borrowings

Borrowings

Note 8: Borrowings

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by the Company’s safekeeping agent. The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities.

Short-term borrowings include FHLB advances which mature in less than one year from date of origination.

On April 30, 2018, the Company entered into a third amendment to extend the maturity of its revolving loan facility from April 30, 2018 to April 30, 2019, to decrease the maximum principal amount from $40.0 million to $20.0 million, and to amend the annual interest rate. The revolving loan facility also bears a non-usage fee calculated based on the average daily principal balance of the loan outstanding during the prior fiscal quarter. The Company had no outstanding amount on September 30, 2018 or December 31, 2017.

The following table sets forth the distribution of securities sold under agreements to repurchase and short-term borrowings and weighted average interest rates (dollars in thousands):


	September 30,			December 31,
	2018			2017
Securities sold under agreements to repurchase
Balance at end of period	$	255,906		$	304,566
Weighted average interest rate at end of period		0.85	%		0.57	%
Maximum outstanding at any month end in year-to-date period	$	267,596		$	304,566
Average daily balance for the year-to-date period	$	242,268		$	213,527
Weighted average interest rate during period(1)		0.62	%		0.46	%

Short-term borrowings, FHLB advances
Balance at end of period	$	200,000		$	220,000
Weighted average interest rate at end of period		2.24	%		1.42	%
Maximum outstanding at any month end in year-to-date period	$	225,000		$	234,600
Average daily balance for the year-to-date period	$	93,022		$	84,201
Weighted average interest rate during period(1)		1.73	%		1.20	%

(1)

The weighted average interest rate is computed by dividing total annualized interest for the year-to-date period by the average daily balance outstanding.

Long-term debt is summarized as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
Notes payable, FHLB, ranging in original maturity from nineteen months to ten years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock.	$	50,000	$	50,000

As of September 30, 2018, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 2.01% to 2.18%. The weighted average rate on the long-term advances was 2.08% as of September 30, 2018. As of December 31, 2017, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 1.10% to 1.32%. The weighted average rate on the long-term advances was 1.19% as of December 31, 2017.

On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, are at an initial rate of 4.75% for five years and thereafter at an annual floating rate equal to three-month LIBOR plus a spread of 2.919%. The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017 during the five year fixed-term and thereafter each February 25, May 25, August 25 and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.5 million and $0.9 million, respectively, at September 30, 2018. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.6 million and $1.0 million, respectively, at December 31, 2017. The Company used the net proceeds from the offering to finance a portion of the cash consideration for its acquisition of First Community, to redeem a portion of First Community subordinated debentures in July 2017, and to finance a portion of the cash consideration for its acquisition of Mid Illinois in October 2017, with the remaining proceeds used for general corporate purposes.

In relation to the First Community acquisition, the Company assumed $15.3 million in subordinated debt, of which $9.8 million was simultaneously redeemed. A $0.3 million purchase accounting premium was recorded on the remaining subordinated debt. The remaining $5.5 million was issued on September 30, 2013, and the Company, at its option, redeemed the note at a redemption price equal to the principal amount outstanding plus accrued but unpaid interest on September 30, 2018.

Junior Subordinated Debt Owed to Unconsolidated Trusts	9 Months Ended
Junior Subordinated Debt Owed to Unconsolidated Trusts	Sep. 30, 2018
Junior Subordinated Debt Owed to Unconsolidated Trusts
Junior Subordinated Debt Owed to Unconsolidated Trusts	Note 9: Junior Subordinated Debt Owed to Unconsolidated Trusts First Busey maintains statutory trusts for the sole purpose of issuing and servicing trust preferred securities and related trust common securities. The proceeds from such issuances were used by the trusts to purchase junior subordinated notes of the Company, which are the sole assets of each trust. Concurrent with the issuance of the trust preferred securities, the Company issued guarantees for the benefit of the holders of the trust preferred securities. The trust preferred securities are instruments that qualify, and are treated by the Company, as Tier 1 regulatory capital. The Company owns all of the common securities of each trust. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment. In connection with the Pulaski acquisition in 2016, the Company acquired similar statutory trusts maintained by Pulaski and the fair value adjustment is being accreted over the weighted average remaining life. The Company had $71.1 million and $71.0 million of junior subordinated debt owed to unconsolidated trusts at September 30, 2018 and December 31, 2017, respectively. The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated notes at par value at the stated maturity date or upon redemption. Each trust’s ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated notes. The Company’s obligations under the junior subordinated notes and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of each trust’s obligations under the trust preferred securities issued by each trust. The Company has the right to defer payment of interest on the notes, in which case the distributions on the trust preferred securities will also be deferred, for up to five years, but not beyond the stated maturity date. Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of September 30, 2018, 100% of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005. The Dodd-Frank Act mandated the Federal Reserve to establish minimum capital levels for holding companies on a consolidated basis as stringent as those required for FDIC-insured institutions. A result of this change is that the proceeds of hybrid instruments, such as trust preferred securities, are excluded from capital over a phase-out period. However, if such securities were issued prior to May 19, 2010 by bank holding companies with less than $15.0 billion of assets, they may be retained, subject to certain restrictions. Because the Company has assets of less than $15.0 billion, it is able to maintain its trust preferred proceeds as capital, but the Company has to comply with new capital mandates in other respects and will not be able to raise capital in the future through the issuance of trust preferred securities.

Earnings Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Common Share

Earnings Per Common Share

Note 10: Earnings Per Common Share

Earnings per common share have been computed as follows (in thousands, except per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income available to common stockholders	$	26,859	$	18,784	$	73,638	$	50,433
Shares:
Weighted average common shares outstanding		48,892		45,324		48,828		40,669
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method		355		440		388		400

Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		49,247		45,764		49,216		41,069

Basic earnings per common share	$	0.55	$	0.41	$	1.51	$	1.24

Diluted earnings per common share	$	0.55	$	0.41	$	1.50	$	1.23

Basic earnings per share are computed by dividing net income available to common stockholders for the period by the weighted average number of common shares outstanding, which include deferred stock units that are vested but not delivered.

Diluted earnings per common share are computed using the treasury stock method and reflect the potential dilution that could occur if the Company’s outstanding stock options and warrants were exercised and restricted stock units were vested. Stock options, warrants and restricted stock units for which the exercise or the grant price exceeds the average market price over the period have an anti-dilutive effect and are excluded from the calculation. At September 30, 2018, 172,571 outstanding restricted stock units and 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents. At September 30, 2017, 78,540 outstanding options and 191,278 warrants were anti-dilutive and excluded from the calculation of common stock equivalents.

Share-based Compensation

9 Months Ended

Sep. 30, 2018

Share-based Compensation

Share-based Compensation

Note 11: Share-based Compensation

The Company grants share-based compensation awards to its employees and members of its board of directors as provided for under the Company’s 2010 Equity Incentive Plan. In addition, pursuant to the terms of the First Community 2016 Equity Incentive Plan, the Company may grant awards with respect to First Busey common stock to legacy employees and directors of First Community or its subsidiaries. Permissible awards under the plan include, but are not limited to, non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock and restricted stock units.

The Company currently grants share-based compensation in the form of restricted stock units (“RSUs”) and deferred stock units (“DSUs”). The Company grants RSUs to members of management periodically throughout the year. Each RSU is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years. The Company annually grants share-based awards in the form of DSUs, which are RSUs with a deferred settlement date, to its board of directors and advisory directors. Each DSU is equivalent to one share of the Company’s common stock. The DSUs vest on the first anniversary of the grant date or on the date of the next Annual Meeting of Stockholders, whichever is earlier. These units generally are subject to the same terms as RSUs under the Company’s 2010 Equity Incentive Plan or the First Community 2016 Equity Incentive Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a change in control of the Company. Subsequent to vesting and prior to delivery, these units will continue to earn dividend equivalents. The Company also has outstanding stock options granted prior to 2011 and stock options assumed from acquisitions.

Under the terms of the Company’s 2010 Equity Incentive Plan and the First Community 2016 Equity Incentive Plan, the Company is allowed, but not required, to source stock option exercises and grants of RSUs and DSUs from its inventory of treasury stock. As of September 30, 2018, the Company held 325,272 shares in treasury. On February 3, 2015, First Busey announced that its board of directors approved a repurchase plan under which the Company is authorized to repurchase up to an aggregate of 666,667 shares of its common stock. The repurchase plan has no expiration date and replaced the prior repurchase plan originally approved in 2008. During 2015, the Company purchased 333,333 shares under this repurchase plan. At September 30, 2018 the Company had 333,334 shares that may still be purchased under the plan.

The Company’s 2010 Equity Incentive Plan is designed to encourage ownership of its common stock by its employees and directors, to provide additional incentive for them to promote the success of the Company’s business, and to attract and retain talented personnel. All of the Company’s employees and directors, and those of its subsidiaries, are eligible to receive awards under the plan.

A description of the 2010 Equity Incentive Plan, which was amended in 2015, can be found in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders. A description of the First Community 2016 Equity Incentive Plan can be found in the Proxy Statement of First Community Financial Partners, Inc. for the 2016 Annual Meeting of Stockholders.

Stock Option Plan

A summary of the status of and changes in the Company's stock option awards for the nine months ended September 30, 2018 follows:


		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining Contractual
	Shares	Price		Term
Outstanding at beginning of year	213,428	$	16.97
Exercised	(85,518)		13.90
Forfeited	(14,035)		21.81
Expired	(2,762)		16.15
Outstanding at end of period	111,113	$	18.75	4.66
Exercisable at end of period	73,469	$	16.30	2.87

The Company recorded $0.1 and $0.2 million in stock option compensation expense for the three and nine months ended September 30, 2018, respectively, related to the converted options from First Community. The Company recorded $0.1 million in stock option compensation expense for the three and nine months ended September 30, 2017. As of September 30, 2018, the Company had $0.2 million of unrecognized stock option expense. This cost is expected to be recognized over a period of 1.1 years.

Restricted Stock Unit Plan

A summary of the changes in the Company’s stock unit awards for the nine months ended September 30, 2018, is as follows:


		Weighted-		Director	Weighted-
	Restricted	Average		Deferred	Average
	Stock	Grant Date		Stock	Grant Date
	Units	Fair Value		Units	Fair Value
Non-vested at beginning of year	587,763	$	22.68	42,411	$	25.47
Reclass DSU to RSU	23,977		25.47	(23,977)		25.47
Granted	172,571		31.70	20,500		31.70
Dividend equivalents earned	11,870		31.05	1,669		30.98
Vested	(104,512)		16.40	(20,103)		29.74
Forfeited	(6,183)		24.84	—		—
Non-vested at end of period	685,486	$	26.13	20,500	$	27.97
Outstanding at end of period	685,486	$	26.13	86,270	$	22.41

Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances. Upon vesting/delivery, shares are expected (though not required) to be issued from treasury.

On August 1, 2018, under the terms of the 2010 Equity Incentive Plan, the Company granted 152,926 RSUs to members of management, and under the terms of the First Community 2016 Equity Incentive Plan, granted 12,545 RSUs to members of management who were legacy First Community employees. As the stock price on the grant date of August 1, 2018 was $31.70, total compensation cost to be recognized is $5.2 million. This cost will be recognized over a period of four to five years. Subsequent to the requisite service period, the awards will become 100% vested. Further, the Company granted 7,100 RSUs, under the terms of the 2010 Equity Incentive Plan, to the Chairman of the Board. As the stock price on the grant date of August 1, 2018 was $31.70, total compensation cost to be recognized is $0.2 million. This cost will be recognized over a period of five years. Subsequent to the requisite service period, the awards will become 100% vested.

On August 1, 2018, under the terms of the 2010 Equity Incentive Plan, the Company granted 17,500 DSUs to directors, and under the terms of the First Community 2016 Equity Incentive Plan, granted 1,500 DSUs to a director who was a legacy First Community director. In addition, under the terms of the 2010 Equity Incentive Plan, the Company granted 1,500 advisory DSUs to advisory directors. As the stock price on the grant date of August 1, 2018 was $31.70, total compensation cost to be recognized is $0.6 million. These costs will be recognized over the requisite service period of one year from the date of grant or the next Annual Meeting of Stockholders, whichever is earlier.

The Company recognized $0.9 million and $0.7 million of compensation expense related to non-vested RSUs and DSUs for the three months ended September 30, 2018 and 2017, respectively. The Company recognized $2.5 million and $1.9 million of compensation expense related to non-vested RSUs and DSUs for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, there was $12.0 million of total unrecognized compensation cost related to these non-vested RSUs and DSUs. This cost is expected to be recognized over a period of 3.8 years.

As of September 30, 2018, 740,943 shares remain available for issuance pursuant to the Company’s 2010 Equity Incentive Plan, 75,674 shares remain available for issuance pursuant to the Company’s Employee Stock Purchase Plan and 305,781 shares remain available for issuance pursuant to the First Community 2016 Equity Incentive Plan.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Taxes
Income Taxes	Note 12: Income Taxes At September 30, 2018, the Company was not under examination by any tax authority.

Outstanding Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2018

Outstanding Commitments and Contingent Liabilities

Outstanding Commitments and Contingent Liabilities

Note 13: Outstanding Commitments and Contingent Liabilities

Legal Matters

The Company is a party to legal actions which arise in the normal course of its business activities. In the opinion of management, the ultimate resolution of these matters is not expected to have a material effect on the financial position or the results of operations of the Company.

Credit Commitments and Contingencies

The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the unaudited Consolidated Balance Sheets.

The Company’s exposure to credit loss is represented by the contractual amount of those commitments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands):


	September 30, 2018		December 31, 2017
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	1,296,406	$	1,300,294
Standby letters of credit		33,244		37,231

Commitments to extend credit are agreements to lend to a customer as long as no condition established in the contract has been violated. These commitments are generally at variable interest rates and generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. These commitments may be secured based on management’s credit evaluation of the borrower.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer’s obligation to a third-party. Those guarantees are primarily issued to support public and private borrowing arrangements, including bond financing and similar transactions and primarily have terms of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds collateral, which may include accounts receivable, inventory, property and equipment, and income producing properties, supporting those commitments if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount shown in the summary above. If the commitment is funded, the Company would be entitled to seek recovery from the customer. As of September 30, 2018 and December 31, 2017, no amounts were recorded as liabilities for the Company’s potential obligations under these guarantees.

Capital

9 Months Ended

Sep. 30, 2018

Capital

Capital

Note 14: Capital

The ability of the Company to pay cash dividends to its stockholders and to service its debt was historically dependent on the receipt of cash dividends from its subsidiaries. Under applicable regulatory requirements, an Illinois state-chartered bank such as Busey Bank may not pay dividends in excess of its net profits. Because Busey Bank had been in a retained earnings deficit position since 2009, it was not able to pay dividends. With prior approval from its regulators, however, an Illinois state-chartered bank in that situation was able to reduce its capital stock by amending its charter to decrease the authorized number of shares, and then make a subsequent distribution to its holding company. Using this approach, and with the approval of its regulators, Busey Bank has distributed funds to the Company, the most recent of which was $40.0 million on October 12, 2018. Busey Bank returned to positive retained earnings in the second quarter of 2018. The Company expects Busey Bank to return to paying dividends in future periods.

The Company and Busey Bank are subject to regulatory capital requirements administered by federal and/or state agencies that involve the quantitative measure of their assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. Quantitative measures established by regulations to ensure capital adequacy require the Company and Busey Bank to maintain minimum dollar amounts and ratios of such to risk weighted assets (as defined in the regulations and set forth in the table below) of total capital, Tier 1 capital and Common Equity Tier 1 capital, and for the bank, Tier 1 capital to average assets. Failure to meet minimum capital requirements may cause regulatory bodies to initiate certain discretionary and/or mandatory actions that, if undertaken, could have a direct material effect on our unaudited Consolidated Financial Statements. The Company, as a financial holding company, is required to be “well capitalized” in the capital categories shown in the table below. As of September 30, 2018, the Company and Busey Bank met all capital adequacy requirements to which they were subject, including the guidelines to be considered “well capitalized.”

The Dodd-Frank Act established minimum capital levels for bank holding companies on a consolidated basis. The components of Tier 1 capital are restricted to capital instruments that, at the time of signing, were considered to be Tier 1 capital for insured depository institutions. Under this legislation, the Company is able to maintain its trust preferred securities as Tier 1 capital, but it will have to comply with new capital mandates in other respects, and it will not be able to raise Tier 1 capital through the issuance of trust preferred securities in the future.

In July 2013, the U.S. federal banking authorities approved the implementation of the Basel III Rule required by the Dodd-Frank Act. The Basel III Rule is applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally non-public bank holding companies with consolidated assets of less than $1.0 billion). The Basel III Rule not only increased most of the required minimum regulatory capital ratios, but they also introduced a new Common Equity Tier 1 Capital ratio and the concept of a capital conservation buffer.

The Basel III Rule also expanded the definition of capital as in effect currently by establishing criteria that instruments must meet to be considered Additional Tier 1 Capital (Tier 1 Capital in addition to Common Equity) and Tier 2 Capital. A number of instruments that generally qualified as Tier 1 Capital under the old guidelines no longer qualify, or their qualifications will change, as the Basel III Rule is being fully implemented.

The Basel III Rule also permitted banking organizations with less than $15.0 billion in assets to retain, through a one-time election, the past treatment for accumulated other comprehensive income (loss), which did not affect regulatory capital. First Busey and Busey Bank made this election in the first quarter of 2015 to avoid variations in the level of their capital depending on fluctuations in the fair value of their securities portfolio. The Basel III Rule maintained the general structure of the prompt corrective action framework, while incorporating increased requirements. The prompt corrective action guidelines were also revised to add the Common Equity Tier 1 Capital ratio. Under the final capital rules that became effective on January 1, 2015, there was a requirement for a Common Equity Tier 1 capital conservation buffer of 2.5% of risk weighted assets which is in addition to the other minimum risk based capital standards in the rule. Failure to maintain the buffer will result in restrictions on the Company’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. The capital buffer requirement is being phased-in over three years beginning in 2016.

The September 30, 2018 table below includes the 1.875% increase as of January 1, 2018 in the minimum capital requirement ratios. The capital buffer requirement effectively raises the minimum required Common Equity Tier 1 Capital ratio to 7.0%, the Tier 1 Capital ratio to 8.5%, and the Total Capital ratio to 10.5% on a fully phased-in basis on January 1, 2019. As of September 30, 2018 and December 31, 2017, the Company was in compliance with the current phase of the Basel III Rule and management believes that the Company would meet all capital adequacy requirements under the Basel III Rule on a fully phased-in basis as if such requirements had been in effect (dollars in thousands).


					Minimum				Minimum
					Capital Requirement with				To Be Well
	Actual				Capital Buffer				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2018:
Total Capital (to Risk Weighted Assets)
Consolidated	$	877,322	14.34	%	$	603,990	9.875	%	$	611,636	10.00	%
Busey Bank	$	865,523	14.22	%	$	600,987	9.875	%	$	608,594	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	764,579	12.50	%	$	481,663	7.875	%	$	489,309	8.00	%
Busey Bank	$	812,780	13.36	%	$	479,268	7.875	%	$	486,875	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	690,579	11.29	%	$	389,918	6.375	%	$	397,564	6.50	%
Busey Bank	$	812,780	13.36	%	$	387,979	6.375	%	$	395,586	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	764,579	10.17	%	$	300,787	4.00	%		N/A	N/A
Busey Bank	$	812,780	10.84	%	$	299,786	4.00	%	$	374,733	5.00	%

					Minimum				Minimum
					Capital Requirement with				To Be Well
	Actual				Capital Buffer				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2017:
Total Capital (to Risk Weighted Assets)
Consolidated	$	837,183	14.15	%	$	547,265	9.250	%	$	591,638	10.00	%
Busey Bank	$	704,807	12.78	%	$	509,978	9.250	%	$	551,327	10.00	%
South Side Bank	$	84,914	22.61	%	$	34,744	9.250	%	$	37,561	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	718,101	12.14	%	$	428,937	7.250	%	$	473,310	8.00	%
Busey Bank	$	651,432	11.82	%	$	399,713	7.250	%	$	441,062	8.00	%
South Side Bank	$	84,707	22.55	%	$	27,232	7.250	%	$	30,049	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	644,633	10.90	%	$	340,192	5.750	%	$	384,565	6.50	%
Busey Bank	$	651,432	11.82	%	$	317,013	5.750	%	$	358,363	6.50	%
South Side Bank	$	84,707	22.55	%	$	21,598	5.750	%	$	24,415	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	718,101	9.78	%	$	293,588	4.00	%		N/A	N/A
Busey Bank	$	651,432	9.80	%	$	265,847	4.00	%	$	332,309	5.00	%
South Side Bank	$	84,707	12.75	%	$	26,571	4.00	%	$	33,214	5.00	%

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1G
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958577-112826

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958572-112826

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958574-112826

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=84167132&loc=d3e65071-112826

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958569-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958570-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958575-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958568-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958573-112826

+ Details

Operating Segments and Related Information

9 Months Ended

Sep. 30, 2018

Operating Segments and Related Information

Operating Segments and Related Information

Note 15: Operating Segments and Related Information

The Company has three reportable operating segments, Banking, Remittance Processing and Wealth Management. The Banking operating segment provides a full range of banking services to individual and corporate customers through its banking center network in Illinois, St. Louis, Missouri metropolitan area, southwest Florida and through its banking center in Indianapolis, Indiana. The Remittance Processing operating segment provides for online bill payments, lockbox and walk-in payments. The Wealth Management operating segment provides a full range of asset management, investment and fiduciary services to individuals, businesses and foundations, tax preparation, philanthropic advisory services and farm and brokerage services.

The Company’s three operating segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. The “other” category consists of the parent company and the elimination of intercompany transactions.

The segment financial information provided below has been derived from information used by management to monitor and manage the financial performance of the Company. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands):


	Goodwill				Total Assets
	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017

Banking	$	246,999	$	248,660	$	7,831,967	$	7,809,738
Remittance Processing		8,992		8,992		37,809		34,646
Wealth Management		11,694		11,694		33,543		32,077
Other		—		—		(13,934)		(15,821)
Totals	$	267,685	$	269,346	$	7,889,385	$	7,860,640


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net interest income:
Banking	$	62,578	$	57,589	$	186,103	$	143,496
Remittance Processing		17		15		49		44
Wealth Management		110		87		304		233
Other		(1,931)		(1,750)		(5,553)		(3,453)
Total net interest income	$	60,774	$	55,941	$	180,903	$	140,320

Non-interest income:
Banking	$	11,196	$	12,338	$	33,827	$	33,550
Remittance Processing		4,042		3,032		11,812		9,061
Wealth Management		7,391		5,941		23,840		19,649
Other		(776)		(474)		(2,338)		(1,347)
Total non-interest income	$	21,853	$	20,837	$	67,141	$	60,913

Non-interest expense:
Banking	$	37,034	$	38,697	$	116,275	$	97,318
Remittance Processing		2,718		2,190		7,808		6,476
Wealth Management		4,307		3,896		13,921		11,840
Other		1,870		2,156		6,270		5,692
Total non-interest expense	$	45,929	$	46,939	$	144,274	$	121,326

Income before income taxes:
Banking	$	35,982	$	29,736	$	99,631	$	77,234
Remittance Processing		1,341		856		4,053		2,629
Wealth Management		3,194		2,132		10,223		8,042
Other		(4,577)		(4,379)		(14,161)		(10,492)
Total income before income taxes	$	35,940	$	28,345	$	99,746	$	77,413

Net income:
Banking	$	26,486	$	18,942	$	73,235	$	49,546
Remittance Processing		957		505		2,896		1,567
Wealth Management		2,280		1,237		7,332		4,760
Other		(2,864)		(1,900)		(9,825)		(5,440)
Total net income	$	26,859	$	18,784	$	73,638	$	50,433

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2018

Derivative Financial Instruments

Derivative Financial Instruments

Note 16: Derivative Financial Instruments

The Company originates and purchases derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to loan investors, and interest rate swaps. See “Note 17: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives.

Interest Rate Lock Commitments. At September 30, 2018 and December 31, 2017, the Company had issued $50.4 million and $51.7 million, respectively, of unexpired interest rate lock commitments to loan customers. Such interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited Consolidated Financial Statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred.

Forward Sales Commitments. At September 30, 2018 and December 31, 2017, the Company had issued $82.3 million and $139.7 million, respectively, of unexpired forward sales commitments to mortgage loan investors. Typically, the Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited Consolidated Financial Statements. While such forward sales commitments generally served as an economic hedge to the mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.

The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


	September 30, 2018		December 31, 2017
Fair value recorded in other assets	$	322	$	675
Fair value recorded in other liabilities		561		2,148

The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and expense in the unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017 are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross gains	$	641	$	3,822	$	2,396	$	12,629
Gross (losses)		(561)		(3,083)		(2,669)		(11,102)
Net gains (losses)	$	80	$	739	$	(273)	$	1,527

The impact of the net gains or losses on derivative financial instruments related to interest rate lock commitments issued to residential loan customers for loans that will be held for sale and forward sales commitments to sell residential mortgage loans to loan investors are almost entirely offset by a corresponding change in the fair value of loans held for sale.

Interest Rate Swaps. The Company entered into interest rate swap contracts to manage the interest rate risk exposure associated with specific commercial loan relationships, at the time such loans were originated. The Company offsets each customer derivative with a bank counterparty. With notional values of $188.8 million and $161.3 million at September 30, 2018 and December 31, 2017, respectively, these contracts support variable rate, commercial loan relationships totaling $94.4 million and $80.7 million, respectively. While these swap derivatives generally worked together as an economic interest rate hedge, the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.

The fair values of derivative assets and liabilities related to interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


		September 30, 2018		December 31, 2017
Fair value recorded in other assets	$	2,428	$	262
Fair value recorded in other liabilities		2,428		262

The gross gains and losses on derivative assets and liabilities related to interest rate swaps recorded in non-interest income and expense in the unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017 are summarized as follows (dollars in thousands):


	Three Months Ended September 30, 2018				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross gains	$	724	$	128	$	2,167	$	429
Gross losses		(724)		(128)		(2,167)		(429)
Net gains (losses)	$	—	$	—	$	—	$	—

First Busey had $0.3 million in securities pledged to secure its obligation under these contracts at September 30, 2018. First Busey had $2.0 million in cash and $0.4 million in securities pledged to secure its obligation under contracts at December 31, 2017.

Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Measurements

Fair Value Measurements

Note 17: Fair Value Measurements

The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to those Company assets and liabilities that are carried at fair value.

There were no transfers between levels during the quarter ended September 30, 2018.

In general, fair value is based upon quoted market prices, when available. If such quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale. Securities classified as available for sale are reported at fair value utilizing level 2 measurements. The Company obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information, focusing on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations.

The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. The models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models.

The market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The independent pricing service also monitors market indicators, industry and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as level 2 in ASC Topic 820.

Securities Equity Investments. Securities classified as equity investments are reported at fair value utilizing level 1 measurements. For mutual funds and other equity securities, unadjusted quoted prices in active markets for identical assets are utilized to determine fair value at the measurement date and have been classified as level 1 in ASC Topic 820.

Loans Held for Sale. Loans held for sale are reported at fair value utilizing level 2 measurements. The fair value of the mortgage loans held for sale are measured using observable quoted market or contract prices or market price equivalents and are classified as level 2 in ASC Topic 820.

Derivative Assets and Derivative Liabilities. Derivative assets and derivative liabilities are reported at fair value utilizing level 2 measurements. The fair value of derivative assets and liabilities is determined based on prices that are obtained from a third-party which uses observable market inputs. Derivative assets and liabilities are classified as level 2 in ASC Topic 820.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
September 30, 2018	Inputs		Inputs		Inputs		Fair Value
Fair value adjusted through comprehensive income:
Securities available for sale
U.S. Treasury securities	$	—	$	59,854	$	—	$	59,854
Obligations of U.S. government corporations and agencies		—		89,666		—		89,666
Obligations of states and political subdivisions		—		241,925		—		241,925
Residential mortgage-backed securities		—		331,582		—		331,582
Corporate debt securities		—		140,354		—		140,354
Fair value adjusted through current period earnings:
Securities equity investments		7,317		—		—		7,317
Loans held for sale		—		32,617		—		32,617
Derivative assets		—		2,750		—		2,750
Derivative liabilities		—		2,989		—		2,989


	Level 1		Level 2		Level 3		Total
December 31, 2017	Inputs		Inputs		Inputs		Fair Value
Securities available for sale
U.S. Treasury securities	$	—	$	60,348	$	—	$	60,348
Obligations of U.S. government corporations and agencies		—		103,665		—		103,665
Obligations of states and political subdivisions		—		280,199		—		280,199
Residential mortgage-backed securities		—		397,436		—		397,436
Corporate debt securities		—		31,034		—		31,034
Securities equity investments		5,378		—		—		5,378
Loans held for sale		—		94,848		—		94,848
Derivative assets		—		937		—		937
Derivative liabilities		—		2,410		—		2,410

Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Impaired Loans. The Company does not record loans at fair value on a recurring basis. However, periodically, a loan is considered impaired and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. Impaired loans measured at fair value typically consist of loans on non-accrual status and restructured loans in compliance with modified terms. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of the unobservable inputs, all impaired loan fair values have been classified as level 3 in ASC Topic 820.

OREO. Non-financial assets and non-financial liabilities measured at fair value include OREO (upon initial recognition or subsequent impairment). OREO properties are measured using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of the unobservable inputs, all OREO fair values have been classified as level 3 in ASC Topic 820.

Bank Property Held for Sale. Bank property held for sale represents certain banking center office buildings which the Company has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or fair value less estimated costs to sell. The fair values were based upon appraisals or real estate listing price. Due to the significance of the unobservable inputs, all bank property held for sale fair values have been classified as level 3 in ASC Topic 820.

The following table summarizes assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
September 30, 2018
Impaired loans	$	—	$	—	$	12,647	$	12,647
OREO		—		—		55		55
Bank property held for sale		—		—		3,711		3,711


December 31, 2017
Impaired loans	$	—	$	—	$	1,313	$	1,313
OREO(1)		—		—		—		—

(1)

OREO fair value was less than one thousand dollars.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands):


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
	Estimate		Techniques	Input	(Weighted Average)
September 30, 2018
Impaired loans	$	12,647	Appraisal of collateral	Appraisal adjustments	- 2.3	%	to	- 100.0	%
					(-20.3)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		3,711	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 0.0	%	to	- 35.1	%
					(-18.0)%

December 31, 2017
Impaired loans	$	1,313	Appraisal of collateral	Appraisal adjustments	- 20.3	%	to	- 100.0	%
					(-30.8)%
OREO(1)		—	Appraisal of collateral	Appraisal adjustments	-100.0%
					(-100.0)%

(1)

OREO fair value was less than one thousand dollars.

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands):


	September 30, 2018				December 31, 2017
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	160,652	$	160,652	$	353,272	$	353,272
Level 2 inputs:
Securities held to maturity		626,250		611,302		443,550		441,052
Accrued interest receivable		25,321		25,321		22,591		22,591
Level 3 inputs:
Portfolio loans, net		5,570,998		5,424,280		5,465,918		5,361,406
Mortgage servicing rights		3,456		11,147		3,680		8,635
Other servicing rights		616		1,236		280		901

Financial liabilities:
Level 2 inputs:
Time deposits(2)	$	1,552,283	$	1,536,729	$	—	$	—
Deposits(2)		—		—		6,125,965		6,119,135
Securities sold under agreements to repurchase		255,906		255,906		304,566		304,566
Short-term borrowings		200,000		200,000		220,000		220,000
Long-term debt		50,000		49,562		50,000		50,000
Junior subordinated debt owed to unconsolidated trusts		71,118		71,118		71,008		71,008
Accrued interest payable		6,731		6,731		2,581		2,581
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,505		38,382		39,404		39,104
Subordinated notes, net of unamortized issuance costs		59,121		57,470		64,715		64,350

(2)

In connection with the adoption of ASU 2016-01 in 2018, only deposits with stated maturities are required to be disclosed.

ASC Topic 825 requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. A detailed description of the valuation methodologies used in estimating the fair value of financial instruments is set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Liability for Loans Sold	9 Months Ended
Liability for Loans Sold	Sep. 30, 2018
Liability for Loans Sold
Liability for Loans Sold	Note 18: Liability for Loans Sold Under standard representations and warranties and early payment default clauses in the Company’s mortgage sale agreements, the Company could be required to repurchase mortgage loans sold to investors or reimburse the investors for losses incurred on loans in the event of borrower default within a defined period after origination (generally 90 days), or in the event of breaches of contractual representations or warranties made at the time of sale that are not remedied within a defined period after the Company receives notice of such breaches (generally 90 days). In addition, the Company may be required to refund the profit received from the sale of a loan to an investor if the borrower pays off the loan within a defined period after origination, which is generally 120 days. The Company records an estimated liability for probable amounts due to the Company’s loan investors under these obligations. This repurchase liability is determined based on a combination of factors including the volume of loans sold in current and previous periods; borrower default expectations; historical investor repurchase demand and appeals success rates; and estimated loss severity. Payments made to investors as reimbursement for losses incurred are charged against the mortgage repurchase liability. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. The difference between the loan’s fair value and the payment made to investors as reimbursement for losses incurred is charged to the mortgage repurchase liability. Subsequent to repurchase, such loans are carried as portfolio loans on the Company’s Consolidated Balance Sheets. Loans repurchased with deteriorated credit quality at the date of repurchase are accounted for under ASC Topic 310-30. The liability for loans sold of $2.0 million and $2.1 million at September 30, 2018 and December 31, 2017, respectively, represents the Company’s best estimate of the probable losses that the Company will incur for various early default provisions and contractual representations and warranties associated with the sales of mortgage loans and is included in other liabilities in the accompanying Consolidated Balance Sheets. Because the level of mortgage loan repurchase losses depends upon economic factors, investor demand strategies and other external conditions that may change over the life of the underlying loans, the level of the liability for mortgage loan repurchase losses is difficult to estimate and requires considerable management judgment. In addition, the Company generally does not service the loans that it has sold to investors and is generally unable to track the remaining unpaid balances or delinquency status after sale. As a result, there may be a range of possible losses in excess of the estimated liability that cannot be estimated. Management maintains regular contact with the Company’s investors to monitor and address their repurchase demand practices and concerns.

Accounting Policies (Policies)	9 Months Ended
Accounting Policies (Policies)	Sep. 30, 2018
Accounting Policies
Basis of Financial Statement Presentation	Basis of Financial Statement Presentation When preparing these unaudited Consolidated Financial Statements of First Busey Corporation and its subsidiaries (“First Busey,” “Company,” “we,” or “our”), a Nevada corporation, we have assumed that you have read the audited Consolidated Financial Statements included in our 2017 Form 10-K. These interim unaudited Consolidated Financial Statements serve to update our 2017 Form 10-K and may not include all information and notes necessary to constitute a complete set of Financial Statements. We prepared these unaudited Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform to the current period presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. In our opinion, the unaudited Consolidated Financial Statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. We have also considered the impact of subsequent events on these unaudited Consolidated Financial Statements. On October 12, 2018 a return of capital and associated surplus to the Company from Busey Bank was executed as discussed in “Note 14: Capital” with no impact to capital for the unaudited Consolidated Financial Statements. In addition, on November 1, 2018, Busey Trust Company was merged with and into Busey Bank, with no impact to the unaudited Consolidated Financial Statements. Other than these events, there were no significant subsequent events for the quarter ended September 30, 2018 through the issuance date of these unaudited Consolidated Financial Statements that warranted adjustment to or disclosure in the unaudited Consolidated Financial Statements.
Use of Estimates	Use of Estimates In preparing the accompanying unaudited Consolidated Financial Statements, the Company’s management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Financial Statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the fair value of available for sale investment securities, the fair value of assets acquired and liabilities assumed in business combinations and the determination of the allowance for loan losses.
Recently Issued Accounting Standards	Recently Issued Accounting Standards Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 outlines a single model for companies to use in accounting for revenue arising from contracts with customers and supersedes most prior revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and establishes additional disclosures. The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. The Company has evaluated its non-interest income and the nature of its contracts with customers and determined that further disaggregation of revenue beyond what is presented in the accompanying unaudited Consolidated Financial Statements was not necessary. The Company satisfies its performance obligations on its contracts with customers as services are rendered so there is limited judgment involved in applying Topic 606 that affects the determination of the timing and amount of revenue from contracts with customers. Descriptions of the Company’s primary revenue generating activities that are within Topic 606, and are presented in the accompanying unaudited Consolidated Statements of Income as components of non-interest income, include trust fees, commission and brokers’ fees, net, remittance processing, and fees for customer services. Trust fees and commission and brokers’ fees, net, represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and other fiduciary activities. Also included are fees received from a third party broker-dealer as part of a revenue sharing agreement for fees earned from customers that the Company refers to the third party. Revenue is recognized when the performance obligation is completed, which is generally monthly. Remittance processing represents transaction-based fees for pay processing solutions such as online bill payments, lockbox and walk-in payments. Revenue is recognized when the performance obligation is completed, which is generally monthly. Fees for customer services represents general service fees for monthly account maintenance and activity or transaction-based fees and consists of transaction-based revenue, time-based revenue, or item-based revenue. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for such performance obligations are generally received at the time the performance obligations are satisfied. The adoption of this guidance on January 1, 2018 did not change the method in which non-interest income is recognized therefore a cumulative effect adjustment to retained earnings was not necessary. ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 requires: equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial assets; eliminating the requirement to disclose the method and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the Balance Sheet; and requires an entity to present separately in other comprehensive income (loss) the portion of the total change in fair value of a liability resulting from the change in the instrument-specific credit risk when the fair value option has been elected for the liability. ASU 2016-01 was effective on January 1, 2018 and the adoption of this guidance resulted in separate classification of equity securities previously included in available for sale securities on the Consolidated Financial Statements. There was no cumulative effect adjustment recorded with the adoption of this guidance. ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows companies to make a one-time reclassification from accumulated other comprehensive income (loss) to retained earnings for the effects of remeasuring deferred tax liabilities and assets originally recorded in other comprehensive income as a result of the change in the federal tax rate by the TCJA. The Company adopted this guidance in the first quarter of 2018 with no impact on total stockholders' equity or net income. ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 intends to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the Consolidated Balance Sheet as a lease liability and a right-of-use asset. The guidance also requires qualitative and quantitative disclosures of the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, ASU 2018-11, "Leases (Topic 842): Targeted Improvements" was issued to allow companies to choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to the opening balance of retained earnings rather than recasting prior year results upon adoption of the standard. The Company is in the process of calculating the transition impact of the guidance on its Consolidated Financial Statements and related disclosures. Where the Company is a lessee, the Company expects an increase in assets and liabilities to record the right of use asset and the lease liability. ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 implements a change from the current impaired loss model to an expected credit loss model over the life of an instrument, including loans and securities held to maturity. The expected credit loss model is expected to result in earlier recognition of losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 including interim periods with those years. The Company has developed and is executing a project plan to implement this guidance. As part of that project plan, the Company will evaluate the impact this guidance will have on its Consolidated Financial Statements and related disclosures. ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 is intended to simplify goodwill impairment testing by eliminating the second step of the analysis which required an entity to determine the fair value of its assets and liabilities as of the impairment test date. Instead, ASU 2017-04 requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. This guidance is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 amends Topic 815 to reduce the cost and complexity of applying hedge accounting and expands the types of relationships that qualify for hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, requires all items that affect earnings to be presented in the same income statement line as the hedged item, provides for applying hedge accounting to additional hedging strategies, provides for new approaches to measuring the hedged item in fair value hedges of interest rate risk, and eases the requirements for effective testing and hedge documentation. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect this guidance to have a material impact on its Consolidated Financial Statements. ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 removes, modifies, and adds certain disclosure requirements on fair value measurements. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The guidance has no impact on the Company’s Consolidated Financial Statements and is not expected to have a material impact on the Company’s required disclosures.

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

First Community

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the fair value of First Community assets acquired and liabilities assumed as of July 2, 2017 (dollars in thousands):



	As Recorded by
	First Busey
Assets acquired:
Cash and cash equivalents	$	60,686
Securities		165,843
Loans held for sale		905
Portfolio loans		1,096,583
Premises and equipment		18,094
OREO		722
Other intangible assets		13,979
Other assets		41,755
Total assets acquired		1,398,567

Liabilities assumed:
Deposits		1,134,355
Other borrowings		125,751
Other liabilities		11,862
Total liabilities assumed		1,271,968

Net assets acquired	$	126,599

Consideration paid:
Cash	$	24,557
Cash payout of options and restricted stock units		6,182
Common stock		211,120
Fair value of stock options assumed		722
Total consideration paid		242,581

Goodwill	$	115,982

Schedule of unaudited pro forma results of operations for the acquisition

Only the merger related expenses that have been recognized are included in net income in the table below (dollars in thousands, except per share amount):


		Pro Forma
	Nine Months Ended
	September 30, 2017
Total revenues (net interest income plus non-interest income)	$	231,301
Net income		56,348
Diluted earnings per common share		1.23

Mid Illinois Bancorp, Inc.

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the fair value of Mid Illinois assets acquired and liabilities assumed as of October 1, 2017 (dollars in thousands):



	As Recorded by
	First Busey
Assets acquired:
Cash and cash equivalents	$	39,443
Securities		208,003
Loans held for sale		5,031
Portfolio loans		356,651
Premises and equipment		16,551
Other intangible assets		11,531
Other assets		29,564
Total assets acquired		666,774

Liabilities assumed:
Deposits		505,917
Other borrowings		61,040
Other liabilities		10,497
Total liabilities assumed		577,454

Net assets acquired	$	89,320

Consideration paid:
Cash	$	40,507
Common stock		97,702
Total consideration paid		138,209

Goodwill	$	48,889

Securities (Tables)

9 Months Ended

Sep. 30, 2018

Securities

Schedule of amortized cost, unrealized gains and losses and fair values of securities classified available for sale and held to maturity

The table below provides the amortized cost, unrealized gains and losses and fair values of securities summarized by major category (dollars in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2018:	Cost		Gains		Losses		Value
Available for sale
U.S. Treasury securities	$	61,066	$	—	$	(1,212)	$	59,854
Obligations of U.S. government corporations and agencies		91,767		5		(2,106)		89,666
Obligations of states and political subdivisions		245,459		315		(3,849)		241,925
Residential mortgage-backed securities		342,421		207		(11,046)		331,582
Corporate debt securities		140,884		19		(549)		140,354
Total	$	881,597	$	546	$	(18,762)	$	863,381

Held to maturity
Obligations of states and political subdivisions	$	36,689	$	13	$	(301)	$	36,401
Commercial mortgage-backed securities		60,172		—		(1,705)		58,467
Residential mortgage-backed securities		529,389		—		(12,955)		516,434
Total	$	626,250	$	13	$	(14,961)	$	611,302


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017:	Cost		Gains		Losses		Value
Available for sale
U.S. Treasury securities	$	60,829	$	7	$	(488)	$	60,348
Obligations of U.S. government corporations and agencies		104,807		1		(1,143)		103,665
Obligations of states and political subdivisions		280,216		1,160		(1,177)		280,199
Residential mortgage-backed securities		400,661		612		(3,837)		397,436
Corporate debt securities		30,946		132		(44)		31,034
Total	$	877,459	$	1,912	$	(6,689)	$	872,682

Held to maturity
Obligations of states and political subdivisions	$	41,300	$	228	$	(64)	$	41,464
Commercial mortgage-backed securities		60,474		41		(297)		60,218
Residential mortgage-backed securities		341,776		25		(2,431)		339,370
Total	$	443,550	$	294	$	(2,792)	$	441,052

Schedule of amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity


	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	86,344	$	86,041	$	9,858	$	9,837
Due after one year through five years		335,204		330,511		56,077		54,998
Due after five years through ten years		152,272		149,199		29,754		28,867
Due after ten years		307,777		297,630		530,561		517,600
Total	$	881,597	$	863,381	$	626,250	$	611,302

Schedule of realized gains and losses related to sales of securities

Realized gains and losses related to sales of available for sale securities are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross security gains	$	—	$	290	$	—	$	1,259
Gross security (losses)		—		—		—		(116)
Security gains, net(1)	$	—	$	290	$	—	$	1,143

(1)

Security gains, net reported on the Consolidated Statements of Income in 2018 relate to the sale of equity securities as noted above.

Schedule of securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position


	Continuous unrealized				Continuous unrealized
	losses existing for less than				losses existing for greater
	12 months, gross				than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2018:	Value		Losses		Value		Losses		Value		Losses
Available for sale
U.S. Treasury securities	$	35,883	$	(471)	$	23,971	$	(741)	$	59,854	$	(1,212)
Obligations of U.S. government corporations and agencies		29,899		(707)		58,946		(1,399)		88,845		(2,106)
Obligations of states and political subdivisions		186,959		(3,067)		36,612		(782)		223,571		(3,849)
Residential mortgage-backed securities		204,979		(5,089)		114,013		(5,957)		318,992		(11,046)
Corporate debt securities		138,019		(546)		47		(3)		138,066		(549)
Total temporarily impaired securities	$	595,739	$	(9,880)	$	233,589	$	(8,882)	$	829,328	$	(18,762)

Held to maturity
Obligations of states and political subdivisions	$	31,932	$	(284)	$	911	$	(17)	$	32,843	$	(301)
Commercial mortgage-backed securities		49,853		(1,385)		8,614		(320)		58,467		(1,705)
Residential mortgage-backed securities		449,798		(9,550)		66,636		(3,405)		516,434		(12,955)
Total temporarily impaired securities	$	531,583	$	(11,219)	$	76,161	$	(3,742)	$	607,744	$	(14,961)


	Continuous unrealized				Continuous unrealized
	losses existing for less than				losses existing for greater
	12 months, gross				than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2017:	Value		Losses		Value		Losses		Value		Losses
Available for sale
U.S. Treasury securities	$	59,773	$	(488)	$	—	$	—	$	59,773	$	(488)
Obligations of U.S. government corporations and agencies		78,610		(636)		24,831		(507)		103,441		(1,143)
Obligations of states and political subdivisions		162,213		(1,027)		12,045		(150)		174,258		(1,177)
Residential mortgage-backed securities		223,261		(1,428)		90,930		(2,409)		314,191		(3,837)
Corporate debt securities		16,176		(44)		—		—		16,176		(44)
Total temporarily impaired securities	$	540,033	$	(3,623)	$	127,806	$	(3,066)	$	667,839	$	(6,689)

Held to maturity
Obligations of states and political subdivisions	$	17,939	$	(64)	$	—	$	—	$	17,939	$	(64)
Commercial mortgage-backed securities		44,514		(214)		2,374		(83)		46,888		(297)
Residential mortgage-backed securities		277,826		(2,431)		—		—		277,826		(2,431)
Total temporarily impaired securities	$	340,279	$	(2,709)	$	2,374	$	(83)	$	342,653	$	(2,792)

General obligation bonds

Securities

Summary of amortized cost and fair values of the Company's portfolio of municipal bonds by issuers' state

The amortized cost and fair values of the Company’s portfolio of general obligation bonds are summarized in the following tables by the issuers’ state (dollars in thousands):


September 30, 2018:						Average Exposure
	Number of		Amortized	Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Illinois	89	$	87,902	$	86,739	$	975
Wisconsin	27		18,971		18,690		692
Texas	43		24,893		24,431		568
Michigan	25		13,589		13,620		545
Ohio	20		14,665		14,505		725
Pennsylvania	15		9,250		9,197		613
New Jersey	12		5,576		5,525		460
Missouri	9		5,556		5,472		608
California	7		8,829		8,765		1,252
Other	85		50,153		49,223		579
Total general obligations bonds	332	$	239,384	$	236,167	$	711


December 31, 2017:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Illinois	97	$	95,340	$	95,344	$	983
Wisconsin	41		27,852		27,809		678
Texas	46		27,485		27,514		598
Michigan	34		19,641		19,849		584
Ohio	20		15,172		15,162		758
Pennsylvania	18		12,189		12,174		676
New Jersey	15		7,755		7,760		517
Missouri	10		5,759		5,747		575
Minnesota	8		5,657		5,667		708
Other	92		54,649		54,633		594
Total general obligations bonds	381	$	271,499	$	271,659	$	713

Revenue bonds

Securities

Summary of amortized cost and fair values of the Company's portfolio of municipal bonds by issuers' state

The amortized cost and fair values of the Company’s portfolio of revenue bonds are summarized in the following tables by the issuers’ state (dollars in thousands):


September 30, 2018:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Indiana	13	$	10,902	$	10,801	$	831
Missouri	5		7,041		6,966		1,393
Illinois	5		5,218		5,128		1,026
Other	31		19,603		19,264		621
Total revenue bonds	54	$	42,764	$	42,159	$	781


December 31, 2017:						Average Exposure
	Number of	Amortized		Fair		Per Issuer
U.S. State	Issuers	Cost		Value		(Fair Value)
Indiana	14	$	12,001	$	12,054	$	861
Missouri	6		7,376		7,336		1,223
Illinois	7		6,477		6,456		922
Other	38		24,163		24,158		636
Total revenue bonds	65	$	50,017	$	50,004	$	769

Loans held for sale (Tables)

9 Months Ended

Sep. 30, 2018

Loans held for sale

Summary of mortgage revenue

The following is a summary of mortgage revenue (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Premiums received on sales of mortgage loans, including fair value adjustments	$	2,794	$	11,366	$	9,779	$	33,582
Less direct origination costs		(1,976)		(8,398)		(6,805)		(26,433)
Less provisions to liability for loans sold		(47)		(25)		(156)		(200)
Mortgage servicing revenues, net of servicing expense		501		583		1,670		1,481
Mortgage revenue	$	1,272	$	3,526	$	4,488	$	8,430

Portfolio loans (Tables)

9 Months Ended

Sep. 30, 2018

Portfolio loans

Schedule of distribution of portfolio loans

The distribution of portfolio loans at September 30, 2018 and December 31, 2017 is as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
Commercial	$	1,461,186	$	1,414,631
Commercial real estate		2,371,868		2,354,684
Real estate construction		308,762		261,506
Retail real estate		1,453,266		1,460,801
Retail other		28,659		27,878
Portfolio loans	$	5,623,741	$	5,519,500

Less allowance for loan losses		52,743		53,582
Portfolio loans, net	$	5,570,998	$	5,465,918

Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings)

The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands):


	September 30, 2018
					Special
	Pass		Watch		Mention		Substandard		Doubtful
Commercial	$	1,205,074	$	136,262	$	51,840	$	48,266	$	20,994
Commercial real estate		2,098,441		146,634		76,941		46,267		13,417
Real estate construction		289,134		14,977		3,110		1,923		21
Retail real estate		1,427,792		4,162		4,613		5,690		5,931
Retail other		28,919		—		—		—		32
Total	$	5,049,360	$	302,035	$	136,504	$	102,146	$	40,395


	December 31, 2017
					Special
	Pass		Watch		Mention		Substandard		Doubtful
Commercial	$	1,175,421	$	141,776	$	51,366	$	43,933	$	5,285
Commercial real estate		2,169,420		130,056		21,151		36,482		11,997
Real estate construction		212,952		41,292		3,880		3,071		608
Retail real estate		1,436,156		6,883		5,162		4,135		6,714
Retail other		28,300		9		—		7		20
Total	$	5,022,249	$	320,016	$	81,559	$	87,628	$	24,624

Summary of portfolio loans that are past due and still accruing or on a non-accrual status

A summary of portfolio loans that are past due and still accruing or on a non-accrual status is as follows (dollars in thousands):


	September 30, 2018
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	284	$	13	$	100	$	20,994
Commercial real estate		1,123		86		—		13,417
Real estate construction		280		651		—		21
Retail real estate		4,111		1,478		264		5,931
Retail other		157		6		—		32
Total	$	5,955	$	2,234	$	364	$	40,395


	December 31, 2017
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	1,615	$	323	$	1,808	$	5,285
Commercial real estate		1,856		2,737		—		11,997
Real estate construction		—		—		—		608
Retail real estate		4,840		1,355		933		6,714
Retail other		166		5		—		20
Total	$	8,477	$	4,420	$	2,741	$	24,624

Summary of restructured loans

A summary of restructured loans is as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
In compliance with modified terms	$	8,695	$	9,873
30 — 89 days past due		—		108
Included in non-performing loans		1,541		1,919
Total	$	10,236	$	11,900

Schedule of details of impaired loans, segregated by category

The average recorded investment is calculated using the most recent four quarters (dollars in thousands).


	September 30, 2018
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	24,479	$	9,518	$	11,713	$	21,231	$	3,691	$	11,395
Commercial real estate		19,994		12,851		6,197		19,048		1,572		18,528
Real estate construction		429		405		—		405		—		826
Retail real estate		13,395		12,103		100		12,203		100		14,361
Retail other		117		32		—		32		—		43
Total	$	58,414	$	34,909	$	18,010	$	52,919	$	5,363	$	45,153


	December 31, 2017
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	10,604	$	7,192	$	191	$	7,383	$	138	$	10,184
Commercial real estate		22,218		16,472		1,964		18,436		704		15,195
Real estate construction		1,040		1,016		—		1,016		—		692
Retail real estate		18,517		14,957		25		14,982		25		13,009
Retail other		40		20		—		20		—		44
Total	$	52,419	$	39,657	$	2,180	$	41,837	$	867	$	39,124

Schedule of activity on the allowance for loan losses


	As of and for the Three Months Ended September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,586	$	23,047	$	2,915	$	9,293	$	464	$	53,305
Provision for loan losses		2,388		(1,291)		(15)		(399)		75		758
Charged-off		(1,144)		(62)		—		(695)		(286)		(2,187)
Recoveries		136		58		32		423		218		867
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743


	As of and for the Nine Months Ended September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582
Provision for loan losses		7,111		1,154		22		(4,609)		346		4,024
Charged-off		(3,841)		(1,487)		(97)		(1,637)		(608)		(7,670)
Recoveries		917		272		146		1,085		387		2,807
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743


	As of and for the Three Months Ended September 30, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	12,928	$	20,124	$	2,161	$	13,681	$	307	$	49,201
Provision for loan losses		336		418		64		654		22		1,494
Charged-off		(60)		(69)		—		(482)		(74)		(685)
Recoveries		318		403		36		223		45		1,025
Ending balance	$	13,522	$	20,876	$	2,261	$	14,076	$	300	$	51,035


	As of and for the Nine Months Ended September 30, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	13,303	$	20,623	$	1,870	$	11,648	$	351	$	47,795
Provision for loan losses		(1,885)		1,477		1		2,894		7		2,494
Charged-off		(241)		(1,758)		(48)		(1,574)		(257)		(3,878)
Recoveries		2,345		534		438		1,108		199		4,624
Ending balance	$	13,522	$	20,876	$	2,261	$	14,076	$	300	$	51,035

Schedule of allowance for loan losses and recorded investments in portfolio loans, by category

The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands):


	As of September 30, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Amount allocated to:
Loans individually evaluated for impairment	$	3,691	$	1,572	$	—	$	100	$	—	$	5,363
Loans collectively evaluated for impairment		15,275		20,180		2,932		8,522		471		47,380
Ending balance	$	18,966	$	21,752	$	2,932	$	8,622	$	471	$	52,743

Loans:
Loans individually evaluated for impairment	$	20,807	$	16,752	$	405	$	12,047	$	32	$	50,043
Loans collectively evaluated for impairment		1,439,955		2,352,820		308,357		1,441,063		28,627		5,570,822
PCI loans evaluated for impairment		424		2,296		—		156		—		2,876
Ending balance	$	1,461,186	$	2,371,868	$	308,762	$	1,453,266	$	28,659	$	5,623,741


	As of December 31, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Amount allocated to:
Loans individually evaluated for impairment	$	138	$	704	$	—	$	25	$	—	$	867
Loans collectively evaluated for impairment		14,641		21,109		2,861		13,758		346		52,715
Ending balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582

Loans:
Loans individually evaluated for impairment	$	6,572	$	11,491	$	435	$	12,673	$	20	$	31,191
Loans collectively evaluated for impairment		1,407,248		2,336,248		260,490		1,445,819		27,858		5,477,663
PCI loans evaluated for impairment		811		6,945		581		2,309		—		10,646
Ending balance	$	1,414,631	$	2,354,684	$	261,506	$	1,460,801	$	27,878	$	5,519,500

OREO (Tables)

9 Months Ended

Sep. 30, 2018

OREO.

Summary of activity related to OREO

The following table summarizes activity related to OREO (dollars in thousands):


	Nine Months Ended		Year Ended
	September 30, 2018		December 31, 2017
OREO:
Beginning balance	$	1,283	$	2,518
Additions, transfers from loans		3,706		1,417
Additions, fair value from First Community acquisition		—		722
Additions, fair value from Mid Illinois acquisition		—		60
Proceeds from sales of OREO		(4,275)		(5,024)
Gain on sales of OREO		397		1,632
Valuation allowance for OREO		(18)		(42)
Ending balance	$	1,093	$	1,283

Deposits (Tables)

9 Months Ended

Sep. 30, 2018

Deposits

Schedule of composition of deposits

The composition of deposits is as follows (dollars in thousands):


	September 30, 2018		December 31, 2017
Demand deposits, noninterest-bearing	$	1,438,054	$	1,597,421
Interest-bearing transaction deposits		1,325,702		1,166,170
Saving deposits and money market deposits		1,879,530		2,026,212
Time deposits		1,552,283		1,336,162
Total	$	6,195,569	$	6,125,965

Schedule of maturities of time deposits

As of September 30, 2018, the scheduled maturities of time deposits are as follows (dollars in thousands):


October 1, 2018 – September 30, 2019	$	1,087,015
October 1, 2019 – September 30, 2020		293,053
October 1, 2020 – September 30, 2021		58,166
October 1, 2021 – September 30, 2022		73,509
October 1, 2022 – September 30, 2023		40,524
Thereafter		16
	$	1,552,283

Borrowings (Tables)

9 Months Ended

Sep. 30, 2018

Borrowings

Schedule of distribution of securities sold under agreements to repurchase and short-term borrowings and weighted average interest rates

The following table sets forth the distribution of securities sold under agreements to repurchase and short-term borrowings and weighted average interest rates (dollars in thousands):


	September 30,			December 31,
	2018			2017
Securities sold under agreements to repurchase
Balance at end of period	$	255,906		$	304,566
Weighted average interest rate at end of period		0.85	%		0.57	%
Maximum outstanding at any month end in year-to-date period	$	267,596		$	304,566
Average daily balance for the year-to-date period	$	242,268		$	213,527
Weighted average interest rate during period(1)		0.62	%		0.46	%

Short-term borrowings, FHLB advances
Balance at end of period	$	200,000		$	220,000
Weighted average interest rate at end of period		2.24	%		1.42	%
Maximum outstanding at any month end in year-to-date period	$	225,000		$	234,600
Average daily balance for the year-to-date period	$	93,022		$	84,201
Weighted average interest rate during period(1)		1.73	%		1.20	%

(1)

The weighted average interest rate is computed by dividing total annualized interest for the year-to-date period by the average daily balance outstanding.

Summary of long-term debt

Long-term debt is summarized as follows (dollars in thousands):


	September 30,		December 31,
	2018		2017
Notes payable, FHLB, ranging in original maturity from nineteen months to ten years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock.	$	50,000	$	50,000

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Common Share

Schedule of computation of earnings per common share

Earnings per common share have been computed as follows (in thousands, except per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income available to common stockholders	$	26,859	$	18,784	$	73,638	$	50,433
Shares:
Weighted average common shares outstanding		48,892		45,324		48,828		40,669
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method		355		440		388		400

Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		49,247		45,764		49,216		41,069

Basic earnings per common share	$	0.55	$	0.41	$	1.51	$	1.24

Diluted earnings per common share	$	0.55	$	0.41	$	1.50	$	1.23

Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Share-based Compensation

Schedule of status of and changes in the Company's stock option awards

A summary of the status of and changes in the Company's stock option awards for the nine months ended September 30, 2018 follows:


		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining Contractual
	Shares	Price		Term
Outstanding at beginning of year	213,428	$	16.97
Exercised	(85,518)		13.90
Forfeited	(14,035)		21.81
Expired	(2,762)		16.15
Outstanding at end of period	111,113	$	18.75	4.66
Exercisable at end of period	73,469	$	16.30	2.87

Summary of the changes in the Company’s stock unit awards

A summary of the changes in the Company’s stock unit awards for the nine months ended September 30, 2018, is as follows:


		Weighted-		Director	Weighted-
	Restricted	Average		Deferred	Average
	Stock	Grant Date		Stock	Grant Date
	Units	Fair Value		Units	Fair Value
Non-vested at beginning of year	587,763	$	22.68	42,411	$	25.47
Reclass DSU to RSU	23,977		25.47	(23,977)		25.47
Granted	172,571		31.70	20,500		31.70
Dividend equivalents earned	11,870		31.05	1,669		30.98
Vested	(104,512)		16.40	(20,103)		29.74
Forfeited	(6,183)		24.84	—		—
Non-vested at end of period	685,486	$	26.13	20,500	$	27.97
Outstanding at end of period	685,486	$	26.13	86,270	$	22.41

Outstanding Commitments and Contingent Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Outstanding Commitments and Contingent Liabilities

Schedule of contractual amount of exposure to off-balance-sheet risk

A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands):


	September 30, 2018		December 31, 2017
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	1,296,406	$	1,300,294
Standby letters of credit		33,244		37,231

Capital (Tables)

9 Months Ended

Sep. 30, 2018

Capital

Schedule of capital adequacy requirements

As of September 30, 2018 and December 31, 2017, the Company was in compliance with the current phase of the Basel III Rule and management believes that the Company would meet all capital adequacy requirements under the Basel III Rule on a fully phased-in basis as if such requirements had been in effect (dollars in thousands).


					Minimum				Minimum
					Capital Requirement with				To Be Well
	Actual				Capital Buffer				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2018:
Total Capital (to Risk Weighted Assets)
Consolidated	$	877,322	14.34	%	$	603,990	9.875	%	$	611,636	10.00	%
Busey Bank	$	865,523	14.22	%	$	600,987	9.875	%	$	608,594	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	764,579	12.50	%	$	481,663	7.875	%	$	489,309	8.00	%
Busey Bank	$	812,780	13.36	%	$	479,268	7.875	%	$	486,875	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	690,579	11.29	%	$	389,918	6.375	%	$	397,564	6.50	%
Busey Bank	$	812,780	13.36	%	$	387,979	6.375	%	$	395,586	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	764,579	10.17	%	$	300,787	4.00	%		N/A	N/A
Busey Bank	$	812,780	10.84	%	$	299,786	4.00	%	$	374,733	5.00	%

					Minimum				Minimum
					Capital Requirement with				To Be Well
	Actual				Capital Buffer				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2017:
Total Capital (to Risk Weighted Assets)
Consolidated	$	837,183	14.15	%	$	547,265	9.250	%	$	591,638	10.00	%
Busey Bank	$	704,807	12.78	%	$	509,978	9.250	%	$	551,327	10.00	%
South Side Bank	$	84,914	22.61	%	$	34,744	9.250	%	$	37,561	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	718,101	12.14	%	$	428,937	7.250	%	$	473,310	8.00	%
Busey Bank	$	651,432	11.82	%	$	399,713	7.250	%	$	441,062	8.00	%
South Side Bank	$	84,707	22.55	%	$	27,232	7.250	%	$	30,049	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	644,633	10.90	%	$	340,192	5.750	%	$	384,565	6.50	%
Busey Bank	$	651,432	11.82	%	$	317,013	5.750	%	$	358,363	6.50	%
South Side Bank	$	84,707	22.55	%	$	21,598	5.750	%	$	24,415	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	718,101	9.78	%	$	293,588	4.00	%		N/A	N/A
Busey Bank	$	651,432	9.80	%	$	265,847	4.00	%	$	332,309	5.00	%
South Side Bank	$	84,707	12.75	%	$	26,571	4.00	%	$	33,214	5.00	%

Operating Segments and Related Information (Tables)

9 Months Ended

Sep. 30, 2018

Operating Segments and Related Information

Summary of information relating to operating segments

Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands):


	Goodwill				Total Assets
	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017

Banking	$	246,999	$	248,660	$	7,831,967	$	7,809,738
Remittance Processing		8,992		8,992		37,809		34,646
Wealth Management		11,694		11,694		33,543		32,077
Other		—		—		(13,934)		(15,821)
Totals	$	267,685	$	269,346	$	7,889,385	$	7,860,640


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net interest income:
Banking	$	62,578	$	57,589	$	186,103	$	143,496
Remittance Processing		17		15		49		44
Wealth Management		110		87		304		233
Other		(1,931)		(1,750)		(5,553)		(3,453)
Total net interest income	$	60,774	$	55,941	$	180,903	$	140,320

Non-interest income:
Banking	$	11,196	$	12,338	$	33,827	$	33,550
Remittance Processing		4,042		3,032		11,812		9,061
Wealth Management		7,391		5,941		23,840		19,649
Other		(776)		(474)		(2,338)		(1,347)
Total non-interest income	$	21,853	$	20,837	$	67,141	$	60,913

Non-interest expense:
Banking	$	37,034	$	38,697	$	116,275	$	97,318
Remittance Processing		2,718		2,190		7,808		6,476
Wealth Management		4,307		3,896		13,921		11,840
Other		1,870		2,156		6,270		5,692
Total non-interest expense	$	45,929	$	46,939	$	144,274	$	121,326

Income before income taxes:
Banking	$	35,982	$	29,736	$	99,631	$	77,234
Remittance Processing		1,341		856		4,053		2,629
Wealth Management		3,194		2,132		10,223		8,042
Other		(4,577)		(4,379)		(14,161)		(10,492)
Total income before income taxes	$	35,940	$	28,345	$	99,746	$	77,413

Net income:
Banking	$	26,486	$	18,942	$	73,235	$	49,546
Remittance Processing		957		505		2,896		1,567
Wealth Management		2,280		1,237		7,332		4,760
Other		(2,864)		(1,900)		(9,825)		(5,440)
Total net income	$	26,859	$	18,784	$	73,638	$	50,433

Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Interest rate lock commitments and forward sales commitments

Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet


	September 30, 2018		December 31, 2017
Fair value recorded in other assets	$	322	$	675
Fair value recorded in other liabilities		561		2,148

Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross gains	$	641	$	3,822	$	2,396	$	12,629
Gross (losses)		(561)		(3,083)		(2,669)		(11,102)
Net gains (losses)	$	80	$	739	$	(273)	$	1,527

Interest rate swap

Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet

The fair values of derivative assets and liabilities related to interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


		September 30, 2018		December 31, 2017
Fair value recorded in other assets	$	2,428	$	262
Fair value recorded in other liabilities		2,428		262

Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income


	Three Months Ended September 30, 2018				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross gains	$	724	$	128	$	2,167	$	429
Gross losses		(724)		(128)		(2,167)		(429)
Net gains (losses)	$	—	$	—	$	—	$	—

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Measurements

Schedule of financial assets and financial liabilities measured at fair value on a recurring basis


	Level 1		Level 2		Level 3		Total
September 30, 2018	Inputs		Inputs		Inputs		Fair Value
Fair value adjusted through comprehensive income:
Securities available for sale
U.S. Treasury securities	$	—	$	59,854	$	—	$	59,854
Obligations of U.S. government corporations and agencies		—		89,666		—		89,666
Obligations of states and political subdivisions		—		241,925		—		241,925
Residential mortgage-backed securities		—		331,582		—		331,582
Corporate debt securities		—		140,354		—		140,354
Fair value adjusted through current period earnings:
Securities equity investments		7,317		—		—		7,317
Loans held for sale		—		32,617		—		32,617
Derivative assets		—		2,750		—		2,750
Derivative liabilities		—		2,989		—		2,989


	Level 1		Level 2		Level 3		Total
December 31, 2017	Inputs		Inputs		Inputs		Fair Value
Securities available for sale
U.S. Treasury securities	$	—	$	60,348	$	—	$	60,348
Obligations of U.S. government corporations and agencies		—		103,665		—		103,665
Obligations of states and political subdivisions		—		280,199		—		280,199
Residential mortgage-backed securities		—		397,436		—		397,436
Corporate debt securities		—		31,034		—		31,034
Securities equity investments		5,378		—		—		5,378
Loans held for sale		—		94,848		—		94,848
Derivative assets		—		937		—		937
Derivative liabilities		—		2,410		—		2,410

Schedule of assets and liabilities measured at fair value on a non-recurring basis


	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
September 30, 2018
Impaired loans	$	—	$	—	$	12,647	$	12,647
OREO		—		—		55		55
Bank property held for sale		—		—		3,711		3,711


December 31, 2017
Impaired loans	$	—	$	—	$	1,313	$	1,313
OREO(1)		—		—		—		—

(1)

OREO fair value was less than one thousand dollars.

Schedule of quantitative information about Level 3 fair value measurements


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
	Estimate		Techniques	Input	(Weighted Average)
September 30, 2018
Impaired loans	$	12,647	Appraisal of collateral	Appraisal adjustments	- 2.3	%	to	- 100.0	%
					(-20.3)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		3,711	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 0.0	%	to	- 35.1	%
					(-18.0)%

December 31, 2017
Impaired loans	$	1,313	Appraisal of collateral	Appraisal adjustments	- 20.3	%	to	- 100.0	%
					(-30.8)%
OREO(1)		—	Appraisal of collateral	Appraisal adjustments	-100.0%
					(-100.0)%

(1)

OREO fair value was less than one thousand dollars.

Schedule of estimated fair values of financial instruments


	September 30, 2018				December 31, 2017
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	160,652	$	160,652	$	353,272	$	353,272
Level 2 inputs:
Securities held to maturity		626,250		611,302		443,550		441,052
Accrued interest receivable		25,321		25,321		22,591		22,591
Level 3 inputs:
Portfolio loans, net		5,570,998		5,424,280		5,465,918		5,361,406
Mortgage servicing rights		3,456		11,147		3,680		8,635
Other servicing rights		616		1,236		280		901

Financial liabilities:
Level 2 inputs:
Time deposits(2)	$	1,552,283	$	1,536,729	$	—	$	—
Deposits(2)		—		—		6,125,965		6,119,135
Securities sold under agreements to repurchase		255,906		255,906		304,566		304,566
Short-term borrowings		200,000		200,000		220,000		220,000
Long-term debt		50,000		49,562		50,000		50,000
Junior subordinated debt owed to unconsolidated trusts		71,118		71,118		71,008		71,008
Accrued interest payable		6,731		6,731		2,581		2,581
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,505		38,382		39,404		39,104
Subordinated notes, net of unamortized issuance costs		59,121		57,470		64,715		64,350

(1)

In connection with the adoption of ASU 2016-01 in 2018, only deposits with stated maturities are required to be disclosed.

Accounting Policies - Recently Issued Accounting Standards (Details) - Adjustments - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Sep. 30, 2018
Accounting Standards Update 2016-01
Recently Issued Accounting Standards
Cumulative Effect of New Accounting Principle in Period of Adoption		$ 0.0
Accounting Standards Update 2018-02
Recently Issued Accounting Standards
Tax Cuts and Jobs Act (“TCJA”) of 2017 reclassification	$ 0.0

Acquisitions - First Community Financial Partners, Inc. (Details) $ / shares in Units, $ in Thousands, shares in Millions		3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 02, 2017 USD ($) item $ / shares	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) $ / shares	Dec. 31, 2017 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2016 USD ($)
Consideration paid:
Goodwill				$ 267,685		$ 269,346
Portfolio Loans, allowance for loan losses (in dollars)		$ 51,035	$ 49,201	52,743	$ 51,035	53,582	$ 53,305	$ 47,795
First Community
Business Acquisition
Number of banking centers \| item	9
Share consideration conversion ratio	0.396
Per share cash consideration entitled (in dollars per share) \| $ / shares	$ 1.35
Number of common shares issued for acquisition \| shares			7.2
Market value of common stock issued			$ 211,100
Share price \| $ / shares			$ 29.32
Options to purchase common stock, conversion ratio	0.44
Assets acquired:
Cash and cash equivalents	$ 60,686
Securities	165,843
Loans held for sale	905
Portfolio loans	1,096,583
Premises and equipment	18,094
OREO	722
Other intangible assets	13,979
Other assets	41,755
Total assets acquired	1,398,567
Liabilities assumed:
Deposits	1,134,355
Other borrowings	125,751
Other liabilities	11,862
Total liabilities assumed	1,271,968
Net assets acquired	126,599
Consideration paid:
Cash	24,557
Cash payout of options and restricted stock units	6,182
Common stock	211,120
Fair value of stock options assumed	722
Total consideration paid	242,581
Goodwill	115,982
Fair value of performing loans, including loans held for sale	1,100,000
Amount expected to be accreted, gross	$ 14,400
Estimated remaining life for loans expected to be accreted (in years)	4 years
Contractual amount of PCI loans	$ 17,900
Fair value of credit-impaired loans	12,500
PCI loan outstanding amount				2,700
Accretable yield expected to be recognized over the estimated period	600
Amount accelerated as a result of collections of PCI loan balances						$ 200
Total revenues (net interest income plus non-interest income)					231,301
Net income					$ 56,348
Diluted earnings per common share (in dollars per share) \| $ / shares					$ 1.23
Portfolio Loans, allowance for loan losses (in dollars)	$ 0
First Community \| Non-interest expense
Business Acquisition
Business acquisition expenses		$ 2,900		$ 100	$ 3,700

Acquisitions - Mid Illinois Bancorp, Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 01, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Mar. 31, 2018	Dec. 31, 2017
Consideration paid:
Goodwill		$ 267,685		$ 267,685			$ 269,346
Bank properties held for sale before impairment		4,500		4,500
Impairment charge				817
Premises and equipment, net
Consideration paid:
Bank properties held for sale, net		3,700		3,700
Non-recurring basis
Consideration paid:
Bank properties held for sale, net		3,711		3,711
Mid Illinois Bancorp, Inc.
Business Acquisition
Per share cash consideration entitled (in dollars per share)	$ 227.94
Number of common shares issued for acquisition	7.5149
Assets acquired:
Cash and cash equivalents	$ 39,443
Securities	208,003
Loans held for sale	5,031
Portfolio loans	356,651
Premises and equipment	16,551
Other intangible assets	11,531
Other assets	29,564
Total assets acquired	666,774
Liabilities assumed:
Deposits	505,917
Other borrowings	61,040
Other liabilities	10,497
Total liabilities assumed	577,454
Net assets acquired	89,320
Consideration paid:
Cash	40,507
Common stock	97,702
Total consideration paid	138,209
Goodwill	48,889					$ 48,900
Aggregate principal outstanding	362,400
Fair value of performing loans, including loans held for sale	357,000
Amount expected to be accreted, gross	$ 5,400
Estimated remaining life for loans expected to be accreted (in years)	4 years
Contractual amount of PCI loans	$ 7,600
Fair value of credit-impaired loans	4,700
PCI loan outstanding amount		100		100
Accretable yield expected to be recognized over the estimated period	$ 100
Mixed consideration in cash (in dollars per share)	$ 68.38
Mixed consideration in shares (in dollars per share)	5.2604
Total consideration in stock (as a percent)	70.00%
Total consideration in cash (as a percent)	30.00%
Mid Illinois Bancorp, Inc. \| Non-interest expense
Business Acquisition
Business acquisition expenses		$ 0	$ 200	$ 3,100	$ 400

Acquisitions - The Banc Ed Corp. (Details) - The Banc Ed Corp. - USD ($) $ / shares in Units, $ in Millions		3 Months Ended	9 Months Ended
	Aug. 21, 2018	Sep. 30, 2018	Sep. 30, 2018
Non-interest expense
Merger agreement
Business acquisition expenses		$ 0.2	$ 0.2
Subject to customary closing conditions
Merger agreement
Total consolidated assets		1,800.0	1,800.0
Total loans		914.5	914.5
Total deposits		$ 1,600.0	$ 1,600.0
Per share cash consideration entitled (in dollars per share)	$ 111.53
Number of common shares issued for acquisition	8.2067
Total consideration, stock, percentage	70.00%
Total consideration, cash, percentage	30.00%

Securities - General Disclosures (Details) $ in Thousands	3 Months Ended	9 Months Ended
Securities - General Disclosures (Details) $ in Thousands	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Securities
Equity securities consisting of common stock and money market mutual funds, fair value		$ 7,317		$ 5,378
Available for sale
Amortized Cost		881,597		877,459
Gross Unrealized Gains		546		1,912
Gross Unrealized Losses		(18,762)		(6,689)
Fair Value		863,381		872,682
Held to maturity
Amortized Cost		626,250		443,550
Gross Unrealized Gains		13		294
Gross Unrealized Losses		(14,961)		(2,792)
Fair Value		611,302		441,052
Available for sale, Amortized Cost
Due in one year or less		86,344
Due after one year through five years		335,204
Due after five years through ten years		152,272
Due after ten years		307,777
Amortized Cost		881,597		877,459
Available for sale, Fair Value
Due in one year or less		86,041
Due after one year through five years		330,511
Due after five years through ten years		149,199
Due after ten years		297,630
Fair Value		863,381		872,682
Held to maturity, Amortized Cost
Due in one year or less		9,858
Due after one year through five years		56,077
Due after five years through ten years		29,754
Due after ten years		530,561
Amortized Cost		626,250		443,550
Held to maturity, Fair Value
Due in one year or less		9,837
Due after one year through five years		54,998
Due after five years through ten years		28,867
Due after ten years		517,600
Fair Value		611,302		441,052
Realized gains and losses related to sales of securities
Gross security gains	$ 290		$ 1,259
Gross security (losses)			(116)
Security gains, net	290		1,143
Tax provision related to net realized gains (losses)	$ 100		$ 400
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		595,739		540,033
Continuous unrealized losses existing for greater than 12 months, gross		233,589		127,806
Total		829,328		667,839
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(9,880)		(3,623)
Continuous unrealized losses existing for greater than 12 months, gross		(8,882)		(3,066)
Total		(18,762)		(6,689)
Held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		531,583		340,279
Continuous unrealized losses existing for greater than 12 months, gross		76,161		2,374
Total		607,744		342,653
Held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(11,219)		(2,709)
Continuous unrealized losses existing for greater than 12 months, gross		(3,742)		(83)
Total		$ (14,961)		(2,792)
Number of securities in unrealized loss position \| item		897
Securities in unrealized loss position as a percentage of aggregate carrying value of investments		2.29%
Collateral
Realized gains and losses related to sales of securities
Carrying amount of investment securities pledged as collateral		$ 598,700		638,200
Money market mutual funds
Securities
Equity securities consisting of common stock and money market mutual funds, fair value		7,300		4,600
U.S. Treasury securities
Available for sale
Amortized Cost		61,066		60,829
Gross Unrealized Gains				7
Gross Unrealized Losses		(1,212)		(488)
Fair Value		59,854		60,348
Available for sale, Amortized Cost
Amortized Cost		61,066		60,829
Available for sale, Fair Value
Fair Value		59,854		60,348
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		35,883		59,773
Continuous unrealized losses existing for greater than 12 months, gross		23,971
Total		59,854		59,773
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(471)		(488)
Continuous unrealized losses existing for greater than 12 months, gross		(741)
Total		(1,212)		(488)
Obligations of U.S. government corporations and agencies
Available for sale
Amortized Cost		91,767		104,807
Gross Unrealized Gains		5		1
Gross Unrealized Losses		(2,106)		(1,143)
Fair Value		89,666		103,665
Available for sale, Amortized Cost
Amortized Cost		91,767		104,807
Available for sale, Fair Value
Fair Value		89,666		103,665
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		29,899		78,610
Continuous unrealized losses existing for greater than 12 months, gross		58,946		24,831
Total		88,845		103,441
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(707)		(636)
Continuous unrealized losses existing for greater than 12 months, gross		(1,399)		(507)
Total		(2,106)		(1,143)
Obligations of states and political subdivisions
Available for sale
Amortized Cost		245,459		280,216
Gross Unrealized Gains		315		1,160
Gross Unrealized Losses		(3,849)		(1,177)
Fair Value		241,925		280,199
Held to maturity
Amortized Cost		36,689		41,300
Gross Unrealized Gains		13		228
Gross Unrealized Losses		(301)		(64)
Fair Value		36,401		41,464
Available for sale, Amortized Cost
Amortized Cost		245,459		280,216
Available for sale, Fair Value
Fair Value		241,925		280,199
Held to maturity, Amortized Cost
Amortized Cost		36,689		41,300
Held to maturity, Fair Value
Fair Value		36,401		41,464
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		186,959		162,213
Continuous unrealized losses existing for greater than 12 months, gross		36,612		12,045
Total		223,571		174,258
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(3,067)		(1,027)
Continuous unrealized losses existing for greater than 12 months, gross		(782)		(150)
Total		(3,849)		(1,177)
Held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		31,932		17,939
Continuous unrealized losses existing for greater than 12 months, gross		911
Total		32,843		17,939
Held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(284)		(64)
Continuous unrealized losses existing for greater than 12 months, gross		(17)
Total		(301)		(64)
Residential mortgage-backed securities
Available for sale
Amortized Cost		342,421		400,661
Gross Unrealized Gains		207		612
Gross Unrealized Losses		(11,046)		(3,837)
Fair Value		331,582		397,436
Held to maturity
Amortized Cost		529,389		341,776
Gross Unrealized Gains				25
Gross Unrealized Losses		(12,955)		(2,431)
Fair Value		516,434		339,370
Available for sale, Amortized Cost
Amortized Cost		342,421		400,661
Available for sale, Fair Value
Fair Value		331,582		397,436
Held to maturity, Amortized Cost
Amortized Cost		529,389		341,776
Held to maturity, Fair Value
Fair Value		516,434		339,370
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		204,979		223,261
Continuous unrealized losses existing for greater than 12 months, gross		114,013		90,930
Total		318,992		314,191
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(5,089)		(1,428)
Continuous unrealized losses existing for greater than 12 months, gross		(5,957)		(2,409)
Total		(11,046)		(3,837)
Held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		449,798		277,826
Continuous unrealized losses existing for greater than 12 months, gross		66,636
Total		516,434		277,826
Held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(9,550)		(2,431)
Continuous unrealized losses existing for greater than 12 months, gross		(3,405)
Total		(12,955)		(2,431)
Corporate debt securities
Available for sale
Amortized Cost		140,884		30,946
Gross Unrealized Gains		19		132
Gross Unrealized Losses		(549)		(44)
Fair Value		140,354		31,034
Available for sale, Amortized Cost
Amortized Cost		140,884		30,946
Available for sale, Fair Value
Fair Value		140,354		31,034
Available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		138,019		16,176
Continuous unrealized losses existing for greater than 12 months, gross		47
Total		138,066		16,176
Available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(546)		(44)
Continuous unrealized losses existing for greater than 12 months, gross		(3)
Total		(549)		(44)
Commercial mortgage-backed securities
Held to maturity
Amortized Cost		60,172		60,474
Gross Unrealized Gains				41
Gross Unrealized Losses		(1,705)		(297)
Fair Value		58,467		60,218
Held to maturity, Amortized Cost
Amortized Cost		60,172		60,474
Held to maturity, Fair Value
Fair Value		58,467		60,218
Held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross		49,853		44,514
Continuous unrealized losses existing for greater than 12 months, gross		8,614		2,374
Total		58,467		46,888
Held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross		(1,385)		(214)
Continuous unrealized losses existing for greater than 12 months, gross		(320)		(83)
Total		(1,705)		(297)
Common Stock
Securities
Equity securities consisting of common stock and money market mutual funds, fair value				$ 800
Realized security gains		200
Non-interest income \| Common Stock
Securities
Unrealized losses recorded		$ (100)

Securities - Obligations by State (Details) $ in Thousands	9 Months Ended	12 Months Ended
Securities - Obligations by State (Details) $ in Thousands	Sep. 30, 2018 USD ($) item	Dec. 31, 2017 USD ($) item
Securities
Available for sale, fair value	$ 863,381	$ 872,682
Held to maturity, fair value	$ 611,302	$ 441,052
General obligation bonds
Securities
Number of Issuers \| item	332	381
Amortized Cost	$ 239,384	$ 271,499
Fair Value	236,167	271,659
Average Exposure Per Issuer (Fair Value)	711	713
Amount of largest exposure to a single issuer	$ 4,900	$ 4,000
Percentage of the entity's stockholders equity in excess of aggregate book or market value	10.00%	10.00%
Percentage of bonds rated by nationally recognized rating organization	99.10%	99.30%
Percentage of bonds unrated	0.90%	0.70%
Minimum number of nationally recognized rating organizations \| item	1	1
General obligation bonds \| Illinois
Securities
Number of Issuers \| item	89	97
Amortized Cost	$ 87,902	$ 95,340
Fair Value	86,739	95,344
Average Exposure Per Issuer (Fair Value)	$ 975	$ 983
General obligation bonds \| Wisconsin
Securities
Number of Issuers \| item	27	41
Amortized Cost	$ 18,971	$ 27,852
Fair Value	18,690	27,809
Average Exposure Per Issuer (Fair Value)	$ 692	$ 678
General obligation bonds \| Texas
Securities
Number of Issuers \| item	43	46
Amortized Cost	$ 24,893	$ 27,485
Fair Value	24,431	27,514
Average Exposure Per Issuer (Fair Value)	$ 568	$ 598
General obligation bonds \| Michigan
Securities
Number of Issuers \| item	25	34
Amortized Cost	$ 13,589	$ 19,641
Fair Value	13,620	19,849
Average Exposure Per Issuer (Fair Value)	$ 545	$ 584
General obligation bonds \| Ohio
Securities
Number of Issuers \| item	20	20
Amortized Cost	$ 14,665	$ 15,172
Fair Value	14,505	15,162
Average Exposure Per Issuer (Fair Value)	$ 725	$ 758
General obligation bonds \| Pennsylvania
Securities
Number of Issuers \| item	15	18
Amortized Cost	$ 9,250	$ 12,189
Fair Value	9,197	12,174
Average Exposure Per Issuer (Fair Value)	$ 613	$ 676
General obligation bonds \| New Jersey
Securities
Number of Issuers \| item	12	15
Amortized Cost	$ 5,576	$ 7,755
Fair Value	5,525	7,760
Average Exposure Per Issuer (Fair Value)	$ 460	$ 517
General obligation bonds \| Missouri
Securities
Number of Issuers \| item	9	10
Amortized Cost	$ 5,556	$ 5,759
Fair Value	5,472	5,747
Average Exposure Per Issuer (Fair Value)	$ 608	$ 575
General obligation bonds \| Minnesota
Securities
Number of Issuers \| item		8
Amortized Cost		$ 5,657
Fair Value		5,667
Average Exposure Per Issuer (Fair Value)		$ 708
General obligation bonds \| California
Securities
Number of Issuers \| item	7
Amortized Cost	$ 8,829
Fair Value	8,765
Average Exposure Per Issuer (Fair Value)	$ 1,252
General obligation bonds \| Other
Securities
Number of Issuers \| item	85	92
Amortized Cost	$ 50,153	$ 54,649
Fair Value	49,223	54,633
Average Exposure Per Issuer (Fair Value)	$ 579	$ 594
Revenue bonds
Securities
Number of Issuers \| item	54	65
Amortized Cost	$ 42,764	$ 50,017
Fair Value	42,159	50,004
Average Exposure Per Issuer (Fair Value)	781	769
Amount of largest exposure to a single issuer	$ 3,500	$ 3,600
Percentage of the entity's stockholders equity in excess of aggregate book or market value	10.00%	10.00%
Percentage of bonds rated by nationally recognized rating organization	100.00%	99.40%
Percentage of bonds unrated		0.60%
Minimum number of nationally recognized rating organizations \| item	1	1
Revenue bonds \| Indiana
Securities
Number of Issuers \| item	13	14
Amortized Cost	$ 10,902	$ 12,001
Fair Value	10,801	12,054
Average Exposure Per Issuer (Fair Value)	$ 831	$ 861
Revenue bonds \| Illinois
Securities
Number of Issuers \| item	5	7
Amortized Cost	$ 5,218	$ 6,477
Fair Value	5,128	6,456
Average Exposure Per Issuer (Fair Value)	$ 1,026	$ 922
Revenue bonds \| Missouri
Securities
Number of Issuers \| item	5	6
Amortized Cost	$ 7,041	$ 7,376
Fair Value	6,966	7,336
Average Exposure Per Issuer (Fair Value)	$ 1,393	$ 1,223
Revenue bonds \| Other
Securities
Number of Issuers \| item	31	38
Amortized Cost	$ 19,603	$ 24,163
Fair Value	19,264	24,158
Average Exposure Per Issuer (Fair Value)	621	636
Obligations of states and political subdivisions
Securities
Available for sale, fair value	241,925	280,199
Held to maturity, fair value	$ 36,401	$ 41,464
Number of Issuers \| item	386	446
Total capital for rated securities (as a percent)	100.00%
Total capital for unrated securities (as a percent)	15.00%
Obligations of states and political subdivisions \| General obligation bonds
Securities
Fair Value	$ 236,200	$ 271,700
Number of states in which investment is held \| item	35	36
Number of states in which investment is held in excess of aggregate fair value \| item	9	9
Aggregate fair value	$ 5,000	$ 5,000
Obligations of states and political subdivisions \| Revenue bonds
Securities
Fair Value	$ 42,100	$ 50,000
Number of states in which investment is held \| item	20	22
Number of states in which investment is held in excess of aggregate fair value \| item	3	3
Aggregate fair value	$ 5,000	$ 5,000

Loans held for sale (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Loans held for sale (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Loans held for sale
Loans held for sale	$ 32,617		$ 32,617		$ 94,848
Premiums received on sales of mortgage loans, including fair value adjustments	2,794	$ 11,366	9,779	$ 33,582
Less direct origination costs	(1,976)	(8,398)	(6,805)	(26,433)
Less provisions to liability for loans sold	(47)	(25)	(156)	(200)
Mortgage servicing revenues, net of servicing expense	501	583	1,670	1,481
Mortgage revenue	$ 1,272	$ 3,526	$ 4,488	$ 8,430

Portfolio loans - Distributions of Loans (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($) item mi	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Loans
Portfolio loans	$ 5,623,741		$ 5,519,500
Less allowance for loan losses	52,743	$ 53,305	53,582	$ 51,035	$ 49,201	$ 47,795
Portfolio loans, net	5,570,998		5,465,918
Net deferred loan origination costs	5,600		4,100
Amount of loan reduction due to net accretable purchase accounting adjustments	$ 15,800		23,600
Minimum target period for lending via intermediate term loans	0 years
Maximum target period for lending via intermediate term loans	7 years
Geographical area from lending offices which attempt is made to lend short and intermediate term loans (in miles) \| mi	125
Number of primary areas for lending loan \| item	5
Commercial
Loans
Portfolio loans	$ 1,461,186		1,414,631
Less allowance for loan losses	18,966	17,586	14,779	13,522	12,928	13,303
Commercial real estate
Loans
Portfolio loans	2,371,868		2,354,684
Less allowance for loan losses	21,752	23,047	21,813	20,876	20,124	20,623
Real estate construction
Loans
Portfolio loans	308,762		261,506
Less allowance for loan losses	2,932	2,915	2,861	2,261	2,161	1,870
Retail real estate
Loans
Portfolio loans	1,453,266		1,460,801
Less allowance for loan losses	8,622	9,293	13,783	14,076	13,681	11,648
Retail other
Loans
Portfolio loans	28,659		27,878
Less allowance for loan losses	$ 471	$ 464	$ 346	$ 300	$ 307	$ 351

Portfolio loans - Risk Grading (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Pass and watch
Loans
Portfolio loans receivable	$ 5,400,000	$ 5,300
Special mention, substandard and doubtful
Loans
Portfolio loans receivable	279,000	193,800
Pass
Loans
Portfolio loans receivable	5,049,360	5,022,249
Watch
Loans
Portfolio loans receivable	302,035	320,016
Special Mention
Loans
Limit above which loans are annually reviewed	350
Portfolio loans receivable	136,504	81,559
Substandard
Loans
Portfolio loans receivable	102,146	87,628
Doubtful
Loans
Portfolio loans receivable	40,395	24,624
Commercial \| Pass and watch
Loans
Limit where loans are processed through an expedited underwriting process	350
Commercial \| Pass and watch \| Minimum
Loans
Limit where loans are processed through an expedited underwriting process	350
Commercial \| Pass and watch \| Maximum
Loans
Limit where loans are processed through an expedited underwriting process	1,000
Commercial \| Pass
Loans
Portfolio loans receivable	1,205,074	1,175,421
Commercial \| Watch
Loans
Limit above which loans are annually reviewed	1,000
Portfolio loans receivable	136,262	141,776
Commercial \| Special Mention
Loans
Portfolio loans receivable	51,840	51,366
Commercial \| Substandard
Loans
Portfolio loans receivable	48,266	43,933
Commercial \| Doubtful
Loans
Portfolio loans receivable	20,994	5,285
Commercial real estate \| Maximum
Loans
Limit where loans are processed through an expedited underwriting process	1,000
Commercial real estate \| Pass
Loans
Portfolio loans receivable	2,098,441	2,169,420
Commercial real estate \| Watch
Loans
Portfolio loans receivable	146,634	130,056
Commercial real estate \| Special Mention
Loans
Portfolio loans receivable	76,941	21,151
Commercial real estate \| Substandard
Loans
Portfolio loans receivable	46,267	36,482
Commercial real estate \| Doubtful
Loans
Portfolio loans receivable	13,417	11,997
Real estate construction \| Pass
Loans
Portfolio loans receivable	289,134	212,952
Real estate construction \| Watch
Loans
Portfolio loans receivable	14,977	41,292
Real estate construction \| Special Mention
Loans
Portfolio loans receivable	3,110	3,880
Real estate construction \| Substandard
Loans
Portfolio loans receivable	1,923	3,071
Real estate construction \| Doubtful
Loans
Portfolio loans receivable	21	608
Retail real estate \| Pass
Loans
Portfolio loans receivable	1,427,792	1,436,156
Retail real estate \| Watch
Loans
Portfolio loans receivable	4,162	6,883
Retail real estate \| Special Mention
Loans
Portfolio loans receivable	4,613	5,162
Retail real estate \| Substandard
Loans
Portfolio loans receivable	5,690	4,135
Retail real estate \| Doubtful
Loans
Portfolio loans receivable	5,931	6,714
Retail other \| Pass
Loans
Portfolio loans receivable	28,919	28,300
Retail other \| Watch
Loans
Portfolio loans receivable		9
Retail other \| Substandard
Loans
Portfolio loans receivable		7
Retail other \| Doubtful
Loans
Portfolio loans receivable	$ 32	$ 20

Portfolio loans - Past due loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Loans past due, still accruing
Loans past due, still accruing	$ 364		$ 364		$ 2,741
Non-accrual Loans	40,395		40,395		24,624
Gross interest income that would have been recorded if impaired loans had been current	400	$ 400	$ 1,100	$ 900
Restructured loan included in non-performing loans			90 days
Restructured loans:
Total loans	10,236		$ 10,236		11,900
30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	5,955		5,955		8,477
60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	2,234		2,234		4,420
In compliance with modified terms
Restructured loans:
Total loans	8,695		8,695		9,873
30-89 days past due
Restructured loans:
Total loans					108
Included in non-performing loans
Restructured loans:
Total loans	1,541		1,541		1,919
Commercial
Loans past due, still accruing
Loans past due, still accruing	100		100		1,808
Non-accrual Loans	20,994		20,994		5,285
Commercial \| 30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	284		284		1,615
Commercial \| 60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	13		13		323
Commercial real estate
Loans past due, still accruing
Non-accrual Loans	13,417		13,417		11,997
Commercial real estate \| 30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	1,123		1,123		1,856
Commercial real estate \| 60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	86		86		2,737
Real estate construction
Loans past due, still accruing
Non-accrual Loans	21		21		608
Real estate construction \| 30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	280		280
Real estate construction \| 60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	651		651
Retail real estate
Loans past due, still accruing
Loans past due, still accruing	264		264		933
Non-accrual Loans	5,931		5,931		6,714
Retail real estate \| 30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	4,111		4,111		4,840
Retail real estate \| 60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	1,478		1,478		1,355
Retail other
Loans past due, still accruing
Non-accrual Loans	32		32		20
Retail other \| 30 to 59 Days
Loans past due, still accruing
Loans past due, still accruing	157		157		166
Retail other \| 60 to 89 Days
Loans past due, still accruing
Loans past due, still accruing	$ 6		$ 6		$ 5

Portfolio loans - Impaired Loans (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Portfolio loans - Impaired Loans (Details) $ in Thousands	Sep. 30, 2018 USD ($) contract	Sep. 30, 2017 USD ($) contract item	Sep. 30, 2018 USD ($) contract item	Sep. 30, 2017 USD ($) contract item	Dec. 31, 2017 USD ($)
Loans
Number of contracts \| contract	0	0	0	0
Minimum days past due for TDR loans to be classified as non-performing			90 days
Unpaid Contractual Principal Balance	$ 58,414		$ 58,414		$ 52,419
Recorded Investment with No Allowance	34,909		34,909		39,657
Recorded Investment with Allowance	18,010		18,010		2,180
Total Recorded Investment	52,919		52,919		41,837
Related Allowance	5,363		5,363		867
Average Recorded Investment			45,153		39,124
Commercial
Loans
Unpaid Contractual Principal Balance	24,479		24,479		10,604
Recorded Investment with No Allowance	9,518		9,518		7,192
Recorded Investment with Allowance	11,713		11,713		191
Total Recorded Investment	21,231		21,231		7,383
Related Allowance	3,691		3,691		138
Average Recorded Investment			11,395		10,184
Commercial real estate
Loans
Unpaid Contractual Principal Balance	19,994		19,994		22,218
Recorded Investment with No Allowance	12,851		12,851		16,472
Recorded Investment with Allowance	6,197		6,197		1,964
Total Recorded Investment	19,048		19,048		18,436
Related Allowance	1,572		1,572		704
Average Recorded Investment			18,528		15,195
Real estate construction
Loans
Unpaid Contractual Principal Balance	429		429		1,040
Recorded Investment with No Allowance	405		405		1,016
Total Recorded Investment	405		405		1,016
Average Recorded Investment			826		692
Retail real estate
Loans
Unpaid Contractual Principal Balance	13,395		13,395		18,517
Recorded Investment with No Allowance	12,103		12,103		14,957
Recorded Investment with Allowance	100		100		25
Total Recorded Investment	12,203		12,203		14,982
Related Allowance	100		100		25
Average Recorded Investment			14,361		13,009
Retail other
Loans
Unpaid Contractual Principal Balance	117		117		40
Recorded Investment with No Allowance	32		32		20
Total Recorded Investment	32		32		20
Average Recorded Investment			$ 43		$ 44
In compliance with modified terms
Loans
Recorded investment for short-term interest-rate relief	$ 0
In compliance with modified terms \| Commercial
Loans
Number of modifications for short-term principal payment relief \| item				1
Recorded investment for short-term principal payment relief				$ 1,700
In compliance with modified terms \| Retail real estate
Loans
Number of modifications for short-term principal payment relief \| item				2
Number of modifications for short-term interest-rate relief \| item		1	1	1
Recorded investment for short-term interest-rate relief		$ 200	$ 100	$ 500

Portfolio loans - Adverse Loan Grading (Details) $ in Billions	9 Months Ended
	Sep. 30, 2018 USD ($) item
Loans
The number of components contained in the general portion of the Company's allowance for loan losses	2
Number of quarters whose historical average is used to calculate the historical loss ratio	20
Balance of acquired loans \| $	$ 1.3
Substandard
Loans
Additional reserve (as a percent)	3.00%
Special Mention
Loans
Additional reserve (as a percent)	1.00%

Portfolio loans - Allowance for Loan Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Dec. 31, 2017
Changes in allowance for loan losses
Beginning balance	$ 53,305	$ 49,201	$ 53,582	$ 47,795
Provision for loan loss	758	1,494	4,024	2,494
Charged-off	(2,187)	(685)	(7,670)	(3,878)
Recoveries	867	1,025	2,807	4,624
Ending balance	52,743	51,035	52,743	51,035
Amount allocated to:
Loans individually evaluated for impairment					$ 5,363	$ 867
Loans collectively evaluated for impairment					47,380	52,715
Ending balance	53,305	49,201	53,582	47,795	52,743	53,582
Loans:
Loans individually evaluated for impairment					50,043	31,191
Loans collectively evaluated for impairment					5,570,822	5,477,663
Ending balance					5,623,741	5,519,500
Purchased Credit Impaired Loans
Loans:
Loans collectively evaluated for impairment					2,876	10,646
Commercial
Changes in allowance for loan losses
Beginning balance	17,586	12,928	14,779	13,303
Provision for loan loss	2,388	336	7,111	(1,885)
Charged-off	(1,144)	(60)	(3,841)	(241)
Recoveries	136	318	917	2,345
Ending balance	18,966	13,522	18,966	13,522
Amount allocated to:
Loans individually evaluated for impairment					3,691	138
Loans collectively evaluated for impairment					15,275	14,641
Ending balance	17,586	12,928	14,779	13,303	18,966	14,779
Loans:
Loans individually evaluated for impairment					20,807	6,572
Loans collectively evaluated for impairment					1,439,955	1,407,248
Ending balance					1,461,186	1,414,631
Commercial \| Purchased Credit Impaired Loans
Loans:
Loans collectively evaluated for impairment					424	811
Commercial real estate
Changes in allowance for loan losses
Beginning balance	23,047	20,124	21,813	20,623
Provision for loan loss	(1,291)	418	1,154	1,477
Charged-off	(62)	(69)	(1,487)	(1,758)
Recoveries	58	403	272	534
Ending balance	21,752	20,876	21,752	20,876
Amount allocated to:
Loans individually evaluated for impairment					1,572	704
Loans collectively evaluated for impairment					20,180	21,109
Ending balance	23,047	20,124	21,813	20,623	21,752	21,813
Loans:
Loans individually evaluated for impairment					16,752	11,491
Loans collectively evaluated for impairment					2,352,820	2,336,248
Ending balance					2,371,868	2,354,684
Commercial real estate \| Purchased Credit Impaired Loans
Loans:
Loans collectively evaluated for impairment					2,296	6,945
Real estate construction
Changes in allowance for loan losses
Beginning balance	2,915	2,161	2,861	1,870
Provision for loan loss	(15)	64	22	1
Charged-off			(97)	(48)
Recoveries	32	36	146	438
Ending balance	2,932	2,261	2,932	2,261
Amount allocated to:
Loans collectively evaluated for impairment					2,932	2,861
Ending balance	2,915	2,161	2,861	1,870	2,932	2,861
Loans:
Loans individually evaluated for impairment					405	435
Loans collectively evaluated for impairment					308,357	260,490
Ending balance					308,762	261,506
Real estate construction \| Purchased Credit Impaired Loans
Loans:
Loans collectively evaluated for impairment						581
Retail real estate
Changes in allowance for loan losses
Beginning balance	9,293	13,681	13,783	11,648
Provision for loan loss	(399)	654	(4,609)	2,894
Charged-off	(695)	(482)	(1,637)	(1,574)
Recoveries	423	223	1,085	1,108
Ending balance	8,622	14,076	8,622	14,076
Amount allocated to:
Loans individually evaluated for impairment					100	25
Loans collectively evaluated for impairment					8,522	13,758
Ending balance	9,293	13,681	13,783	11,648	8,622	13,783
Loans:
Loans individually evaluated for impairment					12,047	12,673
Loans collectively evaluated for impairment					1,441,063	1,445,819
Ending balance					1,453,266	1,460,801
Retail real estate \| Purchased Credit Impaired Loans
Loans:
Loans collectively evaluated for impairment					156	2,309
Retail other
Changes in allowance for loan losses
Beginning balance	464	307	346	351
Provision for loan loss	75	22	346	7
Charged-off	(286)	(74)	(608)	(257)
Recoveries	218	45	387	199
Ending balance	471	300	471	300
Amount allocated to:
Loans collectively evaluated for impairment					471	346
Ending balance	$ 464	$ 307	$ 346	$ 351	471	346
Loans:
Loans individually evaluated for impairment					32	20
Loans collectively evaluated for impairment					28,627	27,858
Ending balance					$ 28,659	$ 27,878

OREO (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
OREO (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
OREO
Other Real Estate, Beginning Balance	$ 1,283	$ 2,518	$ 2,518
Additions, transfers from loans	3,706		1,417
Proceeds from sales of OREO	(4,275)	$ (4,069)	(5,024)
Gain on sales of OREO	397		1,632
Valuation allowance for OREO	(18)		(42)
Other Real Estate, Ending Balance	1,093		1,283
Commercial real estate
Foreclosed Real Estate
Other real estate owned (OREO)	200		1,200
Residential real estate
Foreclosed Real Estate
Other real estate owned (OREO)	900		100
Residential real estate in the process of foreclosure	$ 2,400
First Community
OREO
Additions, fair value from acquisition			722
Mid Illinois
OREO
Additions, fair value from acquisition			$ 60

Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Deposits
Demand deposits, noninterest-bearing	$ 1,438,054	$ 1,597,421
Interest-bearing transaction deposits	1,325,702	1,166,170
Saving deposits and money market deposits	1,879,530	2,026,212
Time deposits	1,552,283	1,336,162
Total deposits	6,195,569	6,125,965
Brokered interest-bearing transaction deposits	5,000	5,000
Brokered saving deposits and money market deposits	30,000	75,100
Time deposits minimum denomination of $100,000 or more	655,700	578,900
Time deposits minimum denomination of $250,000 or more	249,700	197,900
Brokered time deposits	351,100	247,700
Deposits
July 1, 2018 — June 30, 2019	1,087,015
July 1, 2019 — June 30, 2020	293,053
July 1, 2020 — June 30, 2021	58,166
July 1, 2021 — June 30, 2022	73,509
July 1, 2022 — June 30, 2023	40,524
Thereafter	16
Total	$ 1,552,283	$ 1,336,162

Borrowings - Maturity period (Details)	9 Months Ended
Borrowings - Maturity period (Details)	Sep. 30, 2018
Maturity period
Maximum maturity period of short-term debt	1 year

Borrowings - Short-term borrowings (Details) - Line of Credit - USD ($) $ in Millions	Sep. 30, 2018	Apr. 30, 2018	Dec. 31, 2017
Revolving loan facility
Short-term borrowings
Outstanding amounts	$ 0.0		$ 0.0
Second amendment to extend credit facility
Short-term borrowings
Maximum borrowing capacity		$ 40.0
Third amendment to extend credit facility
Short-term borrowings
Maximum borrowing capacity	$ 20.0

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Borrowings - Securities sold under agreements to repurchase and short-term borrowings (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Securities sold under agreements to repurchase
Balance at end of period	$ 255,906	$ 304,566
Weighted average interest rate at end of period (as a percent)	0.85%	0.57%
Maximum outstanding at any month end in year-to-date period	$ 267,596	$ 304,566
Average daily balance for the year-to-date period	$ 242,268	$ 213,527
Weighted average interest rate during period (as a percent)	0.62%	0.46%
Short-term borrowings
Balance at end of period	$ 200,000	$ 220,000
FHLB advances
Short-term borrowings
Balance at end of period	$ 200,000	$ 220,000
Weighted average interest rate at end of period	2.24%	1.42%
Maximum outstanding at any month end in year-to-date period	$ 225,000	$ 234,600
Average daily balance for the year-to-date period	$ 93,022	$ 84,201
Weighted average interest rate during period	1.73%	1.20%

Borrowings - Long-term debt (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Long-term debt
Long-term debt	$ 50,000	$ 50,000
FHLB advances
Long-term debt
Long-term debt	$ 50,000	$ 50,000
Weighted average rate (as a percent)	2.08%	1.19%
FHLB advances \| Minimum
Long-term debt
Interest rate (as a percent)	2.01%	1.10%
FHLB advances \| Maximum
Long-term debt
Interest rate (as a percent)	2.18%	1.32%

Borrowings - Senior notes and Subordinate notes (Details) - USD ($) $ in Millions	May 25, 2017	Sep. 30, 2018	Dec. 31, 2017	Jul. 02, 2017
Long-term debt
Unamortized debt issuance cost		$ 5.6	$ 4.1
Senior notes
Long-term debt
Issuance of debt	$ 40.0
Interest rate (as a percent)	3.75%
Unamortized debt issuance cost		0.5	0.6
Subordinated debt
Long-term debt
Issuance of debt	$ 60.0
Interest rate (as a percent)	4.75%
Term of debt	5 years
Unamortized debt issuance cost		$ 0.9	$ 1.0
Three-month LIBOR \| Subordinated debt
Long-term debt
Floating interest rate margin (as a percent)	2.919%
First Community \| Subordinated debt
Long-term debt
Assumed debt				$ 15.3
Debt instrument redeemed				9.8
Remaining assumed debt that was not redeemed				5.5
Purchase accounting premium				$ 0.3

Junior Subordinated Debt Owed to Unconsolidated Trusts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Junior subordinated debt owed to unconsolidated trusts
Junior subordinated debt owed to unconsolidated trusts	$ 71,118	$ 71,008
Trust Preferred Securities
Junior subordinated debt owed to unconsolidated trusts
Percentage limit on inclusion of qualifying trust preferred securities in Tier I Capital	25.00%
Trust preferred securities qualified as Tier I capital (as a percent)	100.00%
Maximum of holding companies assets retained	$ 15,000,000
Junior Subordinated Notes \| Trust Preferred Securities
Junior subordinated debt owed to unconsolidated trusts
Maximum period to defer payment of interest on the notes and, therefore, distributions on the trust preferred securities	5 years
Parent
Junior subordinated debt owed to unconsolidated trusts
Junior subordinated debt owed to unconsolidated trusts	$ 71,100	$ 71,000

Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net income per share calculations for basic and diluted methods
Net income available to common stockholders	$ 26,859	$ 18,784	$ 73,638	$ 50,433
Shares:
Weighted average common shares outstanding	48,892,000	45,324,000	48,828,000	40,669,000
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method (in shares)	355,000	440,000	388,000	400,000
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation	49,247,000	45,764,000	49,216,000	41,069,000
Basic earnings per common share (in dollars per share)	$ 0.55	$ 0.41	$ 1.51	$ 1.24
Diluted earnings per common share (in dollars per share)	$ 0.55	$ 0.41	$ 1.50	$ 1.23
Stock options
Anti-dilutive securities excluded from the calculation of common stock equivalents
Number of anti-dilutive securities (in shares)				78,540
RSU
Anti-dilutive securities excluded from the calculation of common stock equivalents
Number of anti-dilutive securities (in shares)			172,571
Warrants
Anti-dilutive securities excluded from the calculation of common stock equivalents
Number of anti-dilutive securities (in shares)			191,278	191,278

Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 01, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2015	Dec. 31, 2017	Feb. 03, 2015
Share-based Compensation
Number of shares held in treasury		325,272		325,272			500,638
Shares authorized for repurchase under stock repurchase plan								666,667
Purchase of treasury stock						333,333
Number of shares that may yet be purchased		333,334		333,334
Stock option awards
Shares
Outstanding at beginning of year (in shares)				213,428
Exercised (in shares)				(85,518)
Forfeited (in shares)				(14,035)
Expired (in shares)				(2,762)
Outstanding at end of year (in shares)		111,113		111,113
Exercisable at end of year (in shares)		73,469		73,469
Weighted-Average Exercise Price
Outstanding at beginning of year (in dollars per share)				$ 16.97
Exercised (in dollars per share)				13.90
Forfeited (in dollars per share)				21.81
Expired (in dollars per share)				16.15
Outstanding at end of year (in dollars per share)		$ 18.75		18.75
Exercisable at end of year (in dollars per share)		$ 16.30		$ 16.30
Weighted-Average Remaining Contractual Term
Outstanding at end of period				4 years 7 months 28 days
Exercisable at end of period				2 years 10 months 13 days
Additional disclosures
Compensation expense recognized		$ 0.1	$ 0.1	$ 0.2	$ 0.1
Unrecognized stock option expense		$ 0.2		$ 0.2
Period over which cost will be recognized				1 year 1 month 6 days
RSU
Share-based Compensation
Number of shares of common stock per award				1
Shares
Non-vested at beginning of year (in shares)				587,763
Reclass DSU to RSU				23,977
Granted (in shares)				172,571
Dividend equivalents earned (in shares)				11,870
Vested (in shares)				(104,512)
Forfeited (in shares)				(6,183)
Non-vested at end of year (in shares)		685,486		685,486
Outstanding at end of year (in shares)		685,486		685,486
Weighted-Average Grant Date Fair Value
Non-vested at beginning of year (in dollars per share)				$ 22.68
Reclass DSU to RSU (in dollars per share)				25.47
Granted (in dollars per share)				31.70
Dividend equivalents earned (in dollars per share)				31.05
Vested (in dollars per share)				16.40
Forfeited (in dollars per share)				24.84
Non-vested at end of year (in dollars per share)		$ 26.13		26.13
Outstanding at end of year (in dollars per share)		$ 26.13		$ 26.13
RSU \| Minimum
Share-based Compensation
Requisite service periods				1 year
RSU \| Maximum
Share-based Compensation
Requisite service periods				5 years
RSU \| Members of management
Weighted-Average Grant Date Fair Value
Granted (in dollars per share)	$ 31.70
Additional disclosures
Amount of compensation cost to be recognized	$ 5.2
Vesting percentage (as a percent)	100.00%
RSU \| Members of management \| Minimum
Additional disclosures
Period over which cost will be recognized	4 years
RSU \| Members of management \| Maximum
Additional disclosures
Period over which cost will be recognized	5 years
RSU \| Chairman
Weighted-Average Grant Date Fair Value
Granted (in dollars per share)	$ 31.70
Additional disclosures
Period over which cost will be recognized	5 years
Vesting percentage (as a percent)	100.00%
DSUs
Shares
Non-vested at beginning of year (in shares)				42,411
Reclass DSU to RSU				23,977
Granted (in shares)				20,500
Dividend equivalents earned (in shares)				1,669
Vested (in shares)				(20,103)
Non-vested at end of year (in shares)		20,500		20,500
Outstanding at end of year (in shares)		86,270		86,270
Weighted-Average Grant Date Fair Value
Non-vested at beginning of year (in dollars per share)				$ 25.47
Reclass DSU to RSU (in dollars per share)				25.47
Granted (in dollars per share)				31.70
Dividend equivalents earned (in dollars per share)				30.98
Vested (in dollars per share)				29.74
Non-vested at end of year (in dollars per share)		$ 27.97		27.97
Outstanding at end of year (in dollars per share)		$ 22.41		$ 22.41
DSUs \| Board of directors and advisory directors
Share-based Compensation
Number of shares of common stock per award				1
Settlement period				30 days
DSUs and Advisory DSUs \| Directors and Advisory Directors
Share-based Compensation
Requisite service periods	1 year
Weighted-Average Grant Date Fair Value
Granted (in dollars per share)	$ 31.70
Additional disclosures
Amount of compensation cost to be recognized	$ 0.6
RSUs and DSUs
Additional disclosures
Compensation expense recognized		$ 0.9	$ 0.7	$ 2.5	$ 1.9
Amount of compensation cost to be recognized		$ 12.0		$ 12.0
Period over which cost will be recognized				3 years 9 months 18 days
Employee stock purchase plan
Additional disclosures
Remaining shares available for issuance		75,674		75,674
First Community 2016 Equity Incentive Plan
Additional disclosures
Remaining shares available for issuance		305,781		305,781
First Community 2016 Equity Incentive Plan \| RSU \| Members of management
Shares
Granted (in shares)	12,545
First Community 2016 Equity Incentive Plan \| DSUs \| Directors
Shares
Granted (in shares)	1,500
2010 Equity Incentive Plan
Additional disclosures
Remaining shares available for issuance		740,943		740,943
2010 Equity Incentive Plan \| RSU \| Members of management
Shares
Granted (in shares)	152,926
2010 Equity Incentive Plan \| RSU \| Chairman
Shares
Granted (in shares)	7,100
Additional disclosures
Amount of compensation cost to be recognized	$ 0.2
2010 Equity Incentive Plan \| DSUs \| Directors
Shares
Granted (in shares)	17,500
2010 Equity Incentive Plan \| Advisory DSUs \| Advisory Directors
Shares
Granted (in shares)	1,500

Outstanding Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Credit Commitments and Contingencies
Liabilities for potential obligations under guarantees	$ 0	$ 0
Maximum
Credit Commitments and Contingencies
Term for guarantee	1 year
Commitments to extend credit
Credit Commitments and Contingencies
Financial instruments whose contract amounts represent credit risk	$ 1,296,406	1,300,294
Standby letters of credit
Credit Commitments and Contingencies
Financial instruments whose contract amounts represent credit risk	$ 33,244	$ 37,231

Capital (Details) - USD ($) $ in Thousands	Oct. 12, 2018	Jan. 01, 2019	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017	Jul. 31, 2013
Total Capital (to Risk Weighted Assets), Amount
Actual			$ 877,322		$ 837,183
Minimum Capital Requirement with Capital Buffer			603,990		547,265
Minimum To Be Well Capitalized			$ 611,636		$ 591,638
Total Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			14.34%		14.15%
Minimum Capital Requirement with Capital Buffer (as a percent)			9.875%		9.25%
Minimum To Be Well Capitalized (as a percent)			10.00%		10.00%
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual			$ 764,579		$ 718,101
Minimum Capital Requirement with Capital Buffer			481,663		428,937
Minimum To Be Well Capitalized			$ 489,309		$ 473,310
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			12.50%		12.14%
Minimum Capital Requirement with Capital Buffer (as a percent)			7.875%		7.25%
Minimum To Be Well Capitalized (as a percent)			8.00%		8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual			$ 690,579		$ 644,633
Minimum Capital Requirement with Capital Buffer			389,918		340,192
Minimum To Be Well Capitalized			$ 397,564		$ 384,565
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			11.29%		10.90%
Minimum Capital Requirement with Capital Buffer (as a percent)			6.375%		5.75%
Minimum To Be Well Capitalized (as a percent)			6.50%		6.50%
Tier 1 Capital (to Average Assets), Amount
Actual			$ 764,579		$ 718,101
Minimum Capital Requirement with Capital Buffer			$ 300,787		$ 293,588
Tier 1 Capital (to Average Assets), Ratio
Actual (as a percent)			10.17%		9.78%
Minimum Capital Requirement with Capital Buffer (as a percent)			4.00%		4.00%
Busey Bank
Total Capital (to Risk Weighted Assets), Amount
Actual			$ 865,523		$ 704,807
Minimum Capital Requirement with Capital Buffer			600,987		509,978
Minimum To Be Well Capitalized			$ 608,594		$ 551,327
Total Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			14.22%		12.78%
Minimum Capital Requirement with Capital Buffer (as a percent)			9.875%		9.25%
Minimum To Be Well Capitalized (as a percent)			10.00%		10.00%
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual			$ 812,780		$ 651,432
Minimum Capital Requirement with Capital Buffer			479,268		399,713
Minimum To Be Well Capitalized			$ 486,875		$ 441,062
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			13.36%		11.82%
Minimum Capital Requirement with Capital Buffer (as a percent)			7.875%		7.25%
Minimum To Be Well Capitalized (as a percent)			8.00%		8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual			$ 812,780		$ 651,432
Minimum Capital Requirement with Capital Buffer			387,979		317,013
Minimum To Be Well Capitalized			$ 395,586		$ 358,363
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)			13.36%		11.82%
Minimum Capital Requirement with Capital Buffer (as a percent)			6.375%		5.75%
Minimum To Be Well Capitalized (as a percent)			6.50%		6.50%
Tier 1 Capital (to Average Assets), Amount
Actual			$ 812,780		$ 651,432
Minimum Capital Requirement with Capital Buffer			299,786		265,847
Minimum To Be Well Capitalized			$ 374,733		$ 332,309
Tier 1 Capital (to Average Assets), Ratio
Actual (as a percent)			10.84%		9.80%
Minimum Capital Requirement with Capital Buffer (as a percent)			4.00%		4.00%
Minimum To Be Well Capitalized (as a percent)			5.00%		5.00%
South Side Bank
Total Capital (to Risk Weighted Assets), Amount
Actual					$ 84,914
Minimum Capital Requirement with Capital Buffer					34,744
Minimum To Be Well Capitalized					$ 37,561
Total Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)					22.61%
Minimum Capital Requirement with Capital Buffer (as a percent)					9.25%
Minimum To Be Well Capitalized (as a percent)					10.00%
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual					$ 84,707
Minimum Capital Requirement with Capital Buffer					27,232
Minimum To Be Well Capitalized					$ 30,049
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)					22.55%
Minimum Capital Requirement with Capital Buffer (as a percent)					7.25%
Minimum To Be Well Capitalized (as a percent)					8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual					$ 84,707
Minimum Capital Requirement with Capital Buffer					21,598
Minimum To Be Well Capitalized					$ 24,415
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual (as a percent)					22.55%
Minimum Capital Requirement with Capital Buffer (as a percent)					5.75%
Minimum To Be Well Capitalized (as a percent)					6.50%
Tier 1 Capital (to Average Assets), Amount
Actual					$ 84,707
Minimum Capital Requirement with Capital Buffer					26,571
Minimum To Be Well Capitalized					$ 33,214
Tier 1 Capital (to Average Assets), Ratio
Actual (as a percent)					12.75%
Minimum Capital Requirement with Capital Buffer (as a percent)					4.00%
Minimum To Be Well Capitalized (as a percent)					5.00%
Dodd-Frank Act ("Basel III Rules")
Regulatory Capital
Maximum consolidated assets of bank holding companies						$ 1,000,000
Maximum consolidated assets size of bank holding companies potentially unaffected by certain Tier 1 capital restrictions			$ 15,000,000
Common Equity Tier 1 capital conservation buffer of risk weighted assets			2.50%
Tier 1 Capital (to Average Assets), Ratio
Increase in minimum capital requirement ratios				1.875%
Forecast
Total Capital (to Risk Weighted Assets), Ratio
Minimum Capital Requirement with Capital Buffer (as a percent)		10.50%
Tier 1 Capital (to Risk Weighted Assets), Ratio
Minimum Capital Requirement with Capital Buffer (as a percent)		8.50%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Minimum Capital Requirement with Capital Buffer (as a percent)		7.00%
Busey Bank
Regulatory Capital
Distribution received through chartered amendment	$ 40,000

Operating Segments and Related Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Operating Segments and Related Information
Number of reportable segments \| segment			3
Number of operating segments \| segment			3
Goodwill	$ 267,685		$ 267,685		$ 269,346
Total Assets	7,889,385		7,889,385		7,860,640
Net interest income:	60,774	$ 55,941	180,903	$ 140,320
Non-interest income:	21,853	20,837	67,141	60,913
Non-interest expense:	45,929	46,939	144,274	121,326
Income before income taxes:	35,940	28,345	99,746	77,413
Net income:	26,859	18,784	73,638	50,433
Operating segments \| Banking
Operating Segments and Related Information
Goodwill	246,999		246,999		248,660
Total Assets	7,831,967		7,831,967		7,809,738
Net interest income:	62,578	57,589	186,103	143,496
Non-interest income:	11,196	12,338	33,827	33,550
Non-interest expense:	37,034	38,697	116,275	97,318
Income before income taxes:	35,982	29,736	99,631	77,234
Net income:	26,486	18,942	73,235	49,546
Operating segments \| Remittance Processing
Operating Segments and Related Information
Goodwill	8,992		8,992		8,992
Total Assets	37,809		37,809		34,646
Net interest income:	17	15	49	44
Non-interest income:	4,042	3,032	11,812	9,061
Non-interest expense:	2,718	2,190	7,808	6,476
Income before income taxes:	1,341	856	4,053	2,629
Net income:	957	505	2,896	1,567
Operating segments \| Wealth Management
Operating Segments and Related Information
Goodwill	11,694		11,694		11,694
Total Assets	33,543		33,543		32,077
Net interest income:	110	87	304	233
Non-interest income:	7,391	5,941	23,840	19,649
Non-interest expense:	4,307	3,896	13,921	11,840
Income before income taxes:	3,194	2,132	10,223	8,042
Net income:	2,280	1,237	7,332	4,760
Other
Operating Segments and Related Information
Total Assets	(13,934)		(13,934)		$ (15,821)
Net interest income:	(1,931)	(1,750)	(5,553)	(3,453)
Non-interest income:	(776)	(474)	(2,338)	(1,347)
Non-interest expense:	1,870	2,156	6,270	5,692
Income before income taxes:	(4,577)	(4,379)	(14,161)	(10,492)
Net income:	$ (2,864)	$ (1,900)	$ (9,825)	$ (5,440)

Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Interest Rate Lock Commitments
Derivative Financial Instruments
Aggregate notional amount	$ 50,400		$ 50,400		$ 51,700
Forward Sales Commitments
Derivative Financial Instruments
Aggregate notional amount	82,300		82,300		139,700
Interest rate lock commitments and forward sales commitments
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Net gains (losses)	80	$ 739	(273)	$ 1,527
Interest rate lock commitments and forward sales commitments \| Non-interest income
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross gains	641	3,822	2,396	12,629
Interest rate lock commitments and forward sales commitments \| Non-interest expense
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross (losses)	(561)	(3,083)	(2,669)	(11,102)
Interest rate lock commitments and forward sales commitments \| Other assets
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	322		322		675
Interest rate lock commitments and forward sales commitments \| Other liabilities
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	561		561		2,148
Interest rate swap
Derivative Financial Instruments
Aggregate notional amount	188,800		188,800		161,300
Variable rate, commercial loans that are supported by the interest rate swap contracts	94,400		94,400		80,700
Derivative cash pledged					2,000
Derivative securities pledged	300		300		400
Interest rate swap \| Non-interest income
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross gains	724	128	2,167	429
Interest rate swap \| Non-interest expense
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross (losses)	(724)	$ (128)	(2,167)	$ (429)
Interest rate swap \| Other assets
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	2,428		2,428		262
Interest rate swap \| Other liabilities
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	$ 2,428		$ 2,428		$ 262

Fair Value Measurements - General Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Financial assets and financial liabilities measured at fair value
Transfers between levels of fair value hierarchy	$ 0
Securities available for sale	863,381	$ 872,682
Securities equity investments	7,317	5,378
Loans held for sale	32,617	94,848
U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	59,854	60,348
Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Securities available for sale	89,666	103,665
Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Securities available for sale	241,925	280,199
Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	331,582	397,436
Corporate debt securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	140,354	31,034
Recurring basis
Financial assets and financial liabilities measured at fair value
Securities equity investments	7,317	5,378
Loans held for sale	32,617	94,848
Recurring basis \| Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets	2,750	937
Recurring basis \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities	2,989	2,410
Recurring basis \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	59,854	60,348
Recurring basis \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Securities available for sale	89,666	103,665
Recurring basis \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Securities available for sale	241,925	280,199
Recurring basis \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	331,582	397,436
Recurring basis \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	140,354	31,034
Recurring basis \| Level 1
Financial assets and financial liabilities measured at fair value
Securities equity investments	7,317	5,378
Recurring basis \| Level 2
Financial assets and financial liabilities measured at fair value
Loans held for sale	32,617	94,848
Recurring basis \| Level 2 \| Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets	2,750	937
Recurring basis \| Level 2 \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities	2,989	2,410
Recurring basis \| Level 2 \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	59,854	60,348
Recurring basis \| Level 2 \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Securities available for sale	89,666	103,665
Recurring basis \| Level 2 \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Securities available for sale	241,925	280,199
Recurring basis \| Level 2 \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	331,582	397,436
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Securities available for sale	$ 140,354	$ 31,034

Fair Value Measurements - Additional Quantitative Information (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Quantitative Information about Level 3 Fair Value Measurements
Impaired loans	$ 52,919	$ 41,837
Non-recurring basis
Quantitative Information about Level 3 Fair Value Measurements
Impaired loans	12,647	1,313
OREO	55
Bank property held for sale	3,711
Non-recurring basis \| Level 3
Quantitative Information about Level 3 Fair Value Measurements
Impaired loans	12,647	1,313
OREO	55
Bank property held for sale	3,711
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans
Quantitative Information about Level 3 Fair Value Measurements
Impaired loans	$ 12,647	$ 1,313
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Minimum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(2.30%)	(20.30%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Maximum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(100.00%)	(100.00%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Weighted Average
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(20.30%)	(30.80%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO
Quantitative Information about Level 3 Fair Value Measurements
OREO	$ 55
Appraisal adjustments (as a percent)		(100.00%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Minimum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(25.00%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Maximum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(100.00%)
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Weighted Average
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(65.00%)	(100.00%)
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale
Quantitative Information about Level 3 Fair Value Measurements
Bank property held for sale	$ 3,711
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Minimum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	0.00%
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Maximum
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(35.10%)
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Weighted Average
Quantitative Information about Level 3 Fair Value Measurements
Appraisal adjustments (as a percent)	(18.00%)

Fair Value Measurements - By Level of Valuation Inputs (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial assets:
Cash and cash equivalents	$ 160,652	$ 353,272
Securities held to maturity	611,302	441,052
Portfolio loans, net	5,570,998	5,465,918
Financial liabilities:
Short-term borrowings	200,000	220,000
Junior subordinated debt owed to unconsolidated trusts	71,118	71,008
Level 1 \| Carrying Amount
Financial assets:
Cash and cash equivalents	160,652	353,272
Level 1 \| Fair Value
Financial assets:
Cash and cash equivalents	160,652	353,272
Level 2 \| Carrying Amount
Financial assets:
Securities held to maturity	626,250	443,550
Accrued interest receivable	25,321	22,591
Financial liabilities:
Time deposits	1,552,283
Deposits		6,125,965
Securities sold under agreements to repurchase	255,906	304,566
Short-term borrowings	200,000	220,000
Long-term debt	50,000	50,000
Junior subordinated debt owed to unconsolidated trusts	71,118	71,008
Accrued interest payable	6,731	2,581
Level 2 \| Fair Value
Financial assets:
Securities held to maturity	611,302	441,052
Accrued interest receivable	25,321	22,591
Financial liabilities:
Time deposits	1,536,729
Deposits		6,119,135
Securities sold under agreements to repurchase	255,906	304,566
Short-term borrowings	200,000	220,000
Long-term debt	49,562	50,000
Junior subordinated debt owed to unconsolidated trusts	71,118	71,008
Accrued interest payable	6,731	2,581
Level 3 \| Carrying Amount
Financial assets:
Portfolio loans, net	5,570,998	5,465,918
Mortgage servicing rights	3,456	3,680
Other servicing rights	616	280
Level 3 \| Fair Value
Financial assets:
Portfolio loans, net	5,424,280	5,361,406
Mortgage servicing rights	11,147	8,635
Other servicing rights	1,236	901
Level 3 \| Senior notes \| Carrying Amount
Financial liabilities:
Long-term debt	39,505	39,404
Level 3 \| Senior notes \| Fair Value
Financial liabilities:
Long-term debt	38,382	39,104
Level 3 \| Subordinated debt \| Carrying Amount
Financial liabilities:
Long-term debt	59,121	64,715
Level 3 \| Subordinated debt \| Fair Value
Financial liabilities:
Long-term debt	$ 57,470	$ 64,350

Liability for Loans Sold (Details) - USD ($) $ in Millions	9 Months Ended
Liability for Loans Sold (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Period after origination for an event of default that may require loan repurchase or reimbursement	90 days
Period after breach of contractual representations or warranties made at the time of sale that are not remedied after the Company receives notice that may require possible loan repurchase or loan reimbursement	90 days
The period after origination for profit refund if the borrower pays off loan	120 days
Other liabilities
Liability for loans sold	$ 2.0	$ 2.1