10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35654

NATIONAL BANK HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	27-0563799
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7800 East Orchard Road, Suite 300, Greenwood Village, Colorado 80111

(Address of principal executive offices) (Zip Code)

Registrant’s telephone, including area code:

(720) 529-3336

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock, Par Value $0.01	New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(do not check if a smaller reporting company)	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

As of June 30, 2017, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $866,000,000 based on the closing sale price as reported on the New York Stock Exchange.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of February 22, 2018, NBHC had outstanding 30,312,222 shares of Class A voting common stock with $0.01 par value per share, excluding 160,510 shares of restricted Class A common stock issued but not yet vested.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement for its 2018 Annual Meeting of Shareholders to be filed within 120 days of December 31, 2017 will be incorporated by reference into Part III of this form 10-K.

INDEX

			Page
Cautionary Notes Regarding Forward Looking Statements			3
PART I	Item 1.	Business	5
	Item 1A.	Risk Factors	18
	Item 1B.	Unresolved Staff Comments	30
	Item 2.	Properties	30
	Item 3.	Legal Proceedings	30
	Item 4.	Mine Safety Disclosures	30
PART II	Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	31
	Item 6.	Selected Financial Data	34
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	72
	Item 8.	Financial Statements and Supplementary Data	73
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	123
	Item 9A.	Controls and Procedures	123
	Item 9B.	Other Information	125
PART III	Item 10.	Directors, Executive Officers and Corporate Governance	125
	Item 11.	Executive Compensation	125
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	125
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	125
	Item 14.	Principal Accountant Fees and Services	125
PART IV	Item 15.	Exhibits and Financial Statement Schedules	126
Signatures			129

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties. We have based these statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, liquidity, results of operations, business strategy and growth prospects.

Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements and, therefore, you are cautioned not to place undue reliance on such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

       our ability to execute our business strategy, as well as changes in our business strategy or development plans;

       business and economic conditions generally and in the financial services industry;

       economic, market, operational, liquidity, credit and interest rate risks associated with our business;

       effects of any changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board;

       changes imposed by regulatory agencies to increase our capital to a level greater than the current level required for well-capitalized financial institutions;

       effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations;

       changes in the economy or supply-demand imbalances affecting local real estate values;

       changes in consumer spending, borrowings and savings habits;

       with respect to our mortgage business, our inability to negotiate our fees with Fannie Mae, Freddie Mac, Ginnie Mae or other investors for the purchase of our loans, our obligation to indemnify purchasers or to repurchase the related loans if they fail to meet certain criteria, or higher rate of delinquencies and defaults as a result of the geographic concentration of our servicing portfolio;

       our ability to identify potential candidates for, obtain regulatory approval for, and consummate, acquisitions or consolidations of financial institutions on attractive terms, or at all;

       our ability to integrate acquisitions or consolidations and to achieve synergies, operating efficiencies and/or other expected benefits within expected time-frames, or at all, or within expected cost projections, and to preserve the goodwill of acquired financial institutions;

       our ability to realize the anticipated benefits from enhancements or updates to our core operating systems from time to time without significant change in our client service or risk to our control environment; 

       our dependence on information technology and telecommunications systems of third party service providers and the risk of system failures, interruptions or breaches of security, including those that could result in disclosure or misuse of confidential or proprietary client or other information;

       our ability to achieve organic loan and deposit growth and the composition of such growth;

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       changes in sources and uses of funds, including loans, deposits and borrowings;

       increased competition in the financial services industry, nationally, regionally or locally, resulting in, among other things, lower returns;

       continued consolidation in the financial services industry;

       our ability to maintain or increase market share and control expenses;

       the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters;

       the trading price of shares of the Company's stock;

       the effects of tax legislation or challenges to our tax position;

       our ability to realize deferred tax assets or the need for a valuation allowance, or the effects of changes in tax laws on our deferred tax assets;

       costs and effects of changes in laws and regulations and of other legal and regulatory developments, including, but not limited to, changes in regulation that affect the fees that we charge, the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations, reviews or other inquiries; and changes in regulations that apply to us as a Colorado state-chartered bank;

       technological changes;

       the timely development and acceptance of new products and services and perceived overall value of these products and services by our clients;

       changes in our management personnel and our continued ability to hire and retain qualified personnel;

        ability to implement and/or improve operational management and other internal risk controls and processes and our reporting system and procedures;

       regulatory limitations on dividends from our bank subsidiary;

       changes in estimates of future loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;

       widespread natural and other disasters, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically;

       a cyber-security incident, data breach or a failure of a key information technology system;

       impact of reputational risk on such matters as business generation and retention;

       other risks and uncertainties listed from time to time in the Company’s reports and documents filed with the Securities and Exchange Commission; and

       our success at managing the risks involved in the foregoing items.

Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

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PART I: FINANCIAL INFORMATION

Item 1.       BUSINESS.

Summary

National Bank Holdings Corporation ("NBHC" or the "Company") is a bank holding company that was incorporated in the State of Delaware in 2009 and is headquartered immediately south of Denver, in Greenwood Village, Colorado. Our primary operations are conducted through our wholly owned subsidiary, NBH Bank, referred to as the "Bank", or "NBH Bank", through which we provide a variety of banking products to both commercial and consumer clients. We service our clients through a network of 85 banking centers as of December 31, 2017, with the majority of those banking centers located in Colorado and the greater Kansas City region, and through online and mobile banking products and services. The Peoples, Inc. acquisition adds an additional 19 banking centers, with the majority of those banking centers located in Colorado and the greater Kansas City region. As of December 31, 2017, we had $4.8 billion in assets, $3.2 billion in loans, $4.0 billion in deposits and $0.5 billion in shareholders’ equity.    

The Company was formed through a private offering of our common stock in 2009. As part of our goal of becoming a leading regional community bank holding company, we are pursuing a strategy of organic growth through strong banking relationships with small and medium-sized businesses and consumers in our markets, complemented by selective acquisitions of financial institutions and other complementary businesses. Our long-term business model utilizes our organic development infrastructure, low-risk balance sheet, continuous operational development and a disciplined acquisition strategy to create value and provide attractive returns.

On October 9, 2015, we announced the termination of the operating agreement between our bank subsidiary, NBH Bank, N.A., and its primary regulator, the OCC. On December 31, 2015, NBH Bank, N.A. converted into a Colorado state-chartered bank while maintaining membership with the Federal Reserve Bank of Kansas City and we changed the legal name of NBH Bank, N.A. to NBH Bank. Through NBH Bank, we operate under the following brand names: Bank Midwest in Kansas and Missouri; Community Banks of Colorado in Colorado; and Hillcrest Bank in New Mexico and Texas. We believe that conducting our banking operations under a single state charter streamlines our operations and enables us to more effectively and efficiently execute our growth strategy.

Our Acquisitions

In October 2010, we acquired the failed Hillcrest Bank from the FDIC and began banking operations. As of December 31, 2017, we have completed five bank acquisitions, three of which were FDIC-assisted. All loss share agreements associated with the FDIC-assisted acquisitions were terminated on November 5, 2015. We have transformed these five banks into one collective banking operation with strong organic growth, prudent underwriting, and meaningful market share with continued opportunity for expansion. We believe that we have established critical mass in our current markets and have structured acquisitions that limit our credit risk, which positions us for attractive returns.

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The following table summarizes certain highlights of our five historic acquisitions, including deposits and assets at fair value as of each acquisition date:

			Community Banks
	Pine River		of Colorado		Bank of Choice		Bank Midwest		Hillcrest Bank
Date acquired		August 1, 2015		October 21, 2011		July 22, 2011		December 10, 2010		October 22, 2010
FDIC-assisted		No		Yes		Yes		No		Yes
Loss share		No		Yes(1)		No		No		Yes(2)
Banking centers(3)		4		40		16		39		9 (and 32 retirement centers)
Deposits (millions)		$ 130		$ 1,195		$ 760		$ 2,386		$ 1,234
Assets (millions)		$ 142		$ 1,228		$ 950		$ 2,426		$ 1,377
Primary Market		Colorado		Colorado		Colorado		Greater Kansas City Region		Greater Kansas City Region

(1)	Commercial loss-share agreement (terminated November 5, 2015).
(2)	Single Family loss-share agreement and Commercial Shared-Loss Agreement (terminated November 5, 2015).
(3)	During 2013, four California banking centers acquired with the Community Banks of Colorado acquisition and 32 retirement centers acquired with the Hillcrest Bank acquisition were closed. During 2015, three banking centers were consolidated in our Bank Midwest network. During 2016, seven banking centers were consolidated in our Community Banks of Colorado network. During 2017, six banking centers were consolidated or sold in our Bank Midwest and Community Banks of Colorado networks.

Peoples Acquisition

During the second quarter of 2017, the Company announced the acquisition of Peoples, Inc. (“Peoples”), the bank holding company of Colorado-based Peoples National Bank and Kansas-based Peoples Bank. The acquisition closed on January 1, 2018 and strengthens the NBH franchise in the attractive and growing markets along the Colorado Front Range, the greater Kansas City region, including expanding our existing Overland Park, Kansas market and extending into the college town markets of Lawrence and Ottawa, Kansas, and expands the NBH franchise into New Mexico. The transaction is valued at $146.4 million, including $36.2 million of cash consideration, and adds an estimated $868 million in assets, $544 million in loans held for investment and $730 million of low cost deposits. Peoples’ complementary, franchise-centric, retail mortgage platform adds significant capabilities with over $1 billion in mortgage production historically and primarily serving NBH’s markets with additional mortgage offices in Arizona, California, Nevada and Utah. The acquisition adds a solid core deposit base, expanding into New Mexico, with cost of deposits significantly below peers at 0.10%. The system conversion was completed during the first quarter of 2018. Refer to note 24 – Subsequent Events of our consolidated financial statements for additional details of the acquisition. 

All of our acquisitions were accounted for under the acquisition method of accounting, and accordingly, all assets acquired and liabilities assumed were recorded at their respective acquisition date fair values and the fair value discounts/premiums on loans are being accreted over the lives of the loans.

Our Market Area

Our core markets are broadly defined as Colorado and the greater Kansas City region. We are the fifth largest banking center network among Colorado-based banks and the fifth largest banking center network in the greater Kansas City MSA ranked by deposits as of June 30, 2017 (the last date as of which data are available), according to S&P Global. Other major MSAs in which we operate include Dallas-Fort Worth-Arlington, Texas and Austin-Round Rock, Texas.

We believe that our established presence positions us well for growth opportunities in our markets. An integral component of our foundation and growth strategy has been to capitalize on market opportunities and acquire financial services franchises. Our primary focus has been on markets that we believe are characterized by some or all of the following: (i) attractive demographics with household income and population growth above the national average; (ii) concentration of business activity; (iii) high quality deposit bases; (iv) an advantageous competitive landscape that provides opportunity to achieve meaningful market presence; (v) consolidation opportunities as well as potential for add-on transactions; and (vi) markets sizeable enough to support our long-term organic growth objectives.

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The table below describes certain key demographic statistics regarding our markets:

									Top 3
									competitor
			# of				Median		combined
	Deposits		businesses	Population	Unemployment	Population	household		deposit
	(billions)		(thousands)	(millions)	rate(1)	growth(2)	income		market share
Denver, CO	$	78.5	114.9	2.9	2.8%	15.3%	$	75,489	55%
Front Range, CO(3)		107.8	182.7	4.6	2.8%	15.2%		73,719	53%
Kansas City, MO-KS MSA		51.0	76.0	2.1	3.2%	6.0%		65,702	43%
U.S.					3.9%	5.8%		61,045	55%(4)

(1)	Unemployment data is as of November 30, 2017.
(2)	For the period 2010 through 2017.
(3)	CO Front Range is a population weighted average of the following Colorado MSAs: Denver, Boulder, Colorado Springs, Fort Collins and Greeley.
(4)	Based on U.S. Top 20 MSAs (determined by population).

Source: S&P Global as of December 31, 2017, except Deposits and Top 3 Competitor Combined Deposit Market Shares, which reflects data as of June 30, 2017.

Our Business Strategy

As part of our goal of becoming a leading regional community bank holding company, we seek to continue to generate strong organic growth, as well as pursue selective acquisitions of financial institutions and other complementary businesses. Our focus is on building organic growth through strong banking relationships with small- and medium-sized businesses and consumers in our primary markets, while maintaining a low-risk profile designed to generate reliable income streams and attractive returns. We view our core market areas as the greater Kansas City region and Colorado. The key components of our strategic plan are:

· Focus on client-centered, relationship-driven banking strategy. Our small business and commercial bankers focus on small and medium-sized businesses with an advisory approach that emphasizes understanding the client’s business and offering a complete array of loan, deposit and treasury management products and services. Our business and commercial bankers are supported by treasury management teams in each of their markets, which allows us to more effectively deliver a comprehensive suite of products and services to our business clients and further deepen our banking relationships. Our consumer bankers focus on knowing their clients in order to best meet their financial needs, offering a full complement of loan, deposit, online and mobile banking solutions.

· Expansion of commercial banking, business banking and specialty businesses.We have made significant investments in our commercial relationship managers, as well as developed significant capabilities across our business banking and several specialty commercial banking offerings. Our strategy is to originate a high-quality loan portfolio that is diversified across industries and granular in loan size. We have preferred lender status with the Small Business Administration (“SBA”) providing a leveraged platform for growth in the business lending segment. We believe we are well-positioned to leverage our operating and risk management infrastructure through organic growth and we intend to continue to add or repurpose our commercial relationship managers to higher growth opportunities and markets in order to drive increased profitability.

· Expansion through organic growth and competitive product offerings.We believe that our focus on serving consumers and small- to medium-sized businesses, coupled with our competitive product offerings, will provide an expanded revenue base and new sources of fee income. We conduct regular market and competitive analysis to determine which products and services are best suited for our clients. Our teams also continue to pursue opportunities to deepen client relationships, which we believe will further increase our organic loan origination volumes and attract new transaction accounts that offer lower cost of funds and higher fee generating activity.

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· Continue to strengthen profitability through organic growth and operating efficiencies.We continue to utilize our comprehensive underwriting and risk management processes under one operating platform while maintaining local branding, leadership and decision making, which allows us to support growth and realize operating efficiencies throughout our enterprise. The actions taken to consolidate banking centers in conjunction with other expense management initiatives have resulted in significant cost savings. We believe that we have the infrastructure in place to support our future revenue growth without causing non-interest expenses to increase by a corresponding amount.  Our growth strategy is focused on organic initiatives in order to accelerate our growth in profitability. Key priorities to strengthen profitability include the continued ramp-up of loan production, growing low-cost core deposits, implementing additional fee-based business initiatives and further enhancing operational efficiencies.   

· Maintain conservative risk profile and sound risk management practices. Strong risk management is an important element of our operating philosophy. We maintain a conservative risk culture with adherence to mature and seasoned policies across all areas of the organization. We implement self-imposed concentration limits on our loan portfolio to ensure a granular and diverse loan portfolio and protect against downside risk to any particular industry or real estate sector. Our risk management approach seeks to identify, assess and mitigate risk and minimize any resulting losses. We have implemented processes to identify measure, monitor, and report and analyze the types of risk to which we are subject. We believe our risk management policies establish appropriate limitations that allow for the prudent oversight of such risks that include, but are not limited to the following: credit, liquidity, market, operational, legal and compliance, reputational, and strategic and business risk. 

· Pursue disciplined acquisitions. We expect that acquisitions will continue to be a component of our growth strategy and we intend to carefully select acquisition opportunities that we believe have stable core franchises, have significant local market share or will add asset generation capabilities or fee income streams while structuring the transactions to limit risk. Further, we seek transactions that offer opportunities for clear financial benefits with valuations that have acceptable levels of earnings accretion, tangible book value dilution/earn-back, and internal rates of return. We seek to acquire financial services franchises in markets that exhibit attractive demographic attributes and we believe that our focus on attractive markets will provide long-term opportunities for organic growth. Our focus is on our primary markets of Colorado, Missouri and Kansas, including teams, asset portfolios, specialty commercial finance businesses, and whole banks. 

We believe our strategy of strong organic growth through the retention, expansion and development of client-centered relationships and growth through selective acquisitions in attractive markets provides flexibility regardless of economic conditions. We also believe that our established platform for assessing, executing and integrating acquisitions creates opportunities in an economic downturn while the combination of attractive market factors, franchise scale in our targeted markets and our relationship-centered banking focus creates opportunities in an improving economic environment.

Products and Services

Through NBH Bank, our primary business is to offer a full range of traditional banking products and financial services to both our commercial, business and consumer clients, who are predominantly located in Colorado, the greater Kansas City region, New Mexico and Texas. We conduct our banking business through 85 banking centers, with 44 of those located in Colorado, 39 in Kansas and Missouri, and two in Texas as of December 31, 2017. Our distribution network also includes 106 ATMs as well as fully integrated online banking and mobile banking services. The Peoples acquisition adds 19 banking centers, with seven located in Kansas, six located in Colorado, and six located in New Mexico, and adds an additional 17 ATMs. We offer a high level of personalized service to our clients through our relationship managers and banking center associates. We believe that a banking relationship that includes multiple services, such as loan and deposit services, online and mobile banking solutions and treasury management products and services, is the key to profitable and long-lasting client relationships and that our local focus and decision making provide us with a competitive advantage over banks that do not have these attributes.  

Our primary strategic objective is to serve small- to medium-sized businesses in our markets with a variety of unique and useful services, including a full array of banking products, while maintaining a strong and disciplined credit culture and delivering excellent client service. We offer a variety of products and services that are focused on the following areas:

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Commercial and Specialty Banking

Our commercial bankers focus on small- and medium-sized businesses with an advisory approach that emphasizes understanding the client’s business and offering a complete suite of loan, deposit and treasury management products and services. We have invested significantly in our commercial banking capabilities, attracting experienced commercial bankers from competing institutions in our markets, which have resulted in significant growth in our originated loan portfolio. Our commercial relationship managers offer a wide range of commercial loan products, including:

Commercial and Industrial Loans—We originate commercial and industrial loans and leases, including working capital loans, equipment loans, lender finance loans, agriculture loans, government and non-profit loans, owner occupied commercial real estate loans and other commercial loans and leases. The terms of these loans vary by purpose and by type of underlying collateral, if any.

Working capital loans generally have terms of up to one year, are usually secured by accounts receivable and inventory and carry the personal guarantees of the principals of the business. Equipment loans are generally secured by the financed equipment at advance rates that we believe are appropriate for the equipment type. In the case of owner-occupied commercial real estate loans, we are usually the primary provider of financial services for the company and/or the principals and the primary source of repayment is through the cash flows generated by the borrowers’ business operations. Owner-occupied commercial real estate loans are typically secured by a first lien mortgage on real property plus assignments of all leases related to the properties. Underwriting guidelines generally require borrowers to contribute cash equity that results in an 80% or less loan-to-value ratio on owner-occupied properties. As of December 31, 2017, substantially all of our commercial and industrial loans were secured.

Non-Owner Occupied Commercial Real Estate Loans—Non-owner occupied commercial real estate loans (“CRE”) consist of loans to finance the purchase of commercial real estate, loans to support working capital needs of businesses that are secured by commercial real estate and construction and development loans. Our non-owner occupied CRE loans include loans on multi-family construction properties, commercial properties such as office buildings, retail centers, or free-standing commercial properties, multi-family and investor properties and raw land development loans.

Non-owner occupied CRE loans are typically secured by a first lien mortgage on multi-family, office, warehouse, hotel or retail property plus assignments of all leases related to the properties. Underwriting guidelines generally require borrowers to contribute cash equity that results in a 75% or less loan-to-value ratio.

We seek to reduce the risks associated with commercial mortgage lending by focusing our lending in our primary markets. Although non-owner occupied CRE is not a primary focus of our lending strategy, we have developed teams in each our markets of dedicated CRE bankers who possess the depth and breadth of both market knowledge and industry expertise, which serves to further mitigate risk of this product type.

Small Business Administration Loans—We offer a range of U.S. Small Business Administration, or SBA loans, to support manufacturers, distributors and service providers targeted to small businesses and entrepreneurs seeking growth capital, working capital, or other capital investments as an SBA Preferred Lender Provider. As a Preferred Lender Provider of the SBA, we are able to expedite SBA loan approval, closing, and servicing functions through delegated authority to underwrite and approve loans on behalf of the SBA. We utilize the SBA 7(a) loan, SBA 504 loan, SBA Express loan, and CAP Line loan programs.

Commercial Deposit Products (including business online and mobile banking)—Our commercial bankers are focused on providing value-added deposit products to our clients that optimizes their cash management program. We are focused on full-relationship banking, including banking core operating accounts and ancillary accounts. We also provide our commercial clients with money market accounts and short-term repurchase reserve accounts depending on their individual needs. In addition, we provide a wide array of treasury management solutions to our clients, including: business online and mobile banking, commercial credit card services, wire transfers, automated clearing house services, electronic bill payment, lock box services, remote deposit capture services, merchant processing services, cash vault, controlled disbursements, fraud prevention services through positive pay and other auxiliary services (including account reconciliation, collections, repurchase accounts, zero balance accounts and sweep accounts).

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Business and Consumer Banking 

Our business and consumer bankers focus on knowing their clients in order to best meet their financial needs, offering a full complement of loan, deposit and online and mobile banking solutions. We strive to do business in the areas served by our banking centers, which is also where our marketing is focused, and the vast majority of our new loan and deposit clients are located in existing market areas.

All of our newly originated consumer loans are on a direct to consumer basis. We offer a variety of business and consumer loans, including:  

Business Loans—Business loans consist of term loans, line of credit, and real estate secured loans. The terms of these loans vary by purpose and by type of underlying collateral, if any. Business loans generally require LTV ratios of not more than 75 percent. Business loans also assist in the growth of our deposits because many business loan borrowers establish noninterest-bearing and interest-bearing demand deposit accounts and treasury management relationships with us. Those deposit accounts help us to reduce our overall cost of funds and those treasury management relationships provide us with a source of non-interest income.

Residential Real Estate Loans—Residential real estate loans consist of loans secured by the primary or secondary residence of the borrower. These loans consist of closed loans, which are typically amortizing over a 10 to 30-year term. Our loan-to-value (LTV) benchmark for these loans will generally be below 80% at inception unless related to certain internal or government programs where higher LTV’s may be warranted, along with satisfactory debt-to-income ratios. We do not originate or purchase negatively amortizing or sub-prime residential loans. These residential real estate loans are generally originated under terms and conditions consistent with secondary market guidelines. Some of these loans will be placed in the Bank’s loan portfolio; however, a majority are sold in the secondary market and provide a significant source of fee income. The mortgage operation acquired from Peoples adds significant residential banking products, servicing capabilities and residential loan origination channels. In addition to the referral business through our existing consumer client base as we establish full banking relationships we have a dedicated team of mortgage bankers who focus origination efforts primarily on new purchase activity and secondarily on refinance activity. We also offer open- and closed-ended home equity loans, which are loans generally secured by second lien positions on residential real estate, and residential construction loans to consumers and builders for the construction of residential real estate.

Consumer Loans—Consumer loans are structured as small personal lines of credit and term loans, with the latter generally bearing interest at a higher rate and having a shorter term than residential mortgage loans. Consumer loans are both secured (for example by deposit accounts, brokerage accounts or automobiles) and unsecured and carry either a fixed rate or variable rate. Examples of our consumer loans include home improvement loans not secured by real estate, new and used automobile loans and personal lines of credit.

Deposit Products (including online and mobile banking)—We offer a variety of deposit products to our clients, including checking accounts, savings accounts, money market accounts and other deposit accounts, including fixed-rate, fixed maturity time deposits ranging in terms from 30 days to five years, and individual retirement accounts. We view deposits as an important part of the overall client relationship and believe they provide opportunities to cross-sell other products and services. We intend to continue our efforts to attract low-cost transaction deposits from our client relationships. Consumer deposit flows are significantly influenced by general and local economic conditions, changes in prevailing interest rates, internal pricing decisions and competition. Our deposits are primarily obtained from areas surrounding our banking centers. In order to attract and retain deposits, we rely on providing competitively priced high-quality service and introducing new products and services that meet our clients' needs.

We also offer comprehensive, user-friendly mobile and online banking platforms allowing our clients to pay bills, check statements, deposit checks and transfer funds, amongst other features, online or on-the-go.

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Lending Activities

Our loan portfolio includes commercial and industrial loans, commercial real estate loans, residential real estate loans, business loans and consumer loans. The principal risk associated with each category of loans we make is the creditworthiness of the borrower. Borrower creditworthiness is affected by general economic conditions and the attributes of the borrower’s market or industry segment. Attributes of the relevant business market or industry segment include the economic and competitive environment, changes to supply or demand, threat of substitutes and barriers to entry and exit. In our credit underwriting process, we carefully evaluate the borrower’s industry, operating performance, liquidity and financial condition. We underwrite credits based on multiple repayment sources, including operating cash flow, liquidation of collateral and guarantor support, where appropriate. We closely monitor the operating performance, liquidity and financial condition of borrowers through analysis of periodic financial statements and meetings with the borrower’s management. As part of our credit underwriting process, we also review the borrower’s total debt obligations on a global basis. Our credit policy requires that key risks be identified and measured, documented and mitigated, to the extent possible, to seek to ensure the soundness of our loan portfolio.

Our credit policy also provides detailed procedures for making loans to individual and business clients along with the regulatory requirements to ensure that all loan applications are evaluated subject to our fair lending policy. Our credit policy addresses the common credit standards for making loans to clients, the credit analysis and financial statement requirements, the collateral requirements, including insurance coverage where appropriate, as well as the documentation required. Our ability to analyze a borrower’s current financial health and credit history, as well as the value of collateral as a secondary source of repayment, when applicable, are significant factors in determining the creditworthiness of loans to clients. We require various levels of internal approvals based on the characteristics of such loans, including the size, nature of the exposure and type of collateral, if any. We believe that the procedures required by our credit policies enhance internal responsibility and accountability for underwriting decisions and permit us to monitor the performance of credit decisioning. An integral element of our credit risk management strategy is the establishment and adherence to concentration limits for our portfolio. We have established concentration limits that apply to our portfolio based on product types such as commercial real estate, consumer lending, and various categories of commercial and industrial lending. For more detail on our credit policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition-Asset Quality.”

Competition

The banking landscape in our primary markets of Colorado, Kansas, Missouri and Texas is highly competitive and quite fragmented, with many small banks having limited market share while the large out-of-state national and super-regional banks control the majority of deposits and profitable banking relationships. We compete actively with national, regional and local financial services providers, including: banks, thrifts, credit unions, mortgage companies, finance companies and financial technology (“FinTech”) companies.

Competition among providers of financial products and services continues to increase, with consumers having the opportunity to select from a variety of traditional brick and mortar banks and nontraditional alternatives, such as online banks and FinTech companies. Competition among providers is based on many factors. The primary factors driving commercial and consumer competition for loans and deposits are interest rates, the fees charged, client service levels and the range of products and services offered. In addition, other competitive factors include the location and hours of our banking centers, the client service orientation of our associates and the availability of digital banking products and services. We believe the most important of these competitive factors that determine our success are our consumer bankers’ focus on knowing their individual clients in order to best meet their financial needs and our business and commercial bankers’ focus on small and medium-sized businesses with an advisory approach that emphasizes understanding the client’s business and offering a complete array of loan, deposit and treasury management products and services through our banking centers and our digital banking platform.

We recognize that there are banks and other financial services companies with which we compete that have greater financial resources, access to more capital and higher lending capacity than we do and offer a wider range of deposit and lending instruments than we do. However, given our existing capital base, we expect to be able to meet the majority of small to medium-sized business and consumer credit and depository service needs.

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Associates

At December 31, 2017, we had 899 full-time associates and 64 part-time associates. 

SUPERVISION AND REGULATION

The U.S. banking industry is highly regulated under federal and state law. Banking laws, regulations, and policies affect the operations of the Company and its subsidiary. Investors should understand that the primary objective of the U.S. bank regulatory regime is the protection of depositors, the Depositors Insurance Fund (“DIF”), and the banking system as a whole, not the protection of the Company’s shareholders.

As a bank holding company, we are subject to inspection, examination, supervision and regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Our bank subsidiary, NBH Bank, is a Colorado state-chartered bank and a member of the Federal Reserve Bank of Kansas City. As such, NBH Bank is subject to examination, supervision and regulation by both the Colorado Division of Banking and the Federal Reserve. In addition, we expect that any additional businesses that we may invest in or acquire will be regulated by various state and/or federal banking regulators.

Banking statutes and regulations are subject to continual review and revision by Congress, state legislatures and federal and state regulatory agencies. A change in such statutes or regulations, including changes in how they are interpreted or implemented, could have a material effect on our business. In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters and similar written guidance pursuant to such laws and regulations, which are binding on us and our subsidiaries.

Banking statutes, regulations and policies could restrict our ability to diversify into other areas of financial services, acquire depository institutions and make distributions or pay dividends on our equity securities. They may also require us to provide financial support to any bank that we control, maintain capital balances in excess of those desired by management and pay higher deposit insurance premiums as a result of a general deterioration in the financial condition of NBH Bank, or other depository institutions we control.

The description below summarizes certain elements of the applicable bank regulatory framework. This description is not intended to describe all laws and regulations applicable to us and our subsidiaries. The description is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretive letters and other written guidance that are described.

National Bank Holdings Corporation as a Bank Holding Company

As a bank holding company, we are subject to regulation under the Bank Holding Company Act (“BHCA”) and to supervision, examination, and enforcement by the Federal Reserve. Federal Reserve jurisdiction also extends to any company that we may directly or indirectly control, such as non-bank subsidiaries and other companies in which we have a controlling interest. While subjecting us to supervision and regulation, we believe that our status as a bank holding company (as opposed to being a non-controlling investor) broadens the investment opportunities available to us among public and private financial institutions.

The BHCA generally prohibits a bank holding company from engaging, directly or indirectly, in activities other than banking or managing or controlling banks, except for activities determined by the Federal Reserve to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Provisions of the Gramm-Leach-Bliley Financial Modernization Act of 1999 (the “GLB Act”) expanded the permissible activities of a bank holding company that qualifies as a financial holding company. Under the regulations implementing the GLB Act, a financial holding company may engage in additional activities that are financial in nature or incidental or complementary to financial activity. Those activities include, among other activities, certain insurance and securities activities. We have not yet determined whether it would be appropriate or advisable in the future to become a financial holding company.

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NBH Bank as a Colorado State-Chartered Bank

On December 31, 2015, our bank subsidiary, NBH Bank, N.A., converted to a Colorado state-chartered bank operating under the name of NBH Bank. NBH Bank is also a member of the Federal Reserve Bank of Kansas City. As such, NBH Bank is subject to examination, supervision and regulation by both the Colorado Division of Banking and the Federal Reserve. NBH Bank’s deposits are insured by the FDIC through the DIF, in the manner and to the extent provided by law. As an insured bank, NBH Bank is subject to the provisions of the Federal Deposit Insurance Act, as amended (the “FDI Act”), and the FDIC’s implementing regulations thereunder, and may also be subject to supervision and examination by the FDIC under certain circumstances.

Under the FDIC Improvement Act of 1991 (“FDICIA”), NBH Bank must submit financial statements prepared in accordance with GAAP and management reports signed by the Company’s and NBH Bank’s chief executive officer and chief accounting or financial officer concerning management’s responsibility for the financial statements, an assessment of internal controls, and an assessment of NBH Bank’s compliance with various banking laws and FDIC and other banking regulations. In addition, we must submit annual audit reports to federal regulators prepared by independent auditors. As allowed by regulations, we may use our audit report prepared for the Company to satisfy this requirement. We must provide our auditors with examination reports, supervisory agreements and reports of enforcement actions. The auditors must also attest to and report on the statements of management relating to the internal controls. FDICIA also requires that NBH Bank form an independent audit committee consisting of outside directors only, or that the Company’s audit committee be entirely independent.

Broad Supervision, Examination and Enforcement Powers

The Federal Reserve, the FDIC and state bank regulators have broad regulatory, examination and enforcement authority over bank holding companies and banks, as applicable. Bank regulators regularly examine the operations of banks and bank holding companies. In addition, banks and bank holding companies are subject to periodic reporting and filing requirements.

Bank regulators have various remedies available if they determine that a banking organization has violated any law or regulation, that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of a banking organization’s operations are unsatisfactory, or that the banking organization is operating in an unsafe or unsound manner. The bank regulators have the power to, among other things: enjoin “unsafe or unsound” practices, require affirmative actions to correct any violation or practice, issue administrative orders that can be judicially enforced, direct increases in capital, direct the sale of subsidiaries or other assets, limit dividends and distributions, restrict growth, assess civil monetary penalties, remove officers and directors, terminate deposit insurance, and appoint a conservator or receiver.

Engaging in unsafe or unsound practices or failing to comply with applicable laws, regulations and supervisory agreements could subject the Company, its subsidiaries and their respective officers, directors and institution-affiliated parties to the remedies described above and other sanctions. In addition, the FDIC could terminate NBH Bank’s deposit insurance if it determined that the Bank’s financial condition was unsafe or unsound or that the bank engaged in unsafe or unsound practices or violated an applicable rule, regulation, order or condition enacted or imposed by the bank’s regulators.

Regulatory Capital Requirements

In General

As a bank holding company, we are subject to regulatory capital adequacy requirements implemented by the Federal Reserve. The federal banking agencies have risk-based capital adequacy guidelines intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations. NBH Bank also is, and other depository institution subsidiaries that we may acquire or control in the future will be, subject to capital adequacy guidelines as implemented by the relevant federal banking agency. In the case of the Company and NBH Bank, applicable capital guidelines can be found in the Federal Reserve’s Regulations H and Q.

The capital rules require banks and bank holding companies to maintain a minimum common equity tier 1 capital ratio of 4.5%, a total tier 1 capital ratio of 6%, a total capital ratio of 8%, and a leverage ratio of 4%. Under recently revised

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guidelines, bank holding companies will ultimately be required to hold a capital conservation buffer of common equity tier 1 capital of 2.5% to avoid limitations on capital distributions and executive compensation payments. 

Further, the federal bank regulatory agencies may, however, set higher capital requirements for an individual bank or when a bank’s particular circumstances warrant. At this time, the bank regulatory agencies are more inclined to impose higher capital requirements in order to be considered well-capitalized, and future regulatory change could impose higher capital standards as a routine matter.

The Federal Reserve may also set higher capital requirements for holding companies whose circumstances warrant it. For example, holding companies experiencing internal growth or making acquisitions are expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets.

Prompt Corrective Action

The FDI Act requires federal bank regulatory agencies to take “prompt corrective action” with respect to FDIC-insured depository institutions that do not meet minimum capital requirements. A depository institution’s treatment for purposes of the prompt corrective action provisions will depend upon how its capital levels compare to various capital measures and certain other factors, as established by regulation. Federal banking regulators are required to take various mandatory supervisory actions and are authorized to take other discretionary actions with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed. Generally, subject to a narrow exception, the banking regulator must appoint a receiver or conservator for an institution that is critically undercapitalized. Our regulatory capital ratios and those of NBH Bank are in excess of the levels established for “well-capitalized” institutions.

Bank Holding Companies as a Source of Strength

The Federal Reserve requires that a bank holding company serve as a source of financial and managerial strength to each bank that it controls and, under appropriate circumstances, commit resources to support each such controlled bank. This support may be required at times when the bank holding company may not have the resources to provide the support. Because we are a bank holding company, the Federal Reserve views the Company (and its consolidated assets) as a source of financial and managerial strength for any controlled depository institutions.

Under the prompt corrective action provisions, if a controlled bank is undercapitalized, then the regulators could require its bank holding company to guarantee a capital restoration plan. In addition, if the Federal Reserve believes that a bank holding company’s activities, assets or affiliates represent a significant risk to the financial safety, soundness or stability of a controlled bank, then the Federal Reserve could require the bank holding company to terminate the activities, liquidate the assets or divest the affiliates. The regulators may require these and other actions in support of controlled banks even if such action is not in the best interests of the bank holding company or its shareholders.

The Dodd-Frank Act codified the requirement that holding companies, like the Company, serve as a source of financial strength for their subsidiary depository institutions, by providing financial assistance to its insured depository institution subsidiaries in the event of financial distress. Under the source of strength doctrine, the Company could be required to provide financial assistance to NBH Bank should it experience financial distress.

In addition, capital loans by us to NBH Bank will be subordinate in right of payment to deposits and certain other indebtedness of NBH Bank. In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of NBH Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

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Dividend Restrictions

The Company is a legal entity separate and distinct from its subsidiaries. Because the Company’s consolidated net income consists largely of the net income of NBH Bank, the Company’s ability to pay dividends depends upon its receipt of dividends from its subsidiary. The ability of a bank to pay dividends and make other distributions is limited by federal and state law. The specific limits depend on a number of factors, including the bank’s type of charter, recent earnings, recent dividends, level of capital and regulatory status. As a member of the Federal Reserve System and a Colorado state-chartered bank, NBH Bank is subject to Regulation H and limitations under Colorado law with respect to the payment of dividends. Non-bank subsidiaries are also limited by certain federal and state statutory provisions and regulations covering the amount of dividends that may be paid in any given year.

The ability of a bank holding company to pay dividends and make other distributions can also be limited. The Federal Reserve has authority to prohibit a bank holding company from paying dividends or making other distributions. A bank holding company should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing. In addition, as a Delaware corporation, the Company is subject to certain limitations and restrictions under Delaware corporate law with respect to the payment of dividends and other distributions.

Depositor Preference

The FDI Act provides that, in the event of the “liquidation or other resolution” of an insured depository institution, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution. If our insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, nondeposit creditors, including us, with respect to any extensions of credit they have made to such insured depository institution.

Limits on Transactions with Affiliates

Federal law restricts the amount and the terms of both credit and non-credit transactions (generally referred to as “Covered Transactions”) between a bank and its non-bank affiliates. Covered Transactions with any single affiliate may not exceed 10% of the capital stock and surplus of the bank, and Covered Transactions with all affiliates may not exceed, in the aggregate, 20% of the bank’s capital and surplus. For a bank, capital stock and surplus refers to the bank’s tier 1 and tier 2 capital, as calculated under the risk-based capital guidelines, plus the balance of the allowance for credit losses excluded from tier 2 capital. The bank’s transactions with all of its affiliates in the aggregate are limited to 20% of the foregoing capital. In addition, in connection with Covered Transactions that are extensions of credit, the bank may be required to hold collateral to provide added security to the bank, and the types of permissible collateral may be limited. The Dodd-Frank Act generally enhances the restrictions on transactions with affiliates, including an expansion of what types of transactions are Covered Transactions to include credit exposures related to derivatives, repurchase agreements and securities lending arrangements and an increase in the amount of time for which collateral requirements regarding Covered Transactions must be satisfied. As of December 31, 2017, the Company did not have any outstanding Covered Transactions.

Regulatory Notice and Approval Requirements for Acquisitions of Control

We must generally receive federal bank regulatory approval before we can acquire an institution or business. Specifically, as a bank holding company, we must obtain prior approval of the Federal Reserve in connection with any acquisition that would result in the Company owning or controlling 5% or more of any class of voting securities of a bank or another bank holding company. Our ability to make investments in depository institutions will depend on our ability to obtain approval for such investments from the Federal Reserve. The Federal Reserve could deny our application based on the above criteria or other considerations. For example, we could be required to sell banking centers as a condition to receiving regulatory approval, which condition may not be acceptable to us or, if acceptable to us, may reduce the benefit of any acquisition.

Federal and state laws, including the BHCA and the Change in Bank Control Act, impose additional prior notice or approval requirements and ongoing regulatory requirements on any investor that seeks to acquire direct or indirect “control” of an

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FDIC-insured depository institution or bank holding company. Whether an investor “controls” a depository institution is based on all of the facts and circumstances surrounding the investment. As a general matter, an investor is deemed to control a depository institution or other company if the investor owns or controls 25% or more of any class of voting securities. Subject to rebuttal, an investor is presumed to control a depository institution or other company if the investor owns or controls 10% or more of any class of voting securities and either the depository institution or company is a public company or no other person will hold a greater percentage of that class of voting securities after the acquisition. If an investor’s ownership of our voting securities were to exceed certain thresholds, the investor could be deemed to “control” us for regulatory purposes. This could subject the investor to regulatory filings or other regulatory consequences.

Anti-Money Laundering Requirements

Under federal law, including the Bank Secrecy Act and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), certain types of financial institutions, including insured depository institutions, must maintain anti-money laundering programs that include established internal policies, procedures and controls; a designated compliance officer; an ongoing associate training program; and testing of the program by an independent audit function. Financial institutions are prohibited from entering into specified financial transactions and account relationships and must meet enhanced standards for due diligence, client identification, and recordkeeping, including in their dealings with non-U.S. financial institutions and non-U.S. clients. Financial institutions must take reasonable steps to conduct enhanced scrutiny of account relationships to guard against money laundering and to report any suspicious information maintained by financial institutions. Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution’s anti-money laundering compliance when considering regulatory applications filed by the institution, including applications for banking mergers and acquisitions. The regulatory authorities have imposed “cease and desist” orders and civil money penalty sanctions against institutions found to be violating these obligations.

Consumer Laws and Regulations

Banks and other financial institutions are subject to numerous laws and regulations intended to protect consumers in their transactions with banks. These laws include, among others, laws regarding unfair and deceptive acts and practices and usury laws, as well as the following consumer protection statutes: Truth in Lending Act, Truth in Savings Act, Electronic Funds Transfer Act, Flood Disaster Protection Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair and Accurate Credit Transactions Act, Fair Housing Act, Fair Credit Reporting Act, Fair Debt Collection Act, GLB Act, Home Mortgage Disclosure Act, Right to Financial Privacy Act and Real Estate Settlement Procedures Act.

Many states and local jurisdictions have consumer protection laws analogous, and in addition, to those listed above. These state and local laws regulate the manner in which financial institutions deal with clients when taking deposits, making loans or conducting other types of transactions.

The Consumer Financial Protection Bureau (the “CFPB”) has broad rulemaking authority for a wide range of consumer financial laws that apply to all banks. The CFPB is authorized to issue rules for both bank and nonbank companies that offer consumer financial products and services, subject to consultation with the prudential banking regulators.  In general, however, banks with assets of $10 billion or less, such as NBH Bank, will continue to be examined for consumer compliance by their primary bank regulator.

Much of the CFPB’s rulemaking has focused on mortgage lending and servicing, including an important rule requiring lenders to ensure that prospective buyers have the ability to repay their mortgages. Other areas of current CFPB focus include consumer protections for prepaid cards, payday lending, debt collection, overdraft services and privacy notices. The CFPB has been particularly active in issuing rules and guidelines concerning residential mortgage lending and servicing, issuing numerous rules and guidance related to residential mortgages. Perhaps the most significant of these guidelines are the “Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act” portions of Regulation Z and the Know Before You Owe guidelines. Under the Dodd-Frank Act, creditors must make a reasonable and good faith determination, based on verified and documented information, that the consumer has a reasonable “ability to repay” a residential mortgage according to its terms as well as clearly and concisely disclose the terms and costs associated with these loans.

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The CFPB has actively issued enforcement actions against both large and small entities and to entities across the entire financial services industry. The CFPB has relied upon “unfair, deceptive, or abusive acts” prohibitions as its primary enforcement tool. However, the CFPB and DOJ continue to be focused on fair lending in taking enforcement actions against banks with renewed emphasis on alleged redlining practices. Failure to comply with these laws and regulations could give rise to regulatory sanctions, client rescission rights, actions by state and local attorneys general and civil or criminal liability.

The Community Reinvestment Act

The CRA is intended to encourage banks to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, consistent with safe and sound operations. The regulators examine banks and assign each bank a public CRA rating. The CRA then requires bank regulators to take into account the bank’s record in meeting the needs of its community when considering certain applications by a bank, including applications to establish a banking center or to conduct certain mergers or acquisitions. The Federal Reserve is required to consider the CRA records of a bank holding company’s controlled banks when considering an application by the bank holding company to acquire a bank or to merge with another bank holding company.

When we apply for regulatory approval to make certain investments, the regulators will consider the CRA record of the target institution and our depository institution subsidiary. An unsatisfactory CRA record could substantially delay approval or result in denial of an application.

Reserve Requirements

Pursuant to regulations of the Federal Reserve, all banks are required to maintain average daily reserves at mandated ratios against their transaction accounts. In addition, reserves must be maintained on certain non-personal time deposits. These reserves must be maintained in the form of vault cash or in an account at a Federal Reserve Bank.

Deposit Insurance Assessments

All of a depositor’s accounts at an insured bank, including all non-interest bearing transaction accounts, are insured by the FDIC up to $250,000. FDIC-insured banks are required to pay deposit insurance premiums to the FDIC. The FDIC has adopted a risk-based assessment system whereby FDIC-insured depository institutions pay insurance premiums at rates based on their risk classification. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to the regulators.

Assessments are based on an institution’s average total consolidated assets less average tangible equity (subject to risk-based adjustments that would further reduce the assessment base for custodial banks). NBH Bank may be able to pass part or all of this cost on to its clients, including in the form of lower interest rates on deposits, or fees to some depositors, depending on market conditions.

The FDIC may terminate a depository institution’s deposit insurance upon a finding that the institution’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices or has violated any applicable rule, regulation, order or condition enacted or imposed by the institution’s regulatory agency. If deposit insurance for a banking business we invest in or acquire were to be terminated, that would have a material adverse effect on that banking business and potentially on the Company as a whole.

Interstate Banking

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act (the “Riegle-Neal Act”), a bank holding company may acquire banks in states other than its home state, subject to any state requirement that the bank has been organized and operating for a minimum period of time, not to exceed five years, and the requirement that the bank holding company not control, prior to or following the proposed acquisition, more than 10% of the total amount of deposits of insured depository institutions nationwide or, unless the acquisition is the bank holding company’s initial entry into the state, more than 30% of such deposits in the state (or such lesser or greater amount set by the state). Bank holding companies must be well capitalized

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and well managed, not merely adequately capitalized and adequately managed, in order to acquire a bank located outside of the bank holding company’s home state.

The Riegle-Neal Act also authorizes banks to merge across state lines, thereby creating interstate banking centers. A national or state bank, with the approval of its regulator, may open a de novo banking center in any state if the law of the state in which the banking center is proposed would permit the establishment of the banking center if the bank were a bank chartered in that state.

The Federal Reserve, OCC, and FDIC jointly issued a final rule, effective October 10, 1977, that adopted uniform regulations implementing Section 109 of the Riegle-Neal Act. Section 109 prohibits any bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Congress enacted Section 109 to ensure that interstate branches would not take deposits from a community without the bank reasonably helping to meet the credit needs of that community.

Changes in Laws, Regulations or Policies

Congress and state legislatures may introduce from time to time measures or take actions that would modify the regulation of banks or bank holding companies. In addition, federal and state regulatory agencies also periodically propose and adopt changes to their regulations or change the manner in which existing regulations are applied. Such changes could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks and other financial institutions, all of which could affect our investment opportunities and our assessment of how attractive such opportunities may be. We cannot predict whether potential legislation will be enacted and, if enacted, the effect that it or any implementing regulations would have on our business, results of operations, liquidity or financial condition.

More Information

Our website is www.nationalbankholdings.com. We make available free of charge, through our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the U.S. Securities and Exchange Commission (“SEC”). In addition, the public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Item 1A.    RISK FACTORS

Risks Relating to Our Banking Operations

We are still a relatively young Company with a limited and complex operating history from which investors can evaluate our past financial and operating performance and future prospects.

We were organized in 2009 and acquired selected assets and assumed selected liabilities of Hillcrest Bank, Bank Midwest, Bank of Choice and Community Banks of Colorado in October 2010, December 2010, July 2011 and October 2011, respectively, and acquired Pine River Valley Bank and Peoples, Inc. by merger in August 2015 and January 2018, respectively. Because our banking operations began in late 2010, and because our acquisitions in 2010 and 2011 were of failed or troubled banks, we have a limited operating history upon which investors can evaluate our operational performance or compare our recent performance to historical performance. The business models and experiences of the depository institutions we have acquired to date and may acquire in the future may not be reflective of our plans. More importantly, because a portion of our acquired loans and other real estate owned (“OREO”) were covered by loss sharing agreements with the FDIC and all of the loans and OREO we acquired were marked to fair value at the time of our acquisitions, we believe that the historical financial results of the acquisitions are less useful to an evaluation of our future prospects and financial and operating performance.

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Certain other factors may also make it difficult for investors to evaluate our future prospects and financial and operating performance, including, among others:

	our current asset mix, loan quality and allowance for loan losses are not fully representative of our anticipated future asset mix, loan quality and allowance for loan losses, which may change materially as we continue to undertake organic loan origination and banking activities and pursue future acquisitions;
	the income we report from certain acquired assets due to loan discounts and accretable yield may be higher than the returns available in the current market and, if we are unable to make new performing loans and acquire other performing assets in sufficient volume, we may be unable to generate the earnings necessary to implement our growth strategy;
	our excess cash reserves and liquid investment securities portfolio, may not be representative of our future cash position;
	our historical cost structure and capital expenditure requirements are not necessarily reflective of our anticipated cost structure and capital spending as we continue to identify efficiencies and operate our organic banking platform; and
	our regulatory capital ratios, which currently exceed regulatory minimum requirements, are not necessarily representative of our future regulatory capital ratios.

Changes in general business and economic conditions could materially and adversely affect us.

Our business and operations are sensitive to general business and economic conditions in the United States and in our two core markets in Colorado and the greater Kansas City region. If the economies in our core markets, or the U.S. economy more generally, experience worsening economic conditions, including industry-specific conditions, we could be materially and adversely affected. Weak economic conditions may be characterized by deflation, fluctuations in debt and equity capital markets, including a lack of liquidity and/or depressed prices in the secondary market for mortgage loans, increased delinquencies on loans, residential and commercial real estate price declines and lower home sales and commercial activity, and further or prolonged pressure on energy prices. All of these factors would be detrimental to our business. Our business is significantly affected by monetary and related policies of the U.S. federal government, its agencies and government-sponsored entities. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond our control and could have a material adverse effect on us.

Changes in the assumptions underlying our acquisition method of accounting, or other significant accounting estimates could affect our financial information and have a material adverse effect on us.

A material portion of our financial results is based on, and subject to, significant assumptions and subjective judgments. As a result of our acquisitions, our financial information is heavily influenced by the application of the acquisition method of accounting and was heavily influenced in prior periods by loss share accounting. Both methodologies require us to make complex assumptions, and these assumptions materially affect our financial results. As such, any financial information generated through the use of the acquisition method of accounting or loss share accounting is subject to modification or change. If our assumptions are incorrect and we change or modify our assumptions, it could have a material adverse effect on us or our previously reported results. Additionally, a change in our accounting estimates, such as our ability to realize deferred tax assets, the need for a valuation allowance or the recoverability of the goodwill recorded at the time of our acquisitions, could have a material adverse effect on our financial results.

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Our business is highly susceptible to credit risk and fluctuations in the value of real estate and other collateral securing such credit.

As a lender, we are exposed to the risk that our clients will be unable to repay their loans according to their terms and that the collateral securing the payment of their loans (if any) may not be sufficient to assure repayment. The risks inherent in making any loan include risks with respect to the ability of borrowers to repay their loans and, if applicable, the period of time over which the loan is repaid, risks relating to proper loan underwriting and guidelines, risks resulting from changes in economic and industry conditions, risks inherent in dealing with individual borrowers and risks resulting from uncertainties as to the future value of collateral. Similarly, we have credit risk embedded in our securities portfolio. Our credit standards, procedures and policies may not prevent us from incurring substantial credit losses, particularly in light of market developments in recent years. A decline in residential real estate market prices and reduced levels of home sales, could adversely affect the value of collateral securing mortgage loans resulting in greater charge-offs in future periods, as well as adversely impact mortgage loan originations and gains on sale of mortgage loans. A decline in commercial real estate values would likewise adversely affect the value of collateral securing certain commercial loans and result in greater charge-offs in future periods. Declines in real estate values and home sales volumes, and financial stress on borrowers as a result of job losses or other factors, could have further adverse effects on borrowers that result in higher delinquencies and greater charge-offs in future periods, which could materially and adversely affect us.

We depend on our executive officers and key personnel to implement our strategy and could be harmed by the loss of their services.

The execution of our strategy depends in large part on the skills of our executive management team and our ability to motivate and retain these and other key personnel, including key personnel added through mergers and acquisitions. Accordingly, the loss of service of one or more of our executive officers or key personnel could reduce our ability to successfully implement our growth strategy and materially and adversely affect us. Our success also depends on the experience of our banking center managers and relationship managers and on their relationships with the clients and communities they serve. The loss of these key personnel could negatively impact our banking operations. The loss of key senior personnel, or the inability to recruit and retain qualified personnel in the future, could have a material adverse effect on us.

Our allowance for loan losses and fair value adjustments may prove to be insufficient to absorb losses inherent in our loan or OREO portfolio.

We maintain an allowance for loan losses (“ALL”), which is a reserve established through a provision for loan losses charged to expense, which we believe is appropriate to provide for probable losses inherent in our loan portfolio. The amount of this allowance is determined by our management through periodic reviews.

The determination of the appropriate level of the allowance for loan losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding our loans, identification of additional problem loans by us and other factors, both within and outside of our control, may require an increase in the allowance for loan losses. If the real estate markets deteriorate, we expect that we will experience increased delinquencies and credit losses, particularly with respect to construction, land development and land loans. In addition, our regulators periodically review our allowance for loan losses and may require an increase in the allowance for loan losses or the recognition of further loan charge-offs, based on judgments different than those of management. In addition, if charge-offs in future periods exceed the allowance for loan losses, we will need additional provisions to increase the allowance for loan losses. Any increases in the allowance for loan losses will result in a decrease in net income and capital and may have a material adverse effect on us.

We hold and acquire an amount of OREO from time to time, which may lead to volatility in operating expenses and vulnerability to declines in real property values.

When necessary, we foreclose on and take title to the real estate serving as collateral for our loans as part of our business. Real estate that we own but do not use in the ordinary course of our operations is referred to as OREO property. Higher

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OREO balances as a result of our acquisitions have led to greater expenses as we incur costs to manage and dispose of the properties. We expect that our earnings will continue to be negatively affected by various expenses associated with OREO, including personnel costs, insurance and taxes, completion and repair costs, valuation adjustments and other expenses associated with property ownership, as well as by the funding costs associated with OREO assets. We evaluate OREO properties periodically and write down the carrying value of the properties if the results of our evaluation require it. The expenses associated with OREO and any further OREO write-downs could have a material adverse effect on us.

We are subject to environmental liability risk associated with lending activities.

A significant portion of our loan portfolio is secured by real property, and we could become subject to environmental liabilities with respect to one or more of these properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans. There is a risk that hazardous or toxic substances could be found on these properties, and we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property. Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property.  In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.

The expanding body of federal, state and local regulation of loan servicing, collections or other aspects of our business may increase the cost of compliance and the risks of noncompliance.

We service our own loans, and loan servicing is subject to extensive regulation by federal, state and local governmental authorities as well as to various laws and judicial and administrative decisions imposing requirements and restrictions on those activities. The volume of new or modified laws and regulations has increased in recent years and, in addition, some individual municipalities have begun to enact laws that restrict loan servicing activities including delaying or temporarily preventing foreclosures or forcing the modification of certain mortgages. If regulators impose new or more restrictive requirements, we may incur additional significant costs to comply with such requirements which may further adversely affect us. In addition, our failure to comply with these laws and regulations could possibly lead to: civil and criminal liability; damage to our reputation in the industry; fines and penalties and litigation, including class action lawsuits; and administrative enforcement actions. Any of these outcomes could materially and adversely affect us.

The fair value of our investment securities can fluctuate due to market conditions outside of our control.

We have historically taken a conservative investment strategy with our securities portfolio, with concentrations of securities that are primarily backed by government sponsored enterprises. In the future, we may seek to increase yields through more aggressive strategies, which may include a greater percentage of corporate securities and structured credit products.Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. These factors include, but are not limited to, rating agency actions in respect of the securities, defaults by the issuer or with respect to the underlying securities, and changes in market interest rates and instability in the capital markets. These factors, among others, could cause other-than-temporary impairments and realized and/or unrealized losses in future periods and declines in other comprehensive income, which could have a material adverse effect on us. The process for determining whether impairment of a security is other-than-temporary usually requires complex, subjective judgments about the future financial performance and liquidity of the issuer and any collateral underlying the security in order to assess the probability of receiving all contractual principal and interest payments on the security.

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We face significant competition from other financial institutions and financial services providers, which may materially and adversely affect us.

Consumer and commercial banking is highly competitive. Our markets contain a large number of community and regional banks as well as a significant presence of the country’s largest commercial banks. We compete with other state and national financial institutions, including savings and loan associations, savings banks and credit unions, for deposits and loans. In addition, we compete with financial intermediaries, such as consumer finance companies, mortgage banking companies, insurance companies, securities firms, mutual funds and several government agencies, as well as major retailers, in providing various types of loans and other financial services. Some of these competitors have a long history of successful operations in our markets, greater ties to local businesses and more expansive banking relationships, as well as better established depositor bases. Some of our competitors also have greater resources and access to capital and possess an advantage by being capable of maintaining numerous banking locations in more convenient sites, operating more ATMs and conducting extensive promotional and advertising campaigns or operating a more developed internet platform. Competitors may also exhibit a greater tolerance for risk and behave more aggressively with respect to pricing in order to increase their market share. In addition, the effects of disintermediation can also impact the banking business because of the fast growing body of FinTech companies that use software to deliver mortgage lending, payment services and other financial services.

Our ability to compete successfully depends on a number of factors, including, among others:

	the ability to develop, maintain and build upon long-term client relationships based on quality service, effective and efficient products and services, high ethical standards and safe and sound assets;
	the scope, relevance and pricing of products and services offered to meet client needs and demands;
	the rate at which we introduce new products and services relative to our competitors;
	the ability to attract and retain highly qualified associates to operate our business;
	the ability to expand our market position;
	client satisfaction with our level of service;
	the ability to invest in new technologies;
	the ability to operate our business effectively and efficiently; and
	industry and general economic trends.

Failure to perform in any of these areas could significantly weaken our competitive position, which could materially and adversely affect us.

We may not be able to meet the cash flow requirements of deposit withdrawals and other business needs unless we maintain sufficient liquidity.

We require liquidity to make loans and to repay deposit and other liabilities as they become due or are demanded by clients. We principally depend on checking, savings and money market deposit account balances and other forms of client deposits as our primary source of funding for our lending activities. As a result of a decline in overall depositor confidence, an increase in interest rates paid by competitors, general interest rate levels, higher returns being available to clients on alternative investments and general economic conditions, a substantial number of our clients could withdraw their bank deposits with us from time to time, resulting in our deposit levels decreasing substantially, and our cash on hand may not be able to cover such withdrawals and our other business needs, including amounts necessary to operate and grow our business. This would require us to seek third party funding or other sources of liquidity, such as asset sales. Our access to third party funding sources, including our ability to raise funds through the issuance of additional shares of our common stock or other equity or equity-related securities, incurrence of debt, and federal funds purchased, may be impacted by our financial strength, performance and prospects and may also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry, all of which may make potential funding sources more difficult to access, less reliable and more expensive. We may not have access to third party funding in sufficient amounts on favorable terms, or the ability to undertake asset sales or access other sources of liquidity, when needed, or at all, which could materially and adversely affect us.

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Like other financial services institutions, our asset and liability structures are monetary in nature.  Such structures are affected by a variety of factors, including changes in interest rates, which can impact the value of financial instruments held by us.

Like other financial services institutions, we have asset and liability structures that are essentially monetary in nature and are directly affected by many factors, including domestic and international economic and political conditions, broad trends in business and finance, legislation and regulation affecting the national and international business and financial communities, monetary and fiscal policies, inflation, currency values, market conditions, the availability and terms (including cost) of short-term or long-term funding and capital, the credit capacity or perceived creditworthiness of clients and counterparties and the level and volatility of trading markets. Such factors can impact clients and counterparties of a financial services institution and may impact the value of financial instruments held by a financial services institution.

Our earnings and cash flows largely depend upon the level of our net interest income, which is the difference between the interest income we earn on loans, investments and other interest earning assets, and the interest we pay on interest bearing liabilities, such as deposits and borrowings. Because different types of assets and liabilities may react differently and at different times to market interest rate changes, changes in interest rates can increase or decrease our net interest income. When interest-bearing liabilities mature or reprice more quickly than interest earning assets in a period, an increase in interest rates would reduce net interest income. Similarly, when interest earning assets mature or reprice more quickly, and because the magnitude of repricing of interest earning assets is often greater than interest bearing liabilities, falling interest rates would reduce net interest income.

Accordingly, changes in the level of market interest rates affect our net yield on interest earning assets and liabilities, loan and investment securities portfolios and our overall results. Changes in interest rates may also have a significant impact on any future loan origination revenues. Historically, there has been an inverse correlation between the demand for loans and interest rates. Loan origination volume and revenues usually decline during periods of rising or high interest rates and increase during periods of declining or low interest rates. Changes in interest rates also have a significant impact on the carrying value of a significant percentage of the assets, both loans and investment securities, on our balance sheet. We may incur debt in the future and that debt may also be sensitive to interest rates and any increase in interest rates could materially and adversely affect us. Interest rates are highly sensitive to many factors beyond our control, including general economic conditions and policies of various governmental and regulatory agencies, particularly the Federal Reserve. Changes in the Federal Reserve’s interest rate policies or other changes in monetary policies and economic conditions could materially and adversely affect us.

We are dependent on our information technology and telecommunications systems and third-party providers, and systems failures or interruptions could have a material adverse effect on us.

Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party providers. We outsource many of our major systems, such as data processing, loan servicing and deposit processing systems. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. If significant, sustained or repeated, a system failure or service denial could compromise our ability to operate effectively, damage our reputation, result in a loss of client business, and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on us.

A failure in or breach of our security systems or infrastructure, or those of our third-party providers, could result in financial losses to us or in the disclosure or misuse of confidential or proprietary information, including client information, and could have a material adverse effect on us.

As a financial institution, we may be the target of fraudulent activity that may result in financial losses to us or our clients, privacy breaches against our clients or damage to our reputation. Such fraudulent activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, unauthorized intrusion into or use of our systems, ATM skimming or jackpotting, and other dishonest acts. We provide our clients with the ability to bank remotely, including via online, mobile

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and phone. The secure transmission of confidential information over the internet and other remote channels is a critical element of remote banking.

Our network could be vulnerable to unauthorized access, computer viruses, phishing schemes, ransomware and other security breaches. We may be required to spend significant capital and other resources to protect against the threat of security breaches and computer viruses, or to alleviate problems caused by security breaches or viruses. Given the increasingly high volume of our transactions, certain errors may be repeated or compounded before they can be discovered and rectified.  To the extent that our activities or the activities of our clients involve the storage and transmission of confidential information, security breaches and viruses could expose us to reputational damage, claims, regulatory scrutiny, litigation and other possible liabilities.  Any inability to prevent security breaches or computer viruses could also cause existing clients to lose confidence in our systems and could materially and adversely affect us. Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of the threats from organized cybercriminals and hackers, and our plans to continue to provide digital banking products and services to our clients.

Information security risks for financial institutions like us have increased recently in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against large financial institutions, particularly denial of service attacks, that are designed to disrupt key business services, such as client-facing web sites. We are not able to anticipate or implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently and because attacks can originate from a wide variety of sources.  We employ detection and response mechanisms designed to contain and mitigate security incidents, but early detection may be thwarted by sophisticated attacks and malware designed to avoid detection.

We also face risks related to cyber-attacks and other security breaches in connection with credit or debit card, including ATM-related, transactions that typically involve the transmission of sensitive information regarding our clients through various third parties, including merchant acquiring banks, payment processors, payment card networks (e.g., Visa, MasterCard) and our processors. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments such as the point of sale that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us through no fault of our own, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other third party service providers to conduct other aspects of our business operations and face similar risks relating to them. While we regularly conduct security assessments on these third parties, we cannot be sure that their information security protocols are sufficient to withstand a cyber-attack or other security breach.

Risks Relating to our Growth Strategy

We may not be able to effectively manage our growth.

Our future operating results depend to a large extent on our ability to successfully manage our growth. Our growth has placed, and it may continue to place, significant demands on our operations and management. Whether through additional acquisitions or organic growth, our current plan to expand our business is dependent upon our ability to:

	continue to implement and improve our operational, credit, financial, legal, management and other internal risk controls and processes and our reporting systems and procedures in order to manage a growing number of client relationships;
	scale our technology platform;
	integrate our acquisitions and develop consistent policies throughout the various lines of businesses; and
	attract and retain management talent.

We may not successfully implement improvements to, or integrate, our management information and control systems, procedures and processes in an efficient or timely manner and may discover deficiencies in existing systems and controls. In particular, our controls and procedures must be able to accommodate an increase in loan volume in various markets and the

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infrastructure that comes with new banking centers and banks. Thus, our growth strategy may divert management from our existing franchises and may require us to incur additional expenditures to expand our administrative and operational infrastructure and, if we are unable to effectively manage and grow our financial services franchise, we could be materially and adversely affected. In addition, if we are unable to manage future expansion in our operations, we may experience compliance and operational problems, have to slow the pace of growth, or have to incur additional expenditures beyond current projections to support such growth, any one of which could materially and adversely affect us.

Our acquisitions generally will require regulatory approvals, and failure to obtain them would restrict our growth.

We intend to complement and expand our business by pursuing strategic acquisitions of financial services franchises.  Generally, any acquisition of target financial institutions, banking centers or other banking assets by us will require approval by, and cooperation from, a number of governmental regulatory agencies, including the Federal Reserve and Colorado Division of Banking.  In acting on applications, our banking regulators consider, among other factors:

	the effect of the acquisition on competition;
	the financial condition, liquidity, results of operations, capital levels and future prospects of the applicant and the bank(s) involved;
	the quantity and complexity of previously consummated acquisitions;
	the managerial resources of the applicant and the bank(s) involved;
	the convenience and needs of the community, including the record of performance under the Community Reinvestment Act (which we refer to as the “CRA”); and
	the effectiveness of the applicant in combating money laundering activities.

Such regulators could deny our application based on the above criteria or other considerations, which would restrict our growth, or the regulatory approvals may not be granted on terms that are acceptable to us. For example, we could be required to sell banking centers as a condition to receiving regulatory approvals, and such a condition may not be acceptable to us or may reduce the benefit of any acquisition. In addition, prior to the submission of an application our regulators could discourage us from pursuing strategic acquisitions or indicate that regulatory approvals may not be granted on terms that would be acceptable to us, which could have the same effect of restricting our growth or reducing the benefit of any acquisitions.

The success of future transactions will depend on our ability to successfully identify and consummate acquisitions of financial services franchises that meet our investment objectives. Because of the intense competition for acquisition opportunities and the limited number of potential targets, we may not be able to successfully consummate acquisitions on attractive terms.

There are significant risks associated with our strategy to identify and successfully consummate acquisitions. There are a limited number of acquisition opportunities, and we expect to encounter intense competition from other banking organizations competing for acquisitions and also from other investment funds and entities looking to acquire financial institutions and financial services franchises. Many of these entities are well established and have extensive experience in identifying and consummating acquisitions directly or through affiliates. Many of these competitors possess ongoing banking operations with greater financial, technical, human and other resources and access to capital than we do, which could limit the acquisition opportunities we pursue. Our competitors may be able to achieve greater cost savings, through consolidating operations or otherwise, than we could. These competitive limitations give others an advantage in pursuing certain acquisitions. In addition, increased competition may drive up the prices for the acquisitions we pursue and make the other acquisition terms more onerous, which would make the identification and successful consummation of those acquisitions less attractive to us. Competitors may be willing to pay more for acquisitions than we believe are justified, which could result in us having to pay more for them than we prefer or to forego the opportunity. The trading price of our common stock and of the stock of other potential acquirers may affect our ability to offer a competitive price for acquisitions where stock is proposed as acquisition consideration. As a result of the foregoing, we may be unable to successfully identify and consummate acquisitions on attractive terms, or at all, that are necessary to grow our business.

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To the extent that we are unable to identify and consummate attractive acquisitions, or continue to increase loans through organic loan growth, we may be unable to successfully implement our growth strategy, which could materially and adversely affect us.

We intend to continue to grow our business through strategic acquisitions of financial services franchises coupled with organic loan growth. Previous availability of attractive acquisition targets may not be indicative of future acquisition opportunities, and we may be unable to identify any acquisition targets that meet our investment objectives. As our acquired loan portfolio, which generally produces higher yields than our originated loans due to loan discounts and accretable yield, is paid down, we expect downward pressure on our income to the extent that the runoff is not replaced with other high-yielding loans. As a result of the foregoing, if we are unable to replace loans in our existing portfolio with comparable high-yielding loans, we could be materially and adversely affected. We could also be materially and adversely affected if we choose to pursue riskier higher-yielding loans that fail to perform.

Projected operating results for businesses acquired by us may be inaccurate and may vary significantly from actual results.  To the extent that we make acquisitions that involve distressed assets, we may not be able to realize the value we predict from these assets or make sufficient provision for future losses in the value of, or accurately estimate the future writedowns to be taken in respect of, these assets.

We will generally establish the pricing of transactions and the capital structure of financial services franchises to be acquired by us on the basis of financial projections for such financial services franchises. In general, projected operating results will be based on the judgment of our management team.  In all cases, projections are only estimates of future results that are based upon assumptions made at the time that the projections are developed and the projected results may vary significantly from actual results. General economic, political and market conditions can have a material adverse impact on the reliability of such projections. In the event that the projections made in connection with our acquisitions, or future projections with respect to new acquisitions, are not accurate, such inaccuracies could materially and adversely affect us. 

Delinquencies and losses in the loan portfolios and other assets we acquire may exceed our initial forecasts developed during our due diligence investigation prior to their acquisition and, thus, produce lower returns than we believed our purchase price supported. Furthermore, our due diligence investigation may not reveal all material issues. If, during the diligence process, we fail to identify all relevant issues related to an acquisition, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in significant losses. Any of these events could materially and adversely affect us. Economic conditions may create an uncertain environment with respect to asset valuations and there is no certainty that we will be able to sell assets or institutions after we acquire them if we determine it would be in our best interests to do so. In addition, there may be limited liquidity for certain asset classes we hold, including commercial real estate and construction and development loans. Any of the foregoing matters could materially and adversely affect us.

We face additional risks due to our increased mortgage banking activities that could negatively impact net income and profitability.

We sell substantially all of the mortgage loans that we originate. The sale of these loans generates non-interest income and can be a source of liquidity for the Bank. Disruption in the secondary market for residential mortgage loans as well as declines in real estate values could result in one or more of the following:

	our inability to sell mortgage loans on the secondary market, which could negatively impact our liquidity position;
	declines in real estate values could decrease the potential of mortgage originations, which could negatively impact our earnings;
	if it is determined that loans were made in breach of our representations and warranties to the secondary market, we could incur losses associated with the loans;
	increased compliance requirements could result in higher compliance costs, higher foreclosure proceedings or lower loan origination volume, all which could negatively impact future earnings; and
	a rise in interest rates could cause a decline in mortgage originations, which could negatively impact our earnings.

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Our use of appraisals in deciding whether to make loans secured by real property does not ensure that the value of the real property collateral will be sufficient to repay our loans.

In considering whether to make a loan secured by real property, we require an appraisal of the property. However, an appraisal is only an estimate of the value of the property at the time the appraisal is made and requires the exercise of a considerable degree of judgment. If the appraisal does not accurately reflect the amount that may be obtained upon sale or foreclosure of the property, whether due to a decline in property value after the date of the original appraisal or defective preparation of the appraisal, we may not realize an amount equal to the indebtedness secured by the property and as a result, we may suffer losses.

Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

We operate in multiple jurisdictions and we are subject to tax laws and regulations of the U.S. federal, state and local governments. From time to time, legislative initiatives may be adopted, such as the recent tax reform in the United States, which may impact our effective tax rate and could adversely affect our deferred tax assets, tax positions and/or our tax liabilities. In addition, U.S. federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our historical tax positions will not be challenged by relevant tax authorities or that we would be successful in defending our positions in connection with any such challenge.

Additionally, the full impact of “H.R.1”, known as the “Tax Cuts and Jobs Act” on us and our clients is unknown at present, creating uncertainty and risk related to our clients’ future demand for credit and our future results. Increased economic activity expected to result from the decrease in tax rates on business generally could spur economic activity that would encourage additional borrowing. At the same time, some clients may elect to use their additional cash flow from lower taxes to fund their existing levels of activity, decreasing borrowing needs. The elimination of the federal income tax deductibility of business interest expense for a number of our clients effectively increases the cost of borrowing and makes equity or hybrid funding relatively more attractive. This could have a long-term negative impact on business client borrowing. Further, uncertainty also exists surrounding the Tax Cuts and Jobs Act’s effects on housing markets, mortgage originations, unemployment rates, interest rates and the economies of the markets we serve. Finally, it is unclear how states and other taxing jurisdictions will respond to the Tax Cuts and Jobs Act.

Risks Relating to the Regulation of Our Industry

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 continues to materially affect our business.

The key effects of the Dodd-Frank Act on our business are:

	changes to regulatory capital requirements;
	creation of new government regulatory agencies (such as the Financial Stability Oversight Council, which oversees systemic risk, and the Consumer Financial Protection Bureau, which develops and enforces rules for bank and non-bank providers of consumer financial products);
	potential limitations on federal preemption;
	changes to deposit insurance assessments;
	regulation of debit interchange fees we earn;
	changes in retail banking regulations, including potential limitations on certain fees we may charge; and
	changes in regulation of consumer mortgage loan origination and risk retention.

Several provisions still require regulations to be promulgated by various federal agencies in order to be implemented, some of which have been proposed by the applicable federal agencies. The changes resulting from the Dodd-Frank Act have limited our business activities, required changes to certain of our business practices, imposed upon us more stringent capital, liquidity and leverage requirements or otherwise materially and may continue to adversely affect us. Failure to comply with the requirements could also materially and adversely affect us. Furthermore, additional uncertainties surrounding the Dodd-

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Frank Act, its implementation, and enforcement persist as a result of the current presidential administration. Any changes in the laws or regulations or their interpretations could be materially adverse to investors in our common stock.

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could materially and adversely affect us.

We are subject to extensive regulation, supervision, and legislation by federal and state regulators and bodies that govern almost all aspects of our operations. Intended to protect clients, depositors and the DIF, these laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage (including foreclosure and collection practices), limit the dividends or distributions that we can pay, restrict the ability of institutions to guarantee our debt, and impose certain specific accounting requirements on us that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital than GAAP. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. Our failure to comply with these laws and regulations, even if the failure follows good faith effort or reflects a difference in interpretation, could subject us to restrictions on our business activities, fines and other penalties, any of which could materially and adversely affect us. Further, any new laws, rules and regulations could make compliance more difficult or expensive and also materially and adversely affect us.

The FDIC’s restoration plan for the DIF and any related increased assessment rates could materially and adversely affect us.

The FDIC insures deposits at FDIC-insured depository institutions, such as our subsidiary bank, up to applicable limits. The amount of a particular institution’s deposit insurance assessment is based on that institution’s risk classification under an FDIC risk-based assessment system. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to its regulators. If current assessments imposed by the FDIC are insufficient for the DIF to meet its funding requirements, there may need to be further special assessments or increases in deposit insurance premiums. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. Any future additional assessments, increases or required prepayments in FDIC insurance premiums may materially and adversely affect us, including by reducing our profitability or limiting our ability to pursue certain business opportunities.

Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we become subject as a result of such examinations could materially and adversely affect us.

Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations. If, as a result of an examination, a federal or state banking agency were to determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we or our management was in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance. If we become subject to such regulatory actions, we could be materially and adversely affected.

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We are subject to the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions.  The Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, and restrictions on expansion activity. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation.

The Federal Reserve may require us to commit capital resources to support our subsidiary bank.

As a matter of policy, the Federal Reserve, which examines us and our subsidiaries, expects a bank holding company to act as a source of financial and managerial strength to a subsidiary bank and to commit resources to support such subsidiary bank.  Under the “source of strength” doctrine, the Federal Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank. In addition, the Dodd-Frank Act directs the federal bank regulators to require that all companies that directly or indirectly control an insured depository institution serve as a source of strength for the institution.  Under this requirement, we could be required to provide financial assistance to our subsidiary bank should our subsidiary bank experience financial distress.

A capital injection may be required at times when we do not have the resources to provide it and therefore we may be required to borrow the funds or raise additional equity capital from third parties. Any loans by a holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of the subsidiary bank. In the event of a bank holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the holding company’s general unsecured creditors, including the holders of its indebtedness. Any financing that must be done by the holding company in order to make the required capital injection may be difficult and expensive and may not be available on attractive terms, or at all, which likely would have a material adverse effect on us.

We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.

The federal Bank Secrecy Act, the USA PATRIOT Act and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. The federal Financial Crimes Enforcement Network, established by the U.S. Treasury Department to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of those requirements, and engages in coordinated enforcement efforts with the individual federal banking regulators, as well as the Department of Justice, Drug Enforcement Administration, and Internal Revenue Service. There is also increased scrutiny of compliance with the rules enforced by the Office of Foreign Assets Control. If our policies, procedures and systems are deemed deficient or the policies, procedures and systems of the financial institutions that we may acquire in the future are deficient, we would be subject to liability, including fines and regulatory actions (such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans), which could materially and adversely affect us. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.

Federal, state and local consumer lending laws may restrict our ability to originate certain mortgage loans or increase our risk of liability with respect to such loans and could increase our cost of doing business.

Federal, state and local laws have been adopted that are intended to eliminate certain lending practices considered “predatory.” These laws prohibit practices such as steering borrowers away from more affordable products, selling unnecessary insurance to borrowers, repeatedly refinancing loans and making loans without a reasonable expectation that the borrowers will be able to repay the loans irrespective of the value of the underlying property. It is our policy not to make

29

predatory loans, but these laws create the potential for liability with respect to our lending and loan investment activities. They increase our cost of doing business and, ultimately, may prevent us from making certain loans and cause us to reduce the average percentage rate or the points and fees on loans that we do make.

Our ability to pay dividends is subject to regulatory limitations and our bank subsidiary’s ability to pay dividends to us is also subject to regulatory limitations.

Our ability to declare and pay dividends depends both on the ability of our bank subsidiary to pay dividends to us and on certain federal regulatory considerations, including the guidelines of the Federal Reserve regarding capital adequacy and dividends. Because we are a separate legal entity from our bank subsidiary and we do not have significant operations of our own, any dividends paid by us to our shareholders would have to be paid from funds at the holding company level that are legally available therefor. However, as a bank holding company, we are subject to general regulatory restrictions on the payment of cash dividends. Federal bank regulatory agencies have the authority to prohibit bank holding companies from engaging in unsafe or unsound practices in conducting their business, which depending on the financial condition and liquidity of the holding company at the time, could include the payment of dividends. Additionally, various federal and state statutory provisions limit the amount of dividends that our bank subsidiary can pay to us as its holding company without regulatory approval. Finally, holders of our common stock are only entitled to receive such dividends as our board of directors may, in its unilateral discretion, declare out of funds legally available for such purpose based on a variety of considerations, including, without limitation, our historical and projected financial condition, liquidity and results of operations, capital levels, tax considerations, statutory and regulatory prohibitions and other limitations, general economic conditions and other factors deemed relevant by our board of directors. Accordingly, we may not pay the amount of dividends referenced in our current intention above, or any dividends at all, to our shareholders in the future.

Item 1B.    UNRESOLVED STAFF COMMENTS.

None

Item 2.       PROPERTIES.

Our principal executive offices are located in the Denver Tech Center area immediately south of Denver, Colorado. We also have approximately 70,000 square feet of office and operations space in Kansas City, Missouri. At December 31, 2017, we operated 44 banking centers in Colorado, 39 in Kansas and Missouri, and two in Texas. Of these banking centers, 13 locations were leased and 72 were owned.  

Item 3.       LEGAL PROCEEDINGS.

From time to time, we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, results of operations or liquidity.

Item 4.       MINE SAFETY DISCLOSURES.

None.

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PART II

Item 5.       MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Registrant’s Common Equity

Shares of the Company’s common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “NBHC” on September 20, 2012. Prior to September 20, 2012, there was no established public trading market for the Company’s stock. The following table presents the high and low prices of actual transactions in the Company’s common stock and cash dividends paid for the periods indicated:

						Cash
Year	Quarter	High		Low		dividends
2017	Fourth	$	37.08	$	30.33	$	0.09
	Third	$	36.04	$	30.25	$	0.09
	Second	$	33.85	$	30.10	$	0.09
	First	$	34.10	$	30.17	$	0.07
2016	Fourth	$	32.28	$	22.69	$	0.07
	Third	$	24.14	$	19.51	$	0.05
	Second	$	21.64	$	19.17	$	0.05
	First	$	21.40	$	18.41	$	0.05

The closing price of our common stock on the NYSE was $33.42 per share on February 22, 2018. The Company had 217 shareholders of record as of February 22, 2018. Management estimates that the number of beneficial owners is significantly greater.

In October 2012, the Company commenced the payment of a $0.05 per share quarterly cash dividend to holders of its common stock. During the fourth quarter of 2016, the Company increased its cash dividend 40% to $0.07 per share, and during the second quarter of 2017 further increased its dividend 29% to $0.09 per share, for a cumulative increase of 80%. As of December 31, 2017, the quarterly cash dividend is $0.09 per share.

As a bank holding company, any dividends paid to us by our bank subsidiary are subject to various federal and state regulatory limitations and also subject to the ability of our bank subsidiary to pay dividends to us. Other than (1) dividends from the Bank paid as noted above, (2) the cash held by the Company and (3) any future financing at the holding company level, we do not expect to have other liquidity sources at the holding company level. In addition, in the future, we and our bank subsidiary may enter into credit agreements or other financing arrangements that prohibit or otherwise restrict our ability to declare or pay cash dividends. Any determination to pay cash dividends in the future will be at the discretion of our Board of Directors and will depend on a variety of considerations, including, without limitation, our historical and projected financial condition, liquidity and results of operations, capital levels, tax considerations, statutory and regulatory prohibitions and other limitations, general economic conditions and other factors deemed relevant by our Board of Directors. See “Risk Factors—Our ability to pay dividends is subject to regulatory limitations and our bank subsidiary’s ability to pay dividends to us is also subject to regulatory limitations.” During 2017, the Bank paid dividends of $28.9 million to the holding company.

The Company may also execute permanent capital reductions at the Bank level in accordance with federal and state regulatory guidelines as a source of liquidity for the holding company. There were no permanent capital reduction during 2017.

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Performance Graph 

The following graph presents a comparison of the Company’s performance to the indices named below. It assumes $100 invested on December 31, 2012, with dividends invested on a total return basis.

	Period Ending
Index	12/31/12	12/31/13	12/31/14	12/31/15	12/31/16	12/31/17
NBH	100.00	113.86	104.31	116.00	174.77	179.62
KBW Regional Banking Index	100.00	146.83	150.39	159.41	221.77	225.78
Russell 2000 Index	100.00	138.82	145.62	139.19	168.81	193.50

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The following table sets forth information about our repurchases of our common stock during the fourth quarter of 2017:

					Maximum number
				Total number of	(or approximate dollar
				shares (or units)	value) of shares (or
	Total number	Average		purchased as part of	units) that may yet be
	of shares (or	price paid per		publicly announced	purchased under the
Period	units) purchased	share (or unit)		plans or programs	plans or programs (2)
October 1 - October 31, 2017(1)	35,222	$	35.90	—	$	12,562,825
November 1 - November 30, 2017(1)	518		33.28	—		12,562,825
December 1 - December 31, 2017(1)	74		32.76	—		12,562,825
Total	35,814	$	35.85	—	$	12,562,825

(1)	These shares represent shares purchased other than through publicly announced plans and were purchased pursuant to the Company’s stock incentive plans. Pursuant to the plans, shares were purchased from plan participants at the then current market value in satisfaction of stock option exercise prices, settlements of restricted stock and tax withholdings.
(2)	On August 5, 2016, the Company’s Board of Directors authorized the repurchase of up to an additional $50.0 million of common stock. Under this authorization, $12,562,825 remained available for purchase at December 31, 2017.

Securities Authorized for Issuance under Equity Compensation Plans 

During the second quarter of 2014, shareholders approved the 2014 Omnibus Incentive Plan (the “2014 Plan”). Under the 2014 Plan, the Compensation Committee of the Board of Directors has the authority to grant, from time to time, awards of options, stock appreciation rights, restricted stock, restricted stock units, performance units, other stock-based awards, or any combination thereof to eligible persons. As of December 31, 2017, the aggregate number of Company common stock available for issuance under the 2014 Plan was 5,754,830 shares. 

During the second quarter of 2015, shareholders approved the Company’s 2014 Employee Stock Purchase Plan (“ESPP”). The ESPP allows employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year or 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. As of December 31, 2017, the aggregate number of Company common stock available for issuance under the ESPP was 355,159 shares.

See note 15 to the consolidated financial statements for further detail related to these equity compensation plans.

				Number of
	Number of securities to be	Weighted-average		securities remaining
	issued upon exercise of	exercise price of		available for future
	outstanding options,	outstanding options,		issuance under equity
Plan Category	warrants and rights	warrants and rights		compensation plans
Equity plans approved by security holders	1,598,318	$	20.62	6,109,989
Equity plans not approved by security holders	—		—	—
Total	1,598,318	$	20.62	6,109,989

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Item 6.       SELECTED FINANCIAL DATA.

The following table sets forth summary selected historical financial information as of and for the five years ended December 31, 2017. The summary selected historical consolidated financial information set forth below is derived from our audited consolidated financial statements.

The summary unaudited selected historical consolidated financial data set forth below should be read together with our consolidated financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this annual report. Such information is not necessarily indicative of anticipated future results. All amounts are presented in thousands, except share data, or as otherwise noted.

Summary of Selected Historical Consolidated Financial Data

	December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2014		2013
Consolidated Statement of Financial Condition Data:
Cash and cash equivalents	$	257,364	$	152,736	$	166,092	$	256,979	$	189,460
Investment securities available-for-sale (at fair value)		855,345		884,232		1,157,246		1,479,214		1,785,528
Investment securities held-to-maturity		258,730		332,505		427,503		530,590		641,907
Non-marketable securities		15,030		14,949		22,529		27,045		31,663
Loans (1)		3,178,947		2,860,921		2,587,673		2,162,409		1,854,094
Allowance for loan losses		(31,264)		(29,174)		(27,119)		(17,613)		(12,521)
Loans, net		3,147,683		2,831,747		2,560,554		2,144,796		1,841,573
Loans held for sale		4,629		24,187		13,292		5,146		5,787
FDIC indemnification asset, net		—		—		—		39,082		64,447
Other real estate owned		10,491		15,662		20,814		29,120		70,125
Premises and equipment, net		93,708		95,671		103,103		106,341		115,219
Goodwill and other intangible assets, net		61,237		66,579		72,059		76,513		81,859
Other assets		139,248		154,778		140,716		124,820		86,547
Total assets	$	4,843,465	$	4,573,046	$	4,683,908	$	4,819,646	$	4,914,115
Deposits	$	3,979,559	$	3,868,649	$	3,840,677	$	3,766,188	$	3,838,309
Other liabilities		331,499		168,208		225,687		258,883		178,014
Total liabilities		4,311,058		4,036,857		4,066,364		4,025,071		4,016,323
Total shareholders’ equity		532,407		536,189		617,544		794,575		897,792
Total liabilities and shareholders’ equity	$	4,843,465	$	4,573,046	$	4,683,908	$	4,819,646	$	4,914,115

(1) Total loans are net of unearned discounts and deferred fees and costs.

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	As of and for the years ended
	December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2014		2013
Consolidated Statement of Operations Data:
Interest income	$	164,421	$	160,448	$	171,407	$	184,662	$	195,475
Interest expense		18,115		14,808		14,462		14,413		16,514
Net interest income		146,306		145,640		156,945		170,249		178,961
Provision for loan losses		12,972		23,651		12,444		6,209		4,296
Net interest income after provision for loan losses		133,334		121,989		144,501		164,040		174,665
Non-interest income		39,205		40,027		21,448		(1,696)		20,177
Non-interest expense		136,677		136,009		158,024		150,003		183,965
Income before income taxes		35,862		26,007		7,925		12,341		10,877
Income tax expense		21,283		2,947		3,044		3,165		3,950
Net income	$	14,579	$	23,060	$	4,881	$	9,176	$	6,927
Share Information(1):
Income per share, basic	$	0.54	$	0.81	$	0.14	$	0.22	$	0.14
Income per share, diluted	$	0.53	$	0.79	$	0.14	$	0.22	$	0.14
Dividends paid	$	0.34	$	0.22	$	0.20	$	0.20	$	0.20
Book value per share	$	19.81	$	20.32	$	20.34	$	20.43	$	19.99
Tangible common book value per share(2)	$	17.94	$	18.15	$	18.22	$	18.63	$	18.27
Tangible common equity to tangible assets(2)		10.06%		10.61%		11.98%		15.25%		16.97%
Weighted average common shares outstanding, basic		26,928,763		28,313,061		34,349,996		42,404,609		50,790,410
Weighted average common shares outstanding, diluted		27,709,659		29,091,343		34,363,487		42,421,014		50,824,422
Common shares outstanding		26,875,585		26,386,583		30,358,509		38,884,953		44,918,336

(1)

Per share information is calculated based on the aggregate number of our shares of Class A common stock and Class B non-voting common stock outstanding.

(2)

Tangible book value per share and tangible common equity to tangible assets are non-GAAP financial measures. Tangible book value per share is computed as total shareholders’ equity less goodwill (adjusted for deferred taxes) and other intangible assets, net, divided by common shares outstanding at the balance sheet date. For purposes of computing tangible common equity to tangible assets, tangible common equity is calculated as common shareholders’ equity less goodwill (adjusted for deferred taxes) and other intangible assets, net, and tangible assets is calculated as total assets less goodwill (adjusted for deferred taxes) and other intangible assets, net. We believe that the most directly comparable GAAP financial measures are book value per share and total shareholders’ equity to total assets. See the reconciliation under “About Non-GAAP Financial Measures.”

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	As of and for the years ended
	December 31,	December 31,	December 31,	December 31,	December 31,
	2017	2016	2015	2014	2013
Key Ratios
Return on average assets	0.31%	0.50%	0.10%	0.19%	0.13%
Return on average tangible assets(1)	0.38%	0.57%	0.17%	0.26%	0.20%
Return on average tangible assets before provision for loan losses and taxes FTE(1)(9)	1.29%	1.29%	0.60%	0.52%	0.40%
Return on average equity	2.67%	3.95%	0.70%	1.07%	0.67%
Return on average tangible common equity(1)	3.61%	5.04%	1.29%	1.58%	1.06%
Loans to deposits ratio (end of period)	80.00%	74.58%	67.72%	57.55%	48.46%
Average equity to average assets	11.62%	12.55%	14.52%	17.68%	20.07%
Non-interest bearing deposits to total deposits (end of period)	22.68%	21.89%	21.22%	19.45%	17.59%
Net interest margin(3)	3.36%	3.39%	3.54%	3.83%	3.81%
Net interest margin FTE(1)(3)(9)	3.50%	3.49%	3.60%	3.85%	3.81%
Interest rate spread FTE(4)(9)	3.35%	3.38%	3.48%	3.72%	3.68%
Yield on earning assets(2)	3.78%	3.74%	3.86%	4.15%	4.16%
Yield on earning assets FTE(1)(2)(9)	3.91%	3.84%	3.92%	4.17%	4.16%
Cost of interest bearing liabilities(2)	0.56%	0.46%	0.44%	0.45%	0.48%
Cost of deposits	0.41%	0.36%	0.36%	0.37%	0.41%
Non-interest expense to average assets	2.90%	2.92%	3.27%	3.08%	3.55%
Efficiency ratio FTE(1)(5)(9)	68.63%	68.79%	85.55%	85.82%	89.70%
Dividend Payout Ratio	62.96%	52.63%	142.86%	90.91%	142.86%
Asset Quality Data(6)(7)(8)
Non-performing loans to total loans	0.66%	1.07%	0.99%	0.50%	1.31%
Non-performing assets to total loans and OREO	0.99%	1.61%	1.81%	1.86%	4.97%
Allowance for loan losses to total loans	0.98%	1.02%	1.05%	0.81%	0.68%
Allowance for loan losses to non-performing loans	148.88%	94.98%	105.74%	162.89%	51.43%
Net charge-offs to average loans	0.36%	0.80%	0.12%	0.05%	0.41%
Non 310-30 net charge-offs to average non 310-30 loans	0.38%	0.85%	0.13%	0.06%	0.27%

(1)	Ratio represents non-GAAP financial measure. See non-GAAP reconciliation below.
(2)	Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities are excluded from interest-earning assets. Interest bearing liabilities include liabilities that must be paid interest.
(3)	Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(4)	Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.
(5)	The efficiency ratio represents non-interest expense, less intangible asset amortization, as a percentage of net interest income on a FTE basis plus non-interest income.
(6)	Non-performing loans were redefined during the third quarter of 2014 to only include non-accrual loans and restructured loans on non-accrual, and exclude any loans accounted for under ASC 310-30 in which the pool is still performing. All previous periods have been restated.
(7)	Non-performing assets include non-performing loans, other real estate owned and other repossessed assets.
(8)	Total loans are net of unearned discounts and fees.
(9)	Presented on a fully taxable equivalent basis using the statutory rate of 35%. The taxable equivalent adjustments included above are $5,852, $4,081, $2,695, $930 and $0 for the years ended 2017, 2016, 2015, 2014 and 2013, respectively.

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About Non-GAAP Financial Measures

Certain of the financial measures and ratios we present, including “tangible assets,” “return on average tangible assets,” “return on average tangible assets before provision for loan losses and taxes,” “return on average tangible common equity,” “tangible common book value,” “tangible common book value per share,” “tangible common equity,” “tangible common equity to tangible assets,” “adjusted net income,” “adjusted income per share,” and "fully taxable equivalent (FTE)" metrics are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a FTE basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

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A reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures is as follows.

Tangible Common Book Value Ratios

	December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2014		2013
Total shareholders’ equity	$	532,407	$	536,189	$	617,544	$	794,575	$	897,792
Less: goodwill and intangible assets, net		(61,237)		(66,580)		(72,060)		(76,513)		(81,859)
Add: deferred tax liability related to goodwill		10,873		9,323		7,772		6,222		4,671
Tangible common equity (non-GAAP)	$	482,043	$	478,932	$	553,256	$	724,284	$	820,604
Total assets	$	4,843,465	$	4,573,046	$	4,683,908	$	4,819,646	$	4,914,115
Less: goodwill and intangible assets, net		(61,237)		(66,580)		(72,060)		(76,513)		(81,859)
Add: deferred tax liability related to goodwill		10,873		9,323		7,772		6,222		4,671
Tangible assets (non-GAAP)	$	4,793,101	$	4,515,789	$	4,619,620	$	4,749,355	$	4,836,927
Tangible common equity to tangible assets calculations:
Total shareholders' equity to total assets		10.99%		11.72%		13.18%		16.49%		18.27%
Less: impact of goodwill and intangible assets, net		(0.93)%		(1.11)%		(1.20)%		(1.24)%		(1.30)%
Tangible common equity to tangible assets (non-GAAP)		10.06%		10.61%		11.98%		15.25%		16.97%
Tangible common book value per share calculations:
Tangible common equity (non-GAAP)	$	482,043	$	478,932	$	553,256	$	724,284	$	820,604
Divided by: ending shares outstanding		26,875,585		26,386,583		30,358,509		38,884,953		44,918,336
Tangible common book value per share (non-GAAP)	$	17.94	$	18.15	$	18.22	$	18.63	$	18.27
Tangible common book value per share, excluding accumulated other comprehensive income (AOCI) calculations:
Tangible common equity (non-GAAP)	$	482,043	$	478,932	$	553,256	$	724,284	$	820,604
Less: AOCI, net of tax		6,242		1,762		(95)		(5,839)		6,756
Tangible common book value, excluding AOCI, net of tax (non-GAAP)		488,285		480,694		553,161		718,445		827,360
Divided by: ending shares outstanding		26,875,585		26,386,583		30,358,509		38,884,953		44,918,336
Tangible common book value per share, excluding AOCI, net of tax (non-GAAP)	$	18.17	$	18.22	$	18.22	$	18.48	$	18.42

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Return on Average Tangible Assets and Return on Average Tangible Equity

	As of and for the years ended
	December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2014		2013
Net income	$	14,579	$	23,060	$	4,881	$	9,176	$	6,927
Add: impact of core deposit intangible amortization expense, after tax		3,259		3,343		3,295		3,260		3,235
Net income adjusted for impact of core deposit intangible amortization expense, after tax	$	17,838	$	26,403	$	8,176	$	12,436	$	10,162
Income before income taxes FTE (non-GAAP)	$	41,714	$	30,088	$	10,620	$	13,271	$	10,877
Add: impact of core deposit intangible amortization expense, before tax		5,342		5,480		5,401		5,344		5,346
Add: provision for loan losses		12,972		23,651		12,444		6,209		4,296
FTE income adjusted for impact of core deposit intangible amortization expense and provision (non-GAAP)	$	60,028	$	59,219	$	28,465	$	24,824	$	20,519
Average assets	$	4,705,241	$	4,651,953	$	4,831,070	$	4,867,929	$	5,175,210
Less: average goodwill and intangible assets, net of deferred tax liability related to goodwill		(52,958)		(59,977)		(66,549)		(73,074)		(79,964)
Average tangible assets (non-GAAP)	$	4,652,283	$	4,591,976	$	4,764,521	$	4,794,855	$	5,095,246
Average shareholders' equity	$	546,716	$	583,686	$	701,476	$	860,691	$	1,038,753
Less: average goodwill and intangible assets, net of deferred tax liability related to goodwill		(52,958)		(59,977)		(66,549)		(73,074)		(79,964)
Average tangible common equity (non-GAAP)	$	493,758	$	523,709	$	634,927	$	787,617	$	958,789
Return on average assets		0.31%		0.50%		0.10%		0.19%		0.13%
Return on average tangible assets (non-GAAP)		0.38%		0.57%		0.17%		0.26%		0.20%
Return on average tangible assets before provision for loan losses and taxes FTE (non-GAAP)		1.29%		1.29%		0.60%		0.52%		0.40%
Return on average equity		2.67%		3.95%		0.70%		1.07%		0.67%
Return on average tangible common equity (non-GAAP)		3.61%		5.04%		1.29%		1.58%		1.06%

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

	As of and for the years ended
	December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2014		2013
Interest income	$	164,421	$	160,448	$	171,407	$	184,662	$	195,475
Add: impact of taxable equivalent adjustment		5,852		4,081		2,695		930		—
Interest income FTE (non-GAAP)	$	170,273	$	164,529	$	174,102	$	185,592	$	195,475
Net interest income	$	146,306	$	145,640	$	156,945	$	170,249	$	178,961
Add: impact of taxable equivalent adjustment		5,852		4,081		2,695		930		—
Net interest income FTE (non-GAAP)	$	152,158	$	149,721	$	159,640	$	171,179	$	178,961
Average earning assets	$	4,353,320	$	4,290,171	$	4,439,139	$	4,446,903	$	4,698,552
Yield on earning assets		3.78%		3.75%		3.86%		4.15%		4.16%
Yield on earning assets FTE (non-GAAP)		3.91%		3.84%		3.92%		4.17%		4.16%
Net interest margin		3.36%		3.39%		3.54%		3.83%		3.81%
Net interest margin FTE (non-GAAP)		3.50%		3.49%		3.60%		3.85%		3.81%

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Adjusted Financial Results

	As of and for the
	year ended
	December 31, 2017
Adjustments to net income:
Net income	$	14,579
Adjustments (non-GAAP)(1)		20,430
Adjusted net income (non-GAAP)	$	35,009
Adjustments to income per share:
Income per share	$	0.53
Adjustments (non-GAAP)(1)		0.73
Adjusted income per share - diluted (non-GAAP)(1)	$	1.26
Adjustments to return on average tangible assets:
Adjusted net income (non-GAAP)(1)	$	35,009
Add: impact of core deposit intangible amortization expense, after tax		3,259
Net income adjusted for impact of core deposit intangible amortization expense, after tax(1)		38,268
Average tangible assets (non-GAAP)		4,652,283
Adjusted return on average tangible assets (non-GAAP)		0.82%
Adjustments to return on average tangible common equity:
Net income adjusted for impact of core deposit intangible amortization expense, after tax(1)	$	38,268
Average tangible common equity (non-GAAP)		493,758
Adjusted return on average tangible common equity (non-GAAP)		7.75%
(1) Adjustments:
Non-interest expense adjustments:
Acquisition-related	$	2,691
Special bonus accrual		491
Total pre-tax adjustments (non-GAAP)		3,182
Collective tax expense impact		(1,209)
Deferred tax asset re-measurement		18,457
Adjustments (non-GAAP)	$	20,430

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Item 7.       MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management's discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes as of and for the yearsended December 31, 2017, 2016, and 2015, and with the other financial and statistical data presented in this annual report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that may cause actual results to differ materially from management's expectations. Factors that could cause such differences are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” and should be read herewith.

On December 31, 2015, our bank subsidiary converted to a Colorado state-chartered bank and changed its name from NBH Bank, N.A. to NBH Bank. All references to NBH Bank should be considered synonymous with references to NBH Bank, N.A. prior to the conversion and name change.

All amounts are in thousands, except share data, or as otherwise noted.

Overview

Our focus is on building strong banking relationships with small to medium-sized businesses and consumers, while maintaining a low risk profile designed to generate reliable income streams and attractive returns. We have established a solid financial services franchise with a sizable presence for deposit gathering and building client relationships necessary for growth. We believe that our established presence in core markets that are outperforming national averages positions us well for growth opportunities. As of December 31, 2017, we had $4.8 billion in assets, $3.2 billion in loans, $4.0 billion in deposits and $0.5 billion in equity.

Operating Highlights and Key Challenges

Increased profitability and returns

	Net income was $14.6 million, or $0.53 per diluted share, for 2017 compared to net income of $23.1 million, or $0.79 per diluted share, for 2016. Net income during 2017 included a non-cash deferred tax asset re-measurement charge of $18.5 million and $3.2 million in one-time expenses primarily related to the acquisition of Peoples. Adjusting for these items, net income would have been $35.0 million, or $1.26 per diluted share.
	The return on average tangible assets was 0.38% for 2017 compared to 0.57% for 2016. Adjusting for the one-time expense items above, the return on average tangible assets was 0.82% for 2017.
	The return on average tangible common equity was 3.61% for 2017 compared to 5.04% for 2016. Adjusting for the one-time expense items above, the return on average tangible common equity was 7.75% for 2017.

Strategic execution

	Grew non 310-30 loan outstandings to $3.1 billion, an increase of $343.3 million, or 12.6%, since prior year.
	Maintained a conservatively structured loan portfolio represented by diverse industries and concentrations with most industry sector concentrations at 5% or less of total loans and all concentration levels remain well below our self-imposed limits.
	Continued to build and deepen relationships with our clients resulting in strong deposit growth, particularly average demand deposits which grew 7.8%, adjusting for banking center divestitures, since December 31, 2016.
	Maintained strong expense management, decreasing expenses $76 million, or 36%, during the past five years, adjusted for $3.2 million in one-time expenses primarily related to the acquisition of Peoples.
	Completed the acquisition of Peoples on January 1, 2018, which further strengthens the NBH franchise in the attractive and growing markets along the Colorado Front Range and the greater Kansas City region. The transaction is valued at $146.4 million and adds an estimated $868 million in assets, $544 million in loans held for investment and $730 million of low-cost deposits. The aggregate consideration of $146.4 million consists of $36.2 million in cash and the remainder in 3,398,477 share of NBHC common stock. The system conversion for this transaction was completed in the first quarter of 2018.

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Loan portfolio

	Total loans ended the year at $3.2 billion and increased $318.0 million, or 11.1%, since December 31, 2016, driven by new loan originations of $879.2 million, led by commercial and industrial loan originations of $515.4 million.
	Non 310-30 loans increased $343.3 million, or 12.6%, led by commercial and industrial loans increasing 28.0% since December 31, 2016.
	Successfully exited $25.2 million, or 17.3%, of the remaining acquired 310-30 loan portfolio, since December 31, 2016.
	Peoples adds complementary portfolio loans held for investment of an estimated $544 million, represented by diverse industries with all pro-forma concentration levels well below our self-imposed limits.

Credit quality

	Credit quality improved, as 90 days past due and non-accruing loans were 0.69% of total loans at December 31, 2017 compared to 1.13% at December 31, 2016. Non-performing assets to total loans and OREO totaled 0.99% at December 31, 2017 compared to 1.61% at December 31, 2016.
	Net charge-offs on non 310-30 loans totaled 0.38%, or 0.12% excluding the energy portfolio, compared to 0.85% in the prior year, or 0.10% excluding the energy portfolio.
	Provision for loan loss expense on non 310-30  loans totaled $13.1 million compared to $24.5 million in the prior year, a decrease of $11.4 million driven entirely by a reduction in the provision for energy loans.

Client deposit funded balance sheet

	Total deposits averaged $4.0 billion during the fourth quarter of 2017, increasing $273.5 million, or 7.3%, compared to the fourth quarter of 2016, adjusting for the banking center divestitures in the second quarter of 2017.
	Demand deposits averaged $933.7 million during the fourth quarter of 2017 and grew $111.8 million, or 13.6%, compared to the fourth quarter of 2016, adjusting for the banking center divestitures in the second quarter of 2017.
	Transaction deposits increased $263.1 million, or 10.0%, for the fourth quarter of 2017 compared to the fourth quarter of 2016, adjusting for the banking center divestitures in the second quarter of 2017.
	Time deposits averaged $1.1 billion during the fourth quarter of 2017, increasing $10.4 million, compared to the fourth quarter of 2016, on an adjusted basis.
	The mix of transaction deposits to total deposits improved to 71.9% from 69.7% at December 31, 2016.
	Cost of deposits totaled 0.41%, increasing from 0.36% in the prior year, due to higher cost of savings, money market and time deposits.
	Peoples adds low cost deposits of an estimated $730 million, with over 90% in transaction deposits. Pro-forma cost of deposits including Peoples would have been 0.37% during 2017.

Revenues 

	Fully taxable equivalent (FTE) net interest income totaled $152.2 million and increased $2.4 million, or 1.6%.
	The FTE net interest margin widened 0.01% to 3.50% from 2016 as the yield on earning assets increased 0.07%, led by a 0.27% increase in the originated portfolio yields, mostly offset by lower levels of income on high-yielding 310-30 loans and an increase in the cost of deposits of 0.05%.
	Non-interest income totaled $39.2 million, decreasing $0.8 million from prior year due to lower gain on sale of mortgages of $0.7 million from lower volumes.

Expenses

	Non-interest expense totaled $136.7 million, representing an increase of $0.7 million from prior year, due to $3.2 million of one-time expenses primarily related to the Peoples acquisition.
	Income tax expense totaled $21.3 million and included an $18.5 million non-cash one-time charge primarily related to the deferred tax asset re-measurement, partially offset by $4.2 million in tax benefits from stock compensation activity. Without these discrete items, tax expense would have been $7.1 million, an effective tax rate of 19.7%.

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Strong capital position

	Capital ratios are strong as our capital position remains in excess of federal bank regulatory thresholds. As of December 31, 2017, our consolidated tier 1 leverage ratio was 9.8% and our consolidated tier 1 risk-based capital and common equity tier 1 risk-based capital ratios were both 12.9%.
	At December 31, 2017, common book value per share was $19.81, while tangible common book value per share was $17.94 and $18.89 after consideration of the excess accretable yield value of $0.95 per share. The deferred tax re-measurement charge impacted the tangible common book value per share by $0.69.
	Since early 2013, we have repurchased 26.6 million shares, or 50.9% of then outstanding shares, at an attractive weighted average price of $20.03 per share.

Key Challenges

There are a number of significant challenges confronting us and our industry. In our short history, we primarily have acquired distressed financial institutions, and sought to rebuild them and implement operational efficiencies across the enterprise as a whole. We face continual challenges implementing our business strategy, including growing the assets and deposits of our business amidst intense competition, particularly for loans and deposits, low interest rates, changes in the regulatory environment and identifying and consummating disciplined merger and acquisition opportunities in a very competitive environment.

General economic conditions continued to improve in 2017. Residential real estate values have largely recovered from their lows and commercial real estate property fundamentals continued to improve in our markets and nationally across all property types and classes. A significant portion of our loan portfolio is secured by real estate and any deterioration in real estate values or credit quality or elevated levels of non-performing assets would ultimately have a negative impact on the quality of our loan portfolio.

Oil and gas prices began a steep decline in November 2014 and have remained historically low throughout 2017. While there have been job losses related to the energy sector, employment rates and job creation have trended favorably as other industry sectors have offset declines in energy. Nevertheless, the direct impact on the energy sector has been profound and we have experienced credit deterioration and credit losses in our energy loan portfolio. Energy loans comprised only 1.8% of our total loans; however, prolonged or further pricing pressure on oil and gas could lead to additional credit stress in our energy portfolio.

The agriculture industry is in the third year of depressed commodity prices. Our agriculture portfolio is only 4.4% of total loans and is well-diversified across crop and livestock types. We have maintained prudent client selectivity, leading to agriculture clients possessing low leverage and, correspondingly, low bank debt to assets, minimizing any potential credit losses in the future.

Our non 310-30 loans outstanding portfolio at December 31, 2017 totaled $3.1 billion, representing an increase of $343.3 million, or 12.6% compared to December 31, 2016, due to $879.2 million in loan originations, partially offset by loan paydowns and payoffs during 2017. Our acquired loans have produced higher yields than our originated loans, due to accretion of fair value adjustments. During 2017, our weighted average rate on loan originations at the time of origination was 4.10% (fully taxable equivalent), compared to the weighted average yield of our total loan portfolio of 4.71% (fully taxable equivalent) and the weighted average rate on loan originations of 4.06% (fully taxable equivalent) for the year ended December 31, 2017. Downward pressure on the yields of our total loan portfolio will continue to the extent that our originated loan portfolio does not provide sufficient yields to replace the high yields on the acquired loan portfolio as they pay down or pay off. Fully taxable equivalent net interest income reached an inflection point in the second quarter of 2017 and continued during the fourth quarter of 2017 as the yields and volumes of originated loans outpaced the decrease in higher yielding acquired loan balances. The inflection point was driven by both the strong new loan originations as well as the short-term market rate increases in 2017. Future growth in our interest income will ultimately be dependent on our ability to continue to generate sufficient volumes of high-quality originated loans.

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Continued regulation, impending new liquidity and capital constraints, and a continual need to bolster cybersecurity are adding costs and uncertainty to all U.S. banks and could affect profitability. Also, nontraditional participants in the market may offer increased competition as non-bank payment businesses are expanding into traditional banking products. While certain external factors are out of our control and may provide obstacles to our business strategy, we believe that we are prepared to deal with these challenges. We seek to remain flexible, yet methodical and proactive, in our strategic decision making so that we can quickly respond to market changes and the inherent challenges and opportunities that accompany such changes.

Application of Critical Accounting Policies

We use accounting principles and methods that conform to GAAP and general banking practices. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. The most significant of these estimates relate to the accounting for acquired loans and the determination of the ALL. These critical accounting policies and estimates are summarized below, and are further analyzed with other significant accounting policies in note 2 – Summary of Significant Accounting Policies in the notes to our consolidated financial statements for the year ended December 31, 2017.

Accounting for Acquired Loans

Included in our loan portfolio are originated loans and acquired loans. The estimated fair values of acquired loans at the acquisition date are based on a discounted cash flow methodology that considers various factors, including the type of loan or pool of loans with similar characteristics, and related collateral, classification status, fixed or variable interest rate, maturity and any prepayment terms of the loan, whether or not the loan is amortizing, and a discount rate reflecting our assessment of risk inherent in the cash flow estimates. The determination of the fair value of acquired loans takes into account credit quality deterioration and probability of loss, and as a result the related allowance for loan losses is not carried forward at the time of acquisition.

A significant portion of the loans acquired in the Hillcrest Bank, Bank of Choice, and Community Banks of Colorado acquisitions had deteriorated credit quality at the date of acquisition and management accounted for all loans acquired through these acquisitions under ASC 310-30 (with the exception of loans with revolving privileges, which were outside the scope of ASC 310-30). These loans are grouped into pools based on purpose and/or type of loan, geography and risk rating, and take into account the sources of repayment and collateral. Each pool is accounted for as a single loan for which the integrity is maintained throughout the life of the asset. When a pool exhibits evidence of credit deterioration since origination and it is probable at the date of acquisition that we will not collect all principal and interest payments in accordance with the terms of the loan agreement, the expected shortfall in the expected future cash flows compared to the contractual amount due is recognized as a non-accretable difference. Any excess of the expected future cash flows over the acquisition date fair value is known as the accretable discount, or accretable yield, and through accretion is recognized as interest income over the remaining life of the respective pool. Contractual fees not expected to be collected are not included in ASC 310-30 contractual cash flows. Should fees be subsequently collected, the cash flows are accounted for as non 310-30 fee income in the period they are received. Loans that meet the criteria for non-accrual of interest at the time of acquisition may be considered performing at and subsequent to acquisition, regardless of whether the client is contractually delinquent, if the timing and expected cash flows on such loans can be reasonably estimated and if collection of the new carrying value of such loans is expected.  If the timing and expected cash flows of a pool cannot be reasonably estimated, that pool may be placed on non-accrual status, the accretion of income will cease, and interest income will be recognized on a cash basis. In addition, a pool will be accounted for on a cash basis to the extent the remaining discount on the pool is equal its unpaid principal balance.

Loan pools accounted for under ASC 310-30 are periodically remeasured to determine expected future cash flows. In determining the expected cash flows, we evaluate the credit profile, contractual interest rates, collateral values and expected prepayments of the loan pools. Prepayment assumptions are based on statistical models that take into account factors such as the loan interest rate, credit profile of the borrowers, the years in which the loans were originated, and whether the loans were fixed or variable rate loans. Decreases to the expected future cash flows in the applicable pool generally result in an immediate provision for loan losses charged to the consolidated statements of operations. Conversely, subsequent increases in

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the expected future cash flows result in a transfer from the non-accretable difference to the accretable yield, which is then accreted as a yield adjustment over the remaining life of the pool once any previously recorded impairment expense has been recouped. These cash flow estimations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

Loans outside the scope of ASC 310-30 are accounted for under ASC Topic 310, Receivables. Discounts created when the loans are recorded at their estimated fair values at acquisition are accreted over the remaining life of the loan as an adjustment to the respective loan’s yield. Similar to originated loans, the accrual of interest income is discontinued on acquired loans that are not accounted for under ASC 310-30 when the collection of principal or interest, in whole or in part, is doubtful. Interest is not accrued on loans 90 days or more past due unless they are well secured and in the process of collection.

Allowance for Loan Losses

The determination of the ALL, which represents management’s estimate of probable losses inherent in our loan portfolio at the balance sheet date, including acquired loans to the extent necessary, involves a high degree of judgment and complexity. The determination of the ALL takes into consideration, among other matters, the estimated fair value of the underlying collateral, economic conditions, particularly as such conditions relate to the market areas in which we operate, historical net loan losses and other factors that warrant recognition. Any change in these factors, or the rise of any other factors that we, or our regulators, may deem necessary to consider when estimating the ALL, may materially affect the ALL and provisions for loan losses. For further discussion of the ALL, see “—Financial Condition—Asset Quality” and “—Financial Condition—Allowance for Loan Losses” and notes 2 and 7 to our consolidated financial statements.

Financial Condition

Total assets increased to $4.8 billion at December 31, 2017 from $4.6 billion at December 31, 2016. Total loans were $3.2 billion at December 31, 2017, and grew $318.0 million, or 11.1% from December 31, 2016. Non 310-30 loan outstandings totaled $3.1 billion and increased $343.3 million, or 12.6%, from December 31, 2016. We originated $879.2 million of loans during 2017, led by commercial and industrial originations of $515.4 million. The acquired 310-30 loan portfolio declined $25.2 million, or 17.3%, from December 31, 2016. Cash and cash equivalents totaled $257.4 million and increased $104.6 million, or 68.5%, from December 31, 2016 due to strong deposit balances. The investment securities portfolio decreased $102.6 million, or 8.4%, to $1.1 billion at December 31, 2017, due to paydowns within the portfolio.  OREO decreased $5.2 million or 33.0%, as we continue to resolve problem assets. During 2017, lower cost demand, savings, and money market ("transaction") deposits increased $164.9 million, or 6.1%, excluding the four banking center divestitures during the second quarter of 2017, while time deposits decreased $54.0 million, or 4.6%, as we continued to focus on developing long-term banking relationships with clients.

Investment Securities

Available-for-sale

Total investment securities available-for-sale were $855.3 million at December 31, 2017, compared to $884.2 million at December 31, 2016, a decrease of $28.9 million, or 3.3%. During 2017 and 2016, maturities and pay downs of available-for-sale securities totaled $224.3 million and $275.5 million, respectively. Purchases of available-for-sale securities during 2017 and 2016 totaled $202.7 million and $4.9 million, respectively.

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Our available-for-sale investment securities portfolio is summarized as follows for the periods indicated:

	December 31, 2017						December 31, 2016
						Weighted						Weighted
	Amortized		Fair		Percent of	average	Amortized		Fair		Percent of	average
	cost		value		portfolio	yield	cost		value		portfolio	yield
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	167,269	$	168,648	19.8%	2.39%	$	223,781	$	227,160	25.8%	2.31%
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		702,107		685,230	80.1%	1.93%		666,616		652,739	73.8%	1.71%
Municipal securities		1,054		1,048	0.1%	2.60%		3,921		3,914	0.4%	3.34%
Other securities		419		419	0.0%	0.00%		419		419	0.0%	0.00%
Total investment securities available-for-sale	$	870,849	$	855,345	100.0%	2.02%	$	894,737	$	884,232	100.0%	1.86%

As of December 31, 2017 and 2016, generally the entire available-for-sale investment portfolio was backed by mortgages. The residential mortgage pass-through securities portfolio is comprised of both fixed rate and adjustable rate Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Government National Mortgage Association (“GNMA”) securities. The other mortgage-backed securities are comprised of securities backed by FHLMC, FNMA and GNMA securities.

At December 31, 2017 and 2016, adjustable rate securities comprised 4.9% and 6.7%, respectively, of the available-for-sale MBS portfolio. The remainder of the portfolio was comprised of fixed rate amortizing securities with 10 to 30 year contractual maturities, with a weighted average coupon of 2.18% per annum and 1.97% per annum at December 31, 2017 and 2016, respectively.

The available-for-sale investment portfolio included $18.2 million and $16.5 million of gross unrealized losses at December 31, 2017 and 2016, respectively, which were partially offset by $2.7 million and $6.0 million of gross unrealized gains, respectively. We believe any unrecognized losses are a result of prevailing interest rates, and as such, we do not believe that any of the securities with unrealized losses were other-than-temporarily-impaired.

Held-to-maturity

At December 31, 2017, we held $258.7 million of held-to-maturity investment securities, compared to $332.5 million at December 31, 2016, a decrease of $73.8 million, or 22.2%. The Company did not purchase any held-to-maturity securities during 2017 or 2016. 

Held-to-maturity investment securities are summarized as follows as of the date indicated:

	December 31, 2017						December 31, 2016
						Weighted						Weighted
	Amortized		Fair		Percent of	average	Amortized		Fair		Percent of	average
	cost		value		portfolio	yield	cost		value		portfolio	yield
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	204,352	$	204,048	79.0%	3.23%	$	263,411	$	264,862	79.2%	3.24%
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		54,378		52,723	21.0%	1.66%		69,094		67,711	20.8%	1.68%
Total investment securities held-to-maturity	$	258,730	$	256,771	100.0%	2.90%	$	332,505	$	332,573	100.0%	2.91%

The residential mortgage pass-through and other residential MBS held-to-maturity investment portfolios are comprised of fixed rate FHLMC, FNMA and GNMA securities.

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The fair value of the held-to-maturity investment portfolio was $256.8 million and $332.6 million, at December 31, 2017 and 2016, respectively, and included $2.0 million of net unrealized losses and $0.1 million of net unrealized gains for the respective periods.

Loans Overview

At December 31, 2017, our loan portfolio was comprised of new loans that we have originated and loans that were acquired in connection with our five acquisitions to date. As discussed in note 2 to our consolidated financial statements, in accordance with applicable accounting guidance, all acquired loans are recorded at fair value at the date of acquisition, and an allowance for loan losses is not carried over with the loans but, rather, the fair value of the loans encompasses both credit quality and contractual interest rate considerations. Loans that exhibit signs of credit deterioration at the date of acquisition are accounted for in accordance with the provisions of ASC 310-30.  Management accounted for all loans acquired in the Hillcrest Bank, Bank of Choice and Community Banks of Colorado acquisitions under ASC 310-30, with the exception of loans with revolving privileges, which were outside the scope of ASC 310-30. In our Bank Midwest transaction, we did not acquire all of the loans of the former Bank Midwest but, rather, selected certain loans based upon specific criteria of performance, adequacy of collateral, and loan type that were performing at the time of acquisition. As a result, none of the loans acquired in the Bank Midwest transaction are accounted for under ASC 310-30. None of the loans acquired in the Pine River transaction are accounted for under ASC 310-30.

The table below shows the loan portfolio composition and the breakout of the portfolio between ASC 310-30 loans and non 310-30 loans at the respective dates:

					2017 vs 2016
	December 31, 2017		December 31, 2016		% Change
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,376,022	$	1,074,696	28.0%
Owner occupied commercial real estate		272,753		221,544	23.1%
Agriculture		138,895		134,637	3.2%
Energy		57,460		90,273	(36.3)%
Total commercial		1,845,130		1,521,150	21.3%
Commercial real estate non-owner occupied		485,141		437,642	10.9%
Residential real estate		703,478		728,361	(3.4)%
Consumer		24,575		27,916	(12.0)%
Total loans excluded from ASC 310-30		3,058,324		2,715,069	12.6%
Loans accounted for under ASC 310-30:
Commercial		29,475		39,280	(25.0)%
Commercial real estate non-owner occupied		77,908		89,150	(12.6)%
Residential real estate		12,759		16,524	(22.8)%
Consumer		481		898	(46.4)%
Total loans accounted for under ASC 310-30		120,623		145,852	(17.3)%
Total loans	$	3,178,947	$	2,860,921	11.1%

Our loan portfolio totaled $3.2 billion at December 31, 2017, increasing 318.0 million, or 11.1%, year-over-year on the strength of $879.2 million in loan originations between the two periods. The strong originations were the result of continued market penetration. Non 310-30 loan outstandings totaled $3.1 billion representing an increase of $343.3 million, or 12.6%, year-over-year, led by a 21.3% increase in total commercial loans. The acquired 310-30 loan portfolio declined $25.2 million, or 17.3%, from December 31, 2016.

We have successfully generated new relationships with small to medium-sized businesses and consumers, experiencing particularly strong loan growth in our commercial and industrial portfolio, which at December 31, 2017, was comprised of diverse industry segments. These segments included public administration-related loans of $396.3 million, finance and insurance-related loans of $263.9 million, health care related loans of $143.3 million, manufacturing-related loans of $88.2 million, and a variety of smaller subcategories of commercial and industrial loans.

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Non-owner occupied CRE loans were 111.0% of the Company’s risk based capital, or 17.5% of total loans, and no specific property type comprised more than 5.0% of total loans. The Company maintains very little exposure to retail properties, comprising just 2.3% of total loans. Multi-family loans totaled $26.9 million, or less than 1.0% of total loans as of December 31, 2017. Agriculture loans were 29.5% of the Company’s risk based capital and 4.4% of total loans, and are well-diversified across crop and livestock types.

The table below shows the geographic breakout of our loan portfolio at December 31, 2017 and 2016, based on the domicile of the borrower or, in the case of collateral-dependent loans, the geographical location of the collateral:

	December 31, 2017			December 31, 2016
			Percent of			Percent of
	Loan balance		loan portfolio	Loan balance		loan portfolio
Colorado	$	1,343,144	42.3%	$	1,188,155	41.5%
Missouri		577,887	18.2%		595,964	20.8%
Texas		331,003	10.4%		296,539	10.4%
Kansas		247,969	7.8%		245,059	8.6%
New York		90,730	2.8%		—	0.0%
California		89,560	2.8%		90,643	3.2%
Other		498,654	15.7%		444,561	15.5%
Total	$	3,178,947	100.0%	$	2,860,921	100.0%

New loan origination is a direct result of our ability to recruit and retain top banking talent, connect with clients in our markets and provide needed services at competitive rates. Loan originations totaled $879.2 million over the past twelve months, led by commercial and industrial loan originations of $515.4 million. Originations are defined as closed end funded loans and revolving lines of credit advances, net of any current period paydowns. Management utilizes this more conservative definition of originations to better approximate the impact of originations on loans outstanding and ultimately net interest income. The following tables represent new loan originations during 2017 and 2016:

	Fourth quarter		Third quarter		Second quarter		First quarter		Total
	2017		2017		2017		2017		2017
Commercial:
Commercial and industrial	$	167,699	$	73,917	$	159,340	$	114,414	$	515,370
Owner occupied commercial real estate		8,937		32,787		6,899		16,988		65,611
Agriculture		14,050		3,335		16,696		(3,644)		30,437
Energy		(8,121)		(6,993)		9,120		(81)		(6,075)
Total commercial		182,565		103,046		192,055		127,677		605,343
Commercial real estate non-owner occupied		21,323		46,654		47,312		36,962		152,251
Residential real estate		25,995		28,471		26,979		29,616		111,061
Consumer		1,815		3,122		3,233		2,378		10,548
Total	$	231,698	$	181,293	$	269,579	$	196,633	$	879,203

Included in originations are net fundings under revolving lines of credit of $65,686, $(12,804), $68,305 and $33,397 as of the fourth quarter 2017, third quarter 2017, second quarter 2017 and first quarter 2017, respectively.  

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	Fourth quarter		Third quarter		Second quarter		First quarter		Total
	2016		2016		2016		2016		2016
Commercial:
Commercial and industrial	$	109,670	$	92,433	$	142,179	$	59,361	$	403,643
Owner occupied commercial real estate		18,606		19,091		17,883		10,399		65,979
Agriculture		18,480		9,589		18,072		10,375		56,516
Energy		4,433		(1,251)		(17,328)		(13,984)		(28,130)
Total Commercial		151,189		119,862		160,806		66,151		498,008
Commercial real estate non-owner occupied		30,227		54,456		89,109		44,876		218,668
Residential real estate		89,968		102,703		63,815		49,722		306,208
Consumer		3,566		4,995		3,158		2,671		14,390
Total	$	274,950	$	282,016	$	316,888	$	163,420	$	1,037,274

Included in originations are net fundings under revolving lines of credit of $18,670, $26,959,  $85,345 and $9,565 as of the fourth quarter 2016, third quarter 2016, second quarter 2016 and first quarter 2016, respectively. Residential real estate loan originations decreased $195.1 million during 2017 when compared to 2016, due to the Company no longer including loans held for sale in its definition of originated.

The tables below show the contractual maturities of our loans for the dates indicated:

	December 31, 2017
	Due within		Due after 1 but		Due after
	1 year		within 5 years		5 years		Total
Commercial:
Commercial and industrial	$	83,314	$	551,567	$	745,746	$	1,380,627
Owner occupied commercial real estate		18,044		115,421		156,306		289,771
Agriculture		14,513		102,390		29,845		146,748
Energy		25,970		31,489		—		57,459
Total commercial		141,841		800,867		931,897		1,874,605
Commercial real estate non-owner occupied		118,980		316,242		127,827		563,049
Residential real estate		6,820		38,824		670,593		716,237
Consumer		5,909		15,014		4,133		25,056
Total loans	$	273,550	$	1,170,947	$	1,734,450	$	3,178,947

	December 31, 2016
	Due within		Due after 1 but		Due after
	1 year		within 5 years		5 years		Total
Commercial:
Commercial and industrial	$	68,485	$	455,444	$	559,421	$	1,083,350
Owner occupied commercial real estate		18,887		92,739		131,434		243,060
Agriculture		22,146		92,269		29,332		143,747
Energy		18,840		71,433		—		90,273
Total commercial		128,358		711,885		720,187		1,560,430
Commercial real estate non-owner occupied		126,784		279,135		120,873		526,792
Residential real estate		9,554		35,506		699,825		744,885
Consumer		5,529		18,164		5,121		28,814
Total loans	$	270,225	$	1,044,690	$	1,546,006	$	2,860,921

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The stated interest rate (which excludes the effects of non-refundable loan origination and commitment fees, net of costs and the accretion of fair value marks) of non 310-30 loans with maturities over one year is as follows at the dates indicated:

	December 31, 2017
	Fixed			Variable			Total
			Weighted			Weighted			Weighted
	Balance		average rate	Balance		average rate	Balance		average rate
Commercial
Commercial and industrial(1)	$	696,224	3.34%	$	597,253	4.14%	$	1,293,477	3.71%
Owner occupied commercial real estate		125,821	4.20%		133,408	4.26%		259,229	4.39%
Agriculture		35,605	4.70%		89,487	4.42%		125,092	4.50%
Energy		132	4.37%		31,357	4.57%		31,489	4.57%
Total commercial		857,782	3.57%		851,505	4.20%		1,709,287	3.89%
Commercial real estate non-owner occupied		161,846	4.42%		237,772	4.46%		399,618	4.44%
Residential real estate		372,104	3.40%		325,227	3.94%		697,331	3.65%
Consumer		15,883	4.68%		2,805	4.59%		18,688	4.67%
Total loans with > 1 year maturity	$	1,407,615	3.64%	$	1,417,309	4.19%	$	2,824,924	3.91%

	December 31, 2016
	Fixed			Variable			Total
			Weighted			Weighted			Weighted
	Balance		average rate	Balance		average rate	Balance		average rate
Commercial
Commercial and industrial(1)	$	544,464	3.25%	$	464,713	3.80%	$	1,009,177	3.50%
Owner occupied commercial real estate		114,513	4.13%		92,535	4.32%		207,048	4.41%
Agriculture		41,373	4.62%		72,140	3.68%		113,513	4.02%
Energy		7,174	0.93%		64,259	3.60%		71,433	3.05%
Total commercial		707,524	3.46%		693,647	3.84%		1,401,171	3.65%
Commercial real estate non-owner occupied		136,965	4.51%		221,527	3.65%		358,492	3.98%
Residential real estate		402,616	3.37%		316,784	3.73%		719,400	3.53%
Consumer		19,127	4.49%		3,395	4.06%		22,522	4.42%
Total loans with > 1 year maturity	$	1,266,232	3.56%	$	1,235,353	3.78%	$	2,501,585	3.67%

(1) Included in commercial fixed rate loans are loans totaling $417,660 and $313,000 as of December 31, 2017 and 2016, respectively, that have been swapped to variable rates at current market pricing. Included in the commercial segment are tax exempt loans totaling $617,889 and $384,641 with a weighted average rate of 3.15% and 3.01% at December 31, 2017 and 2016, respectively.

Accretable Yield

At December 31, 2017, the accretable yield balance was $46.6 million compared to $60.5 million at December 31, 2016. We re-measure the expected cash flows quarterly for all 25 remaining loan pools accounted for under ASC 310-30 utilizing the same cash flow methodology used at the time of acquisition. This re-measurement resulted in a net $8.6 million and $9.5 million reclassification from non-accretable difference to accretable yield during 2017 and 2016, respectively. 

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In addition to the accretable yield on loans accounted for under ASC 310-30, the fair value adjustments on loans outside the scope of ASC 310-30 are also accreted to interest income over the life of the loans. Total remaining accretable yield and fair value mark was as follows for the dates indicated:

	December 31, 2017		December 31, 2016
Remaining accretable yield on loans accounted for under ASC 310-30	$	46,568	$	60,476
Remaining accretable fair value mark on loans not accounted for under ASC 310-30		1,771		3,236
Total remaining accretable yield and fair value mark	$	48,339	$	63,712

Asset Quality

All of the assets acquired in our acquisitions were marked to fair value at the date of acquisition, and the fair value adjustments to loans included a credit quality component. We utilize traditional credit quality metrics to evaluate the overall credit quality of our loan portfolio; however, our credit quality ratios are somewhat limited in their comparability to industry averages or to other financial institutions because of the percentage of acquired problem loans and given that any asset quality deterioration that existed at the date of acquisition was considered in the original fair value adjustments.

Asset quality is fundamental to our success and remains a strong point, driven by our disciplined adherence to out self-imposed concentration limits across industry sector and real estate property type. Accordingly, for the origination of loans, we have established a credit policy that allows for responsive, yet controlled lending with credit approval requirements that are scaled to loan size. Within the scope of the credit policy, each prospective loan is reviewed in order to determine the appropriateness and the adequacy of the loan characteristics and the security or collateral prior to making a loan. We have established underwriting standards and loan origination procedures that require appropriate documentation, including financial data and credit reports. For loans secured by real property, we require property appraisals, title insurance or a title opinion, hazard insurance and flood insurance, in each case where appropriate.

Additionally, we have implemented procedures to timely identify loans that may become problematic in order to ensure the most beneficial resolution to the Company. Asset quality is monitored by our credit risk management department and evaluated based on quantitative and subjective factors such as the timeliness of contractual payments received. Additional factors that are considered, particularly with commercial loans over $500,000, include the financial condition and liquidity of individual borrowers and guarantors, if any, and the value of our collateral. To facilitate the oversight of asset quality, loans are categorized based on the number of days past due and on an internal risk rating system, and both are discussed in more detail below.

Our internal risk rating system uses a series of grades which reflect our assessment of the credit quality of loans based on an analysis of the borrower's financial condition, liquidity and ability to meet contractual debt service requirements. Loans that are perceived to have acceptable risk are categorized as “Pass” loans. “Special mention” loans represent loans that have potential credit weaknesses that deserve close attention. Special mention loans include borrowers that have potential weaknesses or unwarranted risks that, unless corrected, may threaten the borrower's ability to meet debt service requirements. However, these borrowers are still believed to have the ability to respond to and resolve the financial issues that threaten their financial situation. Loans classified as “Substandard” have a well-defined credit weakness and are inadequately protected by the current paying capacity of the obligor or of the collateral pledged, if any. Although these loans are identified as potential problem loans, they may never become non-performing. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. “Doubtful” loans are loans that management believes that collection of payments in accordance with the terms of the loan agreement are highly questionable and improbable. Doubtful loans are deemed impaired and put on non-accrual status.

Non 310-30 special mention loans increased $12.5 million from December 31, 2016 due to upgrades from substandard and doubtful within the commercial and industrial sector and downgrades from pass within the commercial and industrial sector, partially offset by payoffs in the commercial and industrial and owner-occupied commercial real estate sectors. Non 310-30 substandard loans decreased $23.3 million from December 31, 2016 primarily due to paydowns and upgrades to special mention and pass within the commercial and industrial, owner-occupied commercial real estate and energy sectors. Non 310-30 doubtful loans decreased $3.9 million from December 31, 2016 due to energy loan charge-offs during the period. At December 31, 2017 there is one substandard commercial real estate non-owner occupied loan with an unpaid principal

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balance of $24.9 million within a pool accounted for under ASC 310-30 that is being actively worked out and may transfer to OREO in 2018.

In the event of borrower default, we may seek recovery in compliance with state lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying or restructuring a loan from its original terms, for economic or legal reasons, to provide a concession to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Such restructured loans are considered “troubled debt restructurings” or "TDRs" in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Under this guidance, modifications to loans that fall within the scope of ASC 310-30 are not considered troubled debt restructurings, regardless of otherwise meeting the definition of a troubled debt restructuring. Assets that have been foreclosed on or acquired through deed-in-lieu of foreclosure are classified as OREO until sold, and are carried at the lower of the related loan balance or the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ALL and any subsequent declines in carrying value charged to impairments on OREO.

Non-performing Assets

Non-performing assets consist of non-accrual loans, troubled debt restructurings on non-accrual, OREO and other repossessed assets. Non-accrual loans and troubled debt restructurings on non-accrual accounted for under ASC 310-30, as described below, may be excluded from our non-performing assets to the extent that the cash flows of the loan pools are still estimable. During the third quarter of 2014, we revised our definition of non-performing assets and non-performing loans to exclude accruing loans 90 days past due and accruing troubled debt restructurings to more accurately align the financial metrics related to non-performing assets and non-performing loans with our financial results. Prior period information has been modified for this revision. Interest income that would have been recorded had non-accrual loans performed in accordance with their original contract terms during 2017, 2016 and 2015 was $1.5 million, $2.6 million and $1.4 million, respectively.

All loans accounted for under ASC 310-30 were classified as performing assets at December 31, 2017, as the future cash flows on the loan pools were considered estimable. While individual loans making up the pools may be accounted for on a cost recovery basis, the cash flows on the loan pools are considered estimable and, therefore, interest income, through accretion of the difference between the carrying value of the loans in the pool and the pool's expected future cash flows, is being recognized on all acquired loan pools accounted for under ASC 310-30.

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The following table sets forth the non-performing assets as of the dates presented:

	December 31, 2017		December 31, 2016		December 31, 2015		December 31, 2014		December 31, 2013
Non-accrual loans:
Commercial:
Commercial and industrial	$	3,747	$	1,160	$	942	$	221	$	15,572
Owner occupied commercial real estate		3,336		2,054		954		385		467
Agriculture		2,003		297		1,904		130		153
Energy		—		6,517		—		—		—
Total commercial		9,086		10,028		3,800		736		16,192
Commercial real estate non-owner occupied		784		66		407		222		1,131
Residential real estate		3,846		3,875		3,617		2,845		3,437
Consumer		29		40		30		37		10
Total non-accrual loans, excluding restructured loans		13,745		14,009		7,854		3,840		20,770
Restructured loans on non-accrual:
Commercial:
Commercial and industrial		4,020		7,527		3,888		3,994		535
Owner occupied commercial real estate		143		2		319		458		225
Agriculture		—		1,608		81		365		—
Energy		1,645		6,128		12,009		—		—
Total commercial		5,808		15,265		16,297		4,817		760
Commercial real estate non-owner occupied		—		—		815		—		169
Residential real estate		1,336		1,301		679		1,966		2,408
Consumer		111		142		2		190		237
Total restructured loans on non-accrual		7,255		16,708		17,793		6,973		3,574
Total non-performing loans		21,000		30,717		25,647		10,813		24,344
OREO		10,491		15,662		20,814		29,120		70,125
Other repossessed assets		—		—		894		849		1,086
Total non-performing assets	$	31,491	$	46,379	$	47,355	$	40,782	$	95,555
Loans 90 days or more past due and still accruing interest	$	150	$	—	$	166	$	263	$	129
Accruing restructured loans	$	8,461	$	5,766	$	8,403	$	19,275	$	11,605
ALL	$	31,264	$	29,174	$	27,119	$	17,613	$	12,521
Total non-performing loans to total loans		0.66%		1.07%		0.99%		0.50%		1.31%
Loans 90 days or more past due and still accruing interest to total loans		0.00%		0.00%		0.01%		0.01%		0.01%
Total non-performing assets to total loans and OREO		0.99%		1.61%		1.81%		1.86%		4.97%
ALL to non-performing loans		148.88%		94.98%		105.74%		162.89%		51.43%

During 2017, total non-performing loans decreased $9.7 million, or 31.6%, from December 31, 2016 due to charge-offs of two energy loans totaling $7.5 million and one commercial and industrial loan totaling $2.5 million. In addition, one previously identified energy loan of $2.2 million at December 31, 2017 was placed back on accrual during the third quarter of 2017. These decreases were offset by one commercial and industrial loan totaling $3.7 million placed on non-accrual during the fourth quarter of 2017. During 2017, accruing TDRs increased $2.7 million primarily due to increases in the commercial

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segment totaling $3.3 million, partially offset by decreases of $0.5 million in the residential real estate segment. During 2017, $1.8 million of loans were foreclosed or otherwise repossessed and transferred to OREO and $10.4 million of OREO was sold resulting in a net gain of $4.2 million. OREO write-downs of $0.8 million were recorded during 2017.

Total non-performing assets to total loans and OREO was 0.99% and 1.61% at December 31, 2017 and 2016, respectively. Included in this ratio at December 31, 2017 are acquired non-performing loans and OREO of 0.46% compared to 0.71% at December 31, 2016. Acquired OREO has been a source of income for the Company as net OREO gains totaled $4.2 million and $4.4 million for the years ended December 31, 2017 and 2016, respectively. In addition, the ratio includes 0.05% and 0.44% of non-performing energy loans at December 31, 2017 and 2016, respectively. The remaining non-performing assets to total loans and OREO was 0.48% at December 31, 2017 and 0.46% and December 31, 2016.

The following table represents the carrying value of our accruing and non-accrual loans compared to the unpaid principal balance ("UPB") as of December 31, 2017:

	Accruing					Non-accrual					Total
	Unpaid				Carrying	Unpaid				Carrying	Unpaid				Carrying
	principal		Carrying		value/	principal		Carrying		value/	principal		Carrying		value/
	balance		value		UPB	balance		value		UPB	balance		value		UPB
Non ASC 310-30 loans
Commercial:
Commercial and industrial	$	1,368,740	$	1,368,255	99.9%	$	11,678	$	7,767	66.5%	$	1,380,418	$	1,376,022	99.7%
Owner occupied commercial real estate		270,039		269,275	99.7%		3,745		3,478	92.9%		273,784		272,753	99.6%
Agriculture		137,353		136,892	99.7%		2,041		2,003	98.1%		139,394		138,895	99.6%
Energy		56,267		55,815	99.2%		6,269		1,645	26.2%		62,536		57,460	91.9%
Total commercial		1,832,399		1,830,237	99.9%		23,733		14,893	62.8%		1,856,132		1,845,130	99.4%
Commercial real estate non-owner occupied		486,154		484,357	99.6%		830		784	94.5%		486,984		485,141	99.6%
Residential real estate		699,305		698,295	99.9%		6,031		5,183	85.9%		705,336		703,478	99.7%
Consumer		24,435		24,435	100.0%		145		140	96.6%		24,580		24,575	99.9%
Total non ASC 310-30 loans		3,042,293		3,037,324	99.8%		30,739		21,000	68.3%		3,073,032		3,058,324	99.5%
ASC 310-30 loans
Commercial		42,468		29,475	69.4%		—		—	0.0%		42,468		29,475	69.4%
Commercial real estate non-owner occupied		83,753		77,908	93.0%		—		—	0.0%		83,753		77,908	93.0%
Residential real estate		18,728		12,759	68.1%		—		—	0.0%		18,728		12,759	68.1%
Consumer		3,575		481	13.5%		—		—	0.0%		3,575		481	13.5%
Total loans accounted for under ASC 310-30		148,524		120,623	81.2%		—		—	0.0%		148,524		120,623	81.2%
Total loans	$	3,190,817	$	3,157,947	99.0%	$	30,739	$	21,000	68.3%	$	3,221,556	$	3,178,947	98.7%

Past Due Loans

Past due status is monitored as an indicator of credit deterioration. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans that are 90 days or more past due and not accounted for under ASC 310-30 are put on non-accrual status unless the loan is well secured and in the process of collection. The table below shows the past due status of loans not accounted for under ASC 310-30, based on contractual terms of the loans as of December 31, 2017 and 2016:  

	December 31, 2017		December 31, 2016
Loans 30-89 days past due and still accruing interest	$	3,681	$	2,296
Loans 90 days past due and still accruing interest		150		—
Non-accrual loans		21,000		30,717
Total past due and non-accrual loans	$	24,831	$	33,013
Total 90 days past due and still accruing interest and non-accrual loans to total non 310-30 loans		0.69%		1.13%
Total non-accrual loans to total non 310-30 loans		0.69%		1.13%
% of total past due and non-accrual loans that carry fair value marks		14.66%		10.75%

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Loans 30-89 days past due and still accruing interest increased $1.4 million from December 31, 2016 to December 31, 2017 and loans 90 days or more past due and still accruing interest increased $0.2 million from December 31, 2016 to December 31, 2017, for a collective increase in total past due loans of $1.6 million. Non-accrual loans decreased $9.7 million at December 31, 2017 compared to December 31, 2016, further described within the Non-Performing Assets discussion of Management’s Discussion and Analysis. There were no ASC 310-30 loan pools past due or on non-accrual at December 31, 2017 or 2016.  

Allowance for Loan Losses

The ALL represents the amount that we believe is necessary to absorb probable losses inherent in the loan portfolio at the balance sheet date and involves a high degree of judgment and complexity. Determination of the ALL is based on an evaluation of the collectability of loans, the realizable value of underlying collateral, economic conditions, historical net loan losses, the estimated loss emergence period, estimated default rates, any declines in cash flow assumptions from acquisition, loan structures, growth factors and other elements that warrant recognition and, to the extent applicable, prior loss experience. The ALL is critical to the portrayal and understanding of our financial condition, liquidity and results of operations. The determination and application of the ALL accounting policy involves judgments, estimates, and uncertainties that are subject to change. Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on our financial condition, liquidity or results of operations.

In accordance with the applicable guidance for business combinations, acquired loans were recorded at their acquisition date fair values, which were based on expected future cash flows and included an estimate for future loan losses; therefore, no ALL was recorded as of the acquisition date. Any estimated losses on acquired loans that arise after the acquisition date are reflected in a charge to the provision for loan losses on the consolidated statements of operations.

Loans accounted for under the accounting guidance provided in ASC 310-30 have been grouped into pools based on the predominant risk characteristics of purpose and/or type of loan. The timing and receipt of expected principal, interest and any other cash flows of these loans are periodically remeasured and the expected future cash flows of the collective pools are compared to the carrying value of the pools. To the extent that the expected future cash flows of each pool is less than the book value of the pool, an allowance for loan losses will be established through a charge to the provision for loan losses. If the remeasured expected future cash flows are greater than the book value of the pools, then the improvement in the expected future cash flows is accreted into interest income over the remaining expected life of the loan pool. During 2017 and 2016, these re-measurements resulted in overall increases in expected cash flows in certain loan pools, which, absent previous valuation allowances within the same pool, are reflected in increased accretion as well as an increased amount of accretable yield and are recognized over the expected remaining lives of the underlying loans as an adjustment to yield.

For all loans not accounted for under ASC 310-30, the determination of the ALL follows a process to determine the appropriate level of ALL that is designed to account for changes in credit quality and other risk factors. This process provides an ALL consisting of a specific allowance component based on certain individually evaluated loans and a general allowance component based on estimates of reserves needed for all other loans, segmented based on similar risk characteristics.

Impaired loans less than $250,000 are included in the general allowance population. Impaired loans over $250,000 are subject to individual evaluation on a regular basis to determine the need, if any, to allocate a specific reserve to the impaired loan. Typically, these loans consist of commercial, commercial real estate and agriculture loans and exclude homogeneous loans such as residential real estate and consumer loans. Specific allowances are determined by collectively analyzing:

	the borrower’s resources, ability, and willingness to repay in accordance with the terms of the loan agreement;
	the likelihood of receiving financial support from any guarantors;
	the adequacy and present value of future cash flows, less disposal costs, of any collateral; and
	the impact current economic conditions may have on the borrower's financial condition and liquidity or the value of the collateral.

In evaluating the loan portfolio for an appropriate ALL level, unimpaired loans are grouped into segments based on broad characteristics such as primary use and underlying collateral. During 2016, the Company updated the loan classifications in its allowance for loan losses model to include owner occupied commercial real estate and agriculture within the commercial

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loan segment and present energy as its own loan class within the commercial segment. The prior periods presentations have been reclassified to conform to the current period presentation. We have identified four primary loan segments that are further stratified into eleven loan classes to provide more granularity in analyzing loss history and to allow for more definitive qualitative adjustments based upon specific factors affecting each loan class. Following are the loan classes within each of the four primary loan segments:

	Non-owner occupied
Commercial	commercial real estate	Residential real estate	Consumer
Commercial and industrial	Construction	Senior lien	Total Consumer
Owner occupied commercial real estate	Acquisition and development	Junior lien
Agriculture	Multifamily
Energy	Non-owner occupied

Appropriate ALL levels are determined by segment and class utilizing risk ratings, loss history, peer loss history and qualitative adjustments.  The qualitative adjustments consider the following risk factors:

	economic/external conditions;
	loan administration, loan structure and procedures;
	risk tolerance/experience;
	loan growth;
	trends;
	concentrations; and
	other.

Management derives an estimated annual loss rate adjusted for an estimated loss emergence period based on historical loss data categorized by segment and class. The loss rates are applied at the loan segment and class level. Our historical loss history began in 2012, resulting in minimal losses in our originated portfolio. In order to address this lack of historical data, we incorporate not only our own historical loss rates since the beginning of 2012, but we also utilize peer historical loss data, including a historical average net charge-off ratio on each loan type, relying on the Uniform Bank Performance Reports compiled by the Federal Financial Institutions Examinations Council (“FFIEC”). We may also apply a long-term estimated loss rate to pass rated credits as necessary to account for inherent risks to the portfolio. For originated loans, we assign a slightly higher portion of our loss history, but still rely on the peer loss history to account for our limited historical data. For acquired loans, we use solely our internal loss history as those loans are more seasoned and more of the actual losses in the portfolio have been from the acquired portfolio.

The collective resulting ALL for loans not accounted for under ASC 310-30 is calculated as the sum of the specific reserves and the general reserves. While these amounts are calculated by individual loan or segment and class, the entire ALL is available for any loan that, in our judgment, should be charged-off.

Non 310-30 ALL

During 2017, we recorded  $13.1 million of provision for loan losses for loans not accounted for under ASC 310-30, which primarily reflects reserves to support loan growth and specific reserves on certain non-performing loans. Net charge-offs for non ASC 310-30 loans during 2017 totaled $10.9 million and were primarily due to two energy loans totaling $7.5 million and one commercial and industrial loan totaling $2.5 million. Specific reserves on impaired loans totaled $1.5 million at December 31, 2017.

During 2016, we recorded $24.5 million of provision for loan losses for loans not accounted for under ASC 310-30, which primarily reflects specific reserves on certain non-performing loans and reserves to support loan growth. The 2016 provision was driven by loan growth and an increase in the energy sector provision of $18.9 million. Net charge-offs for non ASC 310-30 loans during 2016 totaled $21.5 million and were driven by $19.1 million of energy sector loans. Specific reserves on impaired loans totaled $2.4 million at December 31, 2016.  

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310-30 ALL

During 2017, loans accounted for under ASC 310-30 had $154 thousand of recoupment. The recoupment was due to an improvement of expected future cash flows during the period.

During 2016, loans accounted for under ASC 310-30 had $805 thousand of recoupment. The recoupment was driven by cash flow improvements on a previously impaired agriculture pool. 

Total ALL

After considering the above mentioned factors, we believe that the ALL of $31.3 million and $29.2 million is adequate to cover probable losses inherent in the loan portfolio at December 31, 2017 and 2016, respectively. However, it is likely that future adjustments to the ALL will be necessary and any changes to the assumptions, circumstances or estimates used in determining the ALL could adversely affect the Company's results of operations, liquidity or financial condition.

The following schedules present, by class stratification, the changes in the ALL during the periods listed.

	As of and for the years ended
	December 31, 2017						December 31, 2016						December 31, 2015
	ASC		Non				ASC		Non				ASC		Non
	310-30		310-30				310-30		310-30				310-30		310-30
	loans		loans		Total		loans		loans		Total		loans		loans		Total
Beginning allowance for loan losses	$	225	$	28,949	$	29,174	$	1,077	$	26,042	$	27,119	$	721	$	16,892	$	17,613
Charge-offs:
Commercial		—		(10,342)		(10,342)		—		(20,684)		(20,684)		—		(1,911)		(1,911)
Commercial real estate non-owner occupied		—		—		—		(41)		(280)		(321)		—		(222)		(222)
Residential real estate		—		(236)		(236)		—		(408)		(408)		—		(208)		(208)
Consumer		—		(737)		(737)		(6)		(771)		(777)		(10)		(1,196)		(1,206)
Total charge-offs		—		(11,315)		(11,315)		(47)		(22,143)		(22,190)		(10)		(3,537)		(3,547)
Recoveries		—		433		433		—		594		594		—		609		609
Net charge-offs		—		(10,882)		(10,882)		(47)		(21,549)		(21,596)		(10)		(2,928)		(2,938)
(Recoupment) provision for loan loss		(154)		13,126		12,972		(805)		24,456		23,651		366		12,078		12,444
Ending allowance for loan losses	$	71	$	31,193	$	31,264	$	225	$	28,949	$	29,174	$	1,077	$	26,042	$	27,119
Ratio of net charge-offs to average total loans during the period, respectively		0.00%		0.38%		0.36%		0.03%		0.85%		0.80%		0.01%		0.36%		0.12%
Ratio of ALL to total loans outstanding at period end, respectively		0.06%		1.02%		0.98%		0.15%		1.07%		1.02%		0.53%		1.09%		1.05%
Ratio of ALL to total non-performing loans at period end, respectively		0.00%		148.54%		148.88%		0.00%		94.24%		94.98%		0.00%		101.54%		105.74%
Total loans	$	120,623	$	3,058,324	$	3,178,947	$	145,852	$	2,715,069	$	2,860,921	$	202,830	$	2,384,843	$	2,587,673
Average total loans outstanding during the period	$	132,130	$	2,897,316	$	3,029,446	$	170,330	$	2,530,464	$	2,700,794	$	209,268	$	2,323,527	$	2,532,795
Non-performing loans	$	—	$	21,000	$	21,000	$	—	$	30,717	$	30,717	$	—	$	25,647	$	25,647

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	As of and for the years ended
	December 31, 2014						December 31, 2013
		ASC		Non				ASC		Non
		310-30		310-30				310-30		310-30
		loans		loans		Total		loans		loans		Total
Beginning allowance for loan losses	$	1,280	$	11,241	$	12,521	$	4,652	$	10,728	$	15,380
Charge-offs:
Commercial		(3)		(507)		(510)		(717)		(1,654)		(2,371)
Commercial real estate non-owner occupied		—		—		—		(2,801)		(943)		(3,744)
Residential real estate		—		(739)		(739)		(623)		(882)		(1,505)
Consumer		(36)		(783)		(819)		—		(1,001)		(1,001)
Total charge-offs		(39)		(2,029)		(2,068)		(4,141)		(4,480)		(8,621)
Recoveries		—		951		951		—		1,466		1,466
Net charge-offs		(39)		(1,078)		(1,117)		(4,141)		(3,014)		(7,155)
(Recoupment) provision for loan loss		(520)		6,729		6,209		769		3,527		4,296
Ending allowance for loan losses	$	721	$	16,892	$	17,613	$	1,280	$	11,241	$	12,521
Ratio of net charge-offs to average total loans during the period, respectively		0.01%		0.06%		0.05%		0.67%		0.27%		0.41%
Ratio of ALL to total loans outstanding at period end, respectively		0.26%		0.90%		0.81%		0.28%		0.80%		0.68%
Ratio of ALL to total non-performing loans at period end, respectively		0.00%		156.22%		162.89%		8.63%		118.11%		51.43%
Total loans	$	279,645	$	1,882,764	$	2,162,409	$	450,880	$	1,403,214	$	1,854,094
Average total loans outstanding during the period	$	361,806	$	1,688,197	$	2,050,003	$	620,709	$	1,128,545	$	1,749,254
Non-performing loans	$	—	$	10,813	$	10,813	$	14,827	$	9,517	$	24,344

The following tables present the allocation of the ALL and the percentage of the total amount of loans in each loan category listed as of the dates presented:

	December 31, 2017
						ALL as a %
	Total loans		% of total loans	Related ALL		of total ALL
Commercial	$	1,874,605	59.0%	$	21,385	68.4%
Commercial real estate non-owner occupied		563,049	17.7%		5,609	17.9%
Residential real estate		716,237	22.5%		3,965	12.7%
Consumer		25,056	0.8%		305	1.0%
Total	$	3,178,947	100.0%	$	31,264	100.0%

	December 31, 2016
						ALL as a %
	Total loans		% of total loans	Related ALL		of total ALL
Commercial	$	1,560,430	54.6%	$	18,821	64.6%
Commercial real estate non-owner occupied		526,792	18.4%		5,642	19.3%
Residential real estate		744,885	26.0%		4,387	15.0%
Consumer		28,814	1.0%		324	1.1%
Total	$	2,860,921	100.0%	$	29,174	100.0%

	December 31, 2015
						ALL as a %
	Total loans		% of total loans	Related ALL		of total ALL
Commercial	$	1,427,420	55.2%	$	17,261	63.6%
Commercial real estate non-owner occupied		442,885	17.1%		4,166	15.4%
Residential real estate		684,002	26.4%		5,281	19.5%
Consumer		33,366	1.3%		411	1.5%
Total	$	2,587,673	100.0%	$	27,119	100.0%

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	December 31, 2014
						ALL as a %
	Total loans		% of total loans	Related ALL		of total ALL
Commercial	$	1,092,885	50.6%	$	10,384	59.0%
Commercial real estate non-owner occupied		401,636	18.6%		3,042	17.3%
Residential real estate		632,700	29.2%		3,771	21.4%
Consumer		35,188	1.6%		416	2.4%
Total	$	2,162,409	100.0%	$	17,613	100.0%

	December 31, 2013
						ALL as a %
	Total loans		% of total loans	Related ALL		of total ALL
Commercial	$	794,023	42.9%	$	6,005	48.0%
Commercial real estate non-owner occupied		423,644	22.8%		1,766	14.1%
Residential real estate		599,924	32.3%		4,259	34.0%
Consumer		36,503	2.0%		491	3.9%
Total	$	1,854,094	100.0%	$	12,521	100.0%

The ALL allocated to commercial loans increased to 68.4% at December 31, 2017 from 64.6% at December 31, 2016, due to loan growth partially offset by a decrease in specific reserves of $0.9 million.

Other Assets

Significant components of other assets were as follows as of the periods indicated:

					Increase (decrease)
	December 31, 2017		December 31, 2016		Amount		% Change
Bank-owned life insurance	$	64,387	$	62,516	$	1,871	3.0%
Deferred tax asset		35,630		52,810		(17,180)	(32.5)%
Derivative asset		13,105		11,715		1,390	11.9%
Accrued interest on loans		11,784		10,020		1,764	17.6%
Accrued income taxes receivable		3,992		5,252		(1,260)	(24.0)%
Accrued interest on interest bearing bank deposits and investment securities		2,471		2,542		(71)	(2.8)%
Other miscellaneous assets		7,879		8,345		(466)	(5.6)%
Minority interest in participated other real estate owned		—		1,578		(1,578)	(100.0)%
Total other assets	$	139,248	$	154,778	$	(15,530)	(10.0)%

Other assets totaled $139.2 million and $154.8 million at December 31, 2017 and 2016, respectively, representing a decrease of $15.5 million, or 10.0%, year-over-year. The decrease was driven by a re-measurement of the deferred tax asset as a result of “H.R.1”, known as the “Tax Cuts and Jobs Act”, which among other items reduced the federal corporate tax rate to 21% effective January 1, 2018, further discussed in note 19 of our consolidated financial statements. This decrease was partially offset by increases in bank-owned life insurance, accrued interest on loans and the derivative asset. Refer to note 20 of our consolidated financial statements for further discussion of the derivative asset.

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Other Liabilities

Significant components of other liabilities were as follows as of the dates indicated:

					Increase (decrease)
	December 31, 2017		December 31, 2016		Amount		% Change
Pending loan purchase settlement	$	30,181	$	5,063	$	25,118	496.1%
Accrued expenses		16,172		13,040		3,132	24.0%
Accrued interest payable		5,776		4,973		803	16.1%
Derivative liability		3,758		3,466		292	8.4%
Other miscellaneous liabilities		15,346		10,990		4,356	39.6%
Participant interest in OREO		688		—		688	100.0%
Total other liabilities	$	71,921	$	37,532	$	34,389	91.6%

Other liabilities totaled $71.9 million and $37.5 million at December 31, 2017 and 2016, respectively, increasing a combined $34.4 million, or 91.6%, year-over-year. Pending loan purchase settlement increased due to timing of loan settlements. Other miscellaneous liabilities increased largely due to an increase in derivative collateral reserves of $4.5 million. Accrued expenses increased $1.6 million due to increases in bonus accruals and $1.5 million in various accrued expense categories. Refer to note 20 of our consolidated financial statements for further discussion of the derivative liability.  

Deposits

Deposits from banking clients serve as a primary funding source for our banking operations and our ability to gather and manage deposit levels is critical to our success. Deposits not only provide a low-cost funding source for our loans, but also provide a foundation for the client relationships that are critical to future loan growth. The following table presents information regarding our deposit composition at December 31, 2017 and 2016:

							Increase (decrease)
	December 31, 2017			December 31, 2016			Amount		% Change
Non-interest bearing demand deposits	$	902,439	22.7%	$	846,744	21.9%	$	55,695	6.6%
Interest bearing demand deposits		474,607	11.9%		427,538	11.1%		47,069	11.0%
Savings accounts		472,852	11.9%		376,046	9.7%		96,806	25.7%
Money market accounts		1,011,611	25.4%		1,046,275	27.0%		(34,664)	(3.3)%
Total transaction deposits		2,861,509	71.9%		2,696,603	69.7%		164,906	6.1%
Time deposits < $100,000		637,789	16.0%		704,673	18.2%		(66,884)	(9.5)%
Time deposits > $100,000		480,261	12.1%		467,373	12.1%		12,888	2.8%
Total time deposits		1,118,050	28.1%		1,172,046	30.3%		(53,996)	(4.6)%
Total deposits	$	3,979,559	100.0%	$	3,868,649	100.0%	$	110,910	2.9%

The following table shows scheduled maturities of certificates of deposit with denominations greater than or equal to $100,000 as of December 31, 2017:

	December 31, 2017
Three months or less	$	80,903
Over 3 months through 6 months		61,888
Over 6 months through 12 months		129,330
Thereafter		208,140
Total time deposits > $100,000	$	480,261

Total deposits increased $110.9 million during 2017. Adjusting for the banking center divestitures during the second quarter of 2017, total deposits increased $213.9 million, or 5.7% from the prior year. Money market accounts and time deposits decreased $34.7 million and $54.0 million, from December 31, 2016, respectively, driven by $19.0 million and $48.4 million sold from the banking center divestitures, respectively. The mix of transaction deposits (defined as total deposits less time deposits) to total deposits improved to 71.9% at December 31, 2017, from 69.7% at December 31, 2016, as we continued to focus on developing long-term banking relationships.

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At December 31, 2017 and 2016, time deposits that were scheduled to mature within 12 months totaled $684.6 million and $788.8 million, respectively. Of the $684.6 million in time deposits scheduled to mature within 12 months at December 31, 2017, $272.1 million were in denominations of $100,000 or more, and $412.5 million were in denominations less than $100,000. Note 11 to the consolidated financial statements provides a maturity schedule of time deposits outstanding at December 31, 2017.

Other Borrowings

As of December 31, 2017 and 2016, the Company sold securities under agreements to repurchase totaling $130.5 million and $92.0 million, respectively. In addition, as a member of the FHLB, the Bank has access to a line of credit and term financing from the FHLB with total available credit of $806.7 million. At December 31, 2017 and 2016, the Bank had $129.1 million and $25.0 million in term advances from the FHLB, respectively. The term advances have fixed rates between 1.31% - 2.33%, with maturity dates of 2018 - 2020.

Regulatory Capital

Our subsidiary bank and the holding company are subject to the regulatory capital adequacy requirements of the Federal Reserve Board and the FDIC, as applicable. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly further discretionary actions by regulators that could have a material adverse effect on us. At December 31, 2017 and 2016, our subsidiary bank and the consolidated holding company exceeded all capital ratio requirements under prompt corrective action and other regulatory requirements, as further detailed in note 13 of our consolidated financial statements.

Results of Operations

Our net income depends largely on net interest income, which is the difference between interest income from interest earning assets and interest expense on interest bearing liabilities. Our results of operations are also affected by provisions for loan losses and non-interest income, such as service charges, bank card income, swap fee income, and gain on sale of mortgages, net. Our primary operating expenses, aside from interest expense, consist of salaries and benefits, occupancy costs, telecommunications data processing expense and intangible asset amortization. Any expenses related to the resolution of problem assets are also included in non-interest expense.

Overview of Results of Operations

Year ended 2017

We recorded net income of $14.6 million, or $0.53 per diluted share, during 2017, compared to net income of $23.1 million, or $0.79 per diluted share, during 2016.  Net income during 2017 included a non-cash deferred tax asset re-measurement charge of $18.5 million due to the enactment of the Tax Cuts and Jobs Act and $3.2 million in one-time expenses primarily related to the acquisition of Peoples. Adjusting for these items, net income would have been $35.0 million, or $1.26 per diluted share. Fully taxable equivalent net interest income totaled $152.2 million, representing an increase of $2.4 million from 2016.

Provision for loan loss expense on non 310-30 loans was $13.1 million during 2017, compared to $24.5 million during 2016, a decrease of $11.4 million driven entirely by a reduction in the provision for energy loans. Net charge-offs on non 310-30 loans totaled 0.38%, or 0.12% excluding the energy portfolio. 

Non-interest income totaled $39.2 million during 2017, decreasing $0.8 million from 2016, due to decreases in OREO related income of $1.8 million and gain on sale of mortgages, net of $0.7 million. These decreases were partially offset by a  combined increase in services charges and bank card fees of $1.3 million and other non-interest income of $0.4 million.

Non-interest expense totaled $136.7 million during 2017, increasing $0.7 million from 2016. The increase was largely due to $3.2 million of one-time expenses primarily related to the Peoples acquisition, offset by decreases of $1.9 million in

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occupancy and equipment,  a $0.5 million decrease in bank card expense and a $0.5 million decrease in FDIC deposit insurance.

Income tax expense totaled $21.3 million during 2017 and included an $18.5 million non-cash deferred tax asset re-measurement charge due to the enactment of the Tax Cuts and Jobs Act, partially offset by $4.2 million in tax benefits from stock compensation activity. Without these discrete items, tax expense would have been $7.1 million, an effective tax rate of 19.7%. The lower tax rate compared to the statutory rate reflects the continued success of our tax strategies and tax exempt income in relation to pre-tax income.

Years ended 2016 and 2015

We recorded net income of $23.1 million, or $0.79 per diluted share, during 2016, compared to net income of $4.9 million, or $0.14 per diluted share, during 2015. Fully taxable equivalent net interest income totaled $149.7 million representing a decrease of $9.9 million from 2015.

Provision for loan loss expense on non 310-30 loans was $24.5 million during 2016, compared to $12.1 million during 2015, an increase of $12.4 million driven by 2016 energy sector provision of $18.9 million. Net charge-offs on non 310-30 loans totaled 0.85%, or 0.10% excluding the energy portfolio during 2016, compared to 0.12% during 2015.

Non-interest income totaled $40.0 million during 2016, compared to $21.4 million during 2015, increasing $18.6 million. Excluding the net $14.5 million of negative FDIC-related income and bargain purchase gain in the prior year, non-interest income increased $4.1 million, or 11.3%, largely due to an increase of $3.4 million in other non-interest income. 

Non-interest expense totaled $136.0 million during 2016, representing a decrease of $22.0 million, or 13.9%, from the prior year. The decrease was partially due to lower telecommunications and data processing expense of $5.5 million, lower salaries and benefits of $3.3 million, lower marketing expenses of $1.8 million, lower occupancy and equipment of $1.6 million and lower professional fees of $1.0 million. Problem asset workout expense and gain on sale of OREO improved a combined $4.9 million. Additionally, 2015 included banking center consolidation related expenses of $1.4 million, and warrant liability expense of $0.1 million.

Net Interest Income

We regularly review net interest income metrics to provide us with indicators of how the various components of net interest income are performing. We regularly review: (i) our loan mix and the yield on loans; (ii) the investment portfolio and the related yields; (iii) our deposit mix and the cost of deposits; and (iv) net interest income simulations for various forecast periods.

The following tables present the components of net interest income for the periods indicated. The tables include: (i) the average daily balances of interest earning assets and interest bearing liabilities; (ii) the average daily balances of non-interest earning assets and non-interest bearing liabilities; (iii) the total amount of interest income earned on interest earning assets on a fully taxable equivalent basis; (iv) the total amount of interest expense incurred on interest bearing liabilities; (v) the resultant average yields and rates; (vi) net interest spread; and (vii) net interest margin, which represents the difference between interest income and interest expense, expressed as a percentage of interest earning assets. The effects of trade-date accounting of investment securities for which the cash had not settled are not considered interest earning assets and are excluded from this presentation for time frames prior to their cash settlement, as are the market value adjustments on the investment securities available-for-sale.

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The table below presents the components of net interest income on a fully taxable equivalent basis for the years ended December 31, 2017, 2016 and 2015:

	For the year ended					For the year ended					For the year ended
	December 31, 2017					December 31, 2016					December 31, 2015
	Average				Average	Average				Average	Average				Average
	balance		Interest		rate	balance		Interest		rate	balance		Interest		rate
Interest earning assets:
ASC 310-30 loans	$	132,130	$	22,505	17.03%	$	170,330	$	33,256	19.52%	$	237,453	$	47,255	19.90%
Non 310-30 loans FTE(1)(2)(3)(4)(5)		2,905,547		120,596	4.15%		2,545,643		100,142	3.93%		2,109,152		86,693	4.11%
Investment securities available-for-sale		875,430		16,615	1.90%		1,035,679		18,991	1.83%		1,327,245		26,398	1.99%
Investment securities held-to-maturity		296,093		8,226	2.78%		382,366		10,674	2.79%		476,924		11,747	2.46%
Other securities		15,249		839	5.50%		14,975		748	4.99%		25,865		1,210	4.68%
Interest earning deposits and securities purchased under agreements to resell		128,871		1,492	1.16%		141,178		718	0.51%		262,500		799	0.30%
Total interest earning assets FTE(4)	$	4,353,320	$	170,273	3.91%	$	4,290,171	$	164,529	3.84%	$	4,439,139	$	174,102	3.92%
Cash and due from banks		67,993					63,513					59,526
Other assets		315,660					332,122					353,344
Allowance for loan losses		(31,732)					(33,853)					(20,939)
Total assets	$	4,705,241				$	4,651,953				$	4,831,070
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits	$	1,895,852	$	6,003	0.32%	$	1,865,225	$	4,985	0.27%	$	1,758,965	$	4,524	0.26%
Time deposits		1,146,380		10,169	0.89%		1,177,523		8,978	0.76%		1,281,171		9,085	0.71%
Securities sold under agreements to repurchase		88,390		164	0.19%		109,246		152	0.14%		197,728		187	0.09%
Federal Home Loan Bank advances		113,433		1,779	1.57%		45,773		693	1.51%		40,000		666	1.67%
Total interest bearing liabilities	$	3,244,055	$	18,115	0.56%	$	3,197,767	$	14,808	0.46%	$	3,277,864	$	14,462	0.44%
Demand deposits		873,265					818,901					782,431
Other liabilities		41,205					51,587					69,299
Total liabilities		4,158,525					4,068,255					4,129,594
Shareholders' equity		546,716					583,698					701,476
Total liabilities and shareholders' equity	$	4,705,241				$	4,651,953				$	4,831,070
Net interest income FTE(4)			$	152,158				$	149,721				$	159,640
Interest rate spread FTE(4)					3.35%					3.38%					3.48%
Net interest earning assets	$	1,109,265				$	1,092,404				$	1,161,275
Net interest margin FTE(4)					3.50%					3.49%					3.60%
Ratio of average interest earning assets to average interest bearing liabilities		134.19%					134.16%					135.43%

(1)	Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)	Includes originated loans with average balances of $2,779,344, $2,368,968 and $1,893,792, interest income of $106,965, $85,792 and $70,569 and tax equivalent yields of 4.06%, 3.79% and 3.87% for the years ended 2017, 2016 and 2015, respectively.
(3)	Non 310-30 loans include loans held-for-sale. Average balances during 2017, 2016 and 2015 were $8,231, $15,179 and $7,097, and interest income was $523, $830 and $589 for the same periods, respectively. Non-accrual and restructured loan balances are included in the average loan balances; however, the forgone interest on non-accrual and restructured loans is not included in the dollar amounts of interest earned.
(4)	Presented on a fully taxable equivalent basis using the statutory tax rate of 35%. The taxable equivalent adjustments included above are $5,852, $4,081 and $2,695 for the years ended 2017, 2016 and 2015, respectively.
(5)	Loan fees included in interest income totaled $5,208, $4,734 and $4,253 during 2017, 2016 and 2015, respectively.

Net interest income totaled $146.3 million, $145.6 million and $156.9 million for the years ended 2017, 2016 and 2015, respectively. On a fully taxable equivalent basis, net interest income totaled $152.2 million, $149.7 million and $159.6 million during 2017, 2016 and 2015, respectively, increasing $2.4 million during 2017 and decreasing $9.9 million during 2016, when compared to prior periods. During 2017, the fully taxable equivalent net interest income benefitted from the continued shift of earning assets into the originated loan portfolio partially offset by lower levels of higher-yielding 310-30 loans and a 0.10% increase in the cost of interest bearing liabilities. During 2016, the fully taxable equivalent net interest income decreased due to lower levels of higher-yielding 310-30 loans and investment portfolio paydowns, partially offset by

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increases in the originated loan portfolio. The fully taxable equivalent net interest margin widened 0.01% to 3.50% during 2017 and narrowed 0.11% to 3.49 during 2016, when compared to prior periods.

Average loans comprised $3.0 billion, or 69.8%, of total average interest earning assets during 2017, compared to $2.7 billion, or 63.3%, during 2016 and $2.3 billion, or 52.9%, during 2015. The increase in average loan balances is reflective of loan originations outpacing the exit of the acquired problem loans and a shifting of investment paydowns into originated loans. The non 310-30 loan portfolio yield increase to 4.15% during 2017, compared to 3.93% during 2016, benefitting from higher yields in our variable rate loans, primarily driven by the short-term market rate increases. The non 310-30 loan portfolio yield decreased to 3.93% during 2016, compared to 4.11% during 2015,  due to high originations in a lower rate environment. The yield on the ASC 310-30 loan portfolio was 17.03%, 19.52% and 19.90% during 2017, 2016 and 2015, respectively, decreasing due to the continued resolution of the high yielding ASC 310-30 loan pools.  

Average investment securities comprised 26.9%, 33.1% and 40.6% of total interest earning assets during 2017, 2016 and 2015, respectively. The decrease in the investment portfolio was a result of scheduled paydowns and reflects the re-mixing of the interest-earning assets as we have utilized the paydowns of the investment portfolio to fund loan originations. Short-term investments, comprised of the interest earning deposits and securities purchased under agreements to resell, were 3.0%, 3.3% and 5.8% of interest earning assets during 2017, 2016 and 2015, respectively. The 2015 average balance included an increase in cash from temporary client repurchase agreements on deposit from one large client.  

Average balances of interest bearing liabilities increased  $46.3 million during 2017, compared to 2016, and decreased $80.1 million during 2016, compared to 2015. The increase during 2017 was driven by increases in Federal Home Loan Bank advances of $67.7 million and interest bearing demand, savings and money market deposits of $30.6 million, partially offset by decreases in time deposits of $31.1 million and securities sold under agreement to repurchase of $20.9 million. The decrease during 2016 was driven by a decrease in time deposits of $103.6 million and securities sold under agreement to repurchase of $88.5 million, offset by increases of $106.3 million in interest bearing demand, savings and money market deposits. Adjusting for banking center divestitures during the second quarter of 2017, interest bearing demand, savings and money market deposits increased $56.5 million and $109.0 million during 2017 and 2016, respectively, and time deposits increased $5.7 million and decreased $99.7 million during 2017 and 2016, respectively, when compared to prior periods. Total interest expense related to interest bearing liabilities was $18.1 million, $14.8 million and $14.5 million during 2017, 2016 and 2015, respectively, at an average cost of 0.56%, 0.46% and 0.44% during 2017, 2016 and 2015, respectively. Additionally, the cost of deposits increased five basis points to 0.41% during 2017, compared to 0.36% during 2016 and 2015, due to higher cost of savings, money market and time deposits.

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The following table summarizes the changes in net interest income on a taxable equivalent basis by major category of interest earning assets and interest bearing liabilities, identifying changes related to volume and changes related to rate for 2017, 2016 and 2015:

	The year ended December 31, 2017						The year ended December 31, 2016
	compared to						compared to
	the year ended December 31, 2016						the year ended December 31, 2015
	Increase (decrease) due to						Increase (decrease) due to
	Volume		Rate		Net		Volume		Rate		Net
Interest income:
ASC 310-30 loans	$	(6,506)	$	(4,245)	$	(10,751)	$	(13,105)	$	(894)	$	(13,999)
Non 310-30 loans FTE(1)(2)(3)		14,938		5,516		20,454		17,171		(3,722)		13,449
Investment securities available-for-sale		(3,041)		665		(2,376)		(5,346)		(2,061)		(7,407)
Investment securities held-to-maturity		(2,397)		(51)		(2,448)		(2,640)		1,567		(1,073)
Other securities		15		76		91		(544)		82		(462)
Interest earning deposits and securities purchased under agreements to resell		(142)		916		774		(617)		536		(81)
Total interest income	$	2,867	$	2,877	$	5,744	$	(5,081)	$	(4,492)	$	(9,573)
Interest expense:
Interest bearing demand, savings and money market deposits	$	97	$	921	$	1,018	$	284	$	177	$	461
Time deposits		(276)		1,467		1,191		(790)		683		(107)
Securities sold under agreements to repurchase		(39)		51		12		87		(60)		27
Federal Home Loan Bank advances		1,061		25		1,086		(123)		88		(35)
Total interest expense		843		2,464		3,307		(542)		888		346
Net change in net interest income	$	2,024	$	413	$	2,437	$	(4,539)	$	(5,380)	$	(9,919)

(1)	Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)	Non 310-30 loans include loans held-for-sale. Average balances during 2017, 2016 and 2015 were $8,231, $15,179 and $7,097 and interest income was $523, $830 and $589 for the same periods, respectively.
(3)	Presented on a fully taxable equivalent basis using the statutory tax rate of 35%. The taxable equivalent adjustments included above are $5,852, $4,081 and $2,695 for the years ended 2017, 2016 and 2015, respectively.

Below is a breakdown of deposits and the average rates paid during the periods indicated:

	For the three months ended						For the years ended
	December 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016
			Average			Average			Average			Average
	Average		rate	Average		rate	Average		rate	Average		rate
	balance		paid	balance		paid	balance		paid	balance		paid
Non-interest bearing demand	$	933,657	0.00%	$	835,263	0.00%	$	873,265	0.00%	$	818,901	0.00%
Interest bearing demand		443,106	0.12%		415,948	0.09%		424,408	0.10%		419,080	0.09%
Money market accounts		1,059,706	0.42%		1,057,908	0.36%		1,042,873	0.39%		1,066,345	0.34%
Savings accounts		454,494	0.40%		370,845	0.27%		428,571	0.35%		379,800	0.27%
Time deposits		1,128,069	0.95%		1,169,325	0.80%		1,146,380	0.89%		1,177,523	0.76%
Total average deposits	$	4,019,032	0.44%	$	3,849,289	0.38%	$	3,915,497	0.41%	$	3,861,649	0.36%

Provision for Loan Losses 

The provision for loan losses represents the amount of expense that is necessary to bring the ALL to a level that we deem appropriate to absorb probable losses inherent in the loan portfolio as of the balance sheet date. The ALL is in addition to the remaining purchase accounting marks of $1.8 million on acquired non 310-30 loans that were established at the time of acquisition. The determination of the ALL, and the resultant provision for loan losses, is subjective and involves significant estimates and assumptions.

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Below is a summary of the provision for loan losses recorded in the consolidated statements of operations for the periods indicated:

	2017		2016		2015
(Recoupment) provision for loans accounted for under ASC 310-30	$	(154)	$	(805)	$	366
Provision for loan losses on non 310-30 loans		13,126		24,456		12,078
Total provision for loan losses	$	12,972	$	23,651	$	12,444

Provision for loan loss expense on non 310-30 loans was $13.1 million during 2017, compared to $24.5 million during 2016, a decrease of $11.4 million driven entirely by a reduction in the provision for energy loans. Net charge-offs on the non 310-30 portfolio during 2017 totaled 0.38%, or 0.12% excluding the energy portfolio. The non 310-30 allowance for loan losses was 1.02% of total non 310-30 loans at December 31, 2017 compared to 1.07% at December 31, 2016.

Provision for loan loss expense on non 310-30 loans was $24.5 million during 2016, compared to $12.1 million during 2015. The provision for loan losses on non 310-30 loans during 2016 included energy sector provision of  $18.9 million. Net charge-offs within the non 310-30 portfolio during 2016 totaled $21.5 million, of which $19.1 million were from the energy portfolio. Net charge-offs on the non 310-30 portfolio during 2016 totaled 0.85%, or excluding the energy loans, non 310-30 net charge-offs were 0.10% during 2016, compared to net charge-offs of 0.12% in 2015. The non 310-30 allowance for loan losses was 1.07% of total non 310-30 loans at December 31, 2016 compared to 1.09% at December 31, 2015.

During 2017, 2016 and 2015 we recorded recoupments of $154 thousand, recoupments of $805 thousand and provision of $366 thousand, respectively, for loans accounted for under ASC 310-30 in connection with our re-measurements of expected cash flows. The decreases in expected future cash flows are reflected immediately in our financial statements through increased provisions for loan losses. Increases in expected future cash flows are reflected through an increase in accretable yield that is accreted to income in future periods once any previously recorded provision expense has been reversed.

Non-Interest Income

The table below details the components of non-interest income during 2017, 2016 and 2015, respectively:

	For the years ended December 31,						2017 vs 2016			2016 vs 2015
							Increase (decrease)			Increase (decrease)
	2017		2016		2015		Amount		% Change	Amount		% Change
Service charges	$	14,634	$	13,900	$	14,798	$	734	5.3 %	$	(898)	(6.1)%
Bank card fees		12,026		11,429		10,898		597	5.2 %		531	4.9 %
Gain on sale of mortgages, net		2,154		2,881		1,963		(727)	(25.2)%		918	46.8 %
Bank-owned life insurance income		1,871		1,861		1,614		10	0.5 %		247	15.3 %
Other non-interest income		8,082		7,708		4,301		374	4.9 %		3,407	79.2 %
OREO related income		438		2,248		2,379		(1,810)	(80.5)%		(131)	(5.5)%
Bargain purchase gain		—		—		1,048		—	0.0 %		(1,048)	(100.0)%
FDIC loss-sharing related		—		—		(15,553)		—	0.0 %		15,553	100.0 %
Total non-interest income	$	39,205	$	40,027	$	21,448	$	(822)	(2.1)%	$	18,579	86.6 %

Non-interest income totaled $39.2 million, $40.0 million and $21.4 million during 2017, 2016 and 2015, respectively. Service charges represent various fees charged to clients for banking services, including fees such as non-sufficient (“NSF”) charges and service charges on deposit accounts. Service charges and bank card fees increased a combined $1.3 million, or 5.3%, during 2017, compared to 2016, due to higher instances of both business and personal service charges and higher bank card interchange activity, and decreased a combined $0.4 million during 2016, compared to 2015, largely due to declines in overdraft charges partially offset by higher interchange activity.

Gain on sale of mortgages, net represents gains of mortgage loans held-for-sale and mark-to-market adjustments on mortgage banking derivatives. Gain on sale of mortgages, net decreased $0.7 million during 2017, compared to 2016, due to lower volumes and increased  $0.9 million during 2016, compared to 2015, due to a higher level of originations.

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Other non-interest income increased $0.4 million during 2017 and $3.4 million during 2016, when compared to prior periods. The increase in 2017, compared to 2016, was due to a $2.9 million gain from banking center divestiture in the second quarter of 2017, partially offset by a $0.4 million decrease in swap-related income and a $1.8 million gain on sale of a building in the prior year. The increase in 2016, compared to 2015, was largely due to the $1.8 million gain on sale of a building during the second quarter of 2016, net swap related income increase of $0.7 million and a $0.6 million increase in gain on recoveries of acquired loans during 2016.

OREO related income includes rental income and insurance proceeds received on OREO properties and write-ups to the fair-value of collateral that exceed the loan balance at the time of foreclosure. OREO related income decreased $1.8 million and $0.1 million during 2017 and 2016, when compared to prior periods. The decrease during 2017 was due to income from one large OREO property in 2016.

During 2015, the Company realized a bargain purchase gain of $1.0 million resulting from the acquisition of Pine River. FDIC loss-sharing related represents the expense recognized in connection with the actual reimbursement of costs/recoveries related to the resolution of covered assets by the FDIC. The Company terminated its loss-share agreement with the FDIC in the fourth quarter of 2015.

Non-Interest Expense

The table below details non-interest expense for the periods presented:

	For the years ended December 31,						2017 vs 2016			2016 vs 2015
							Increase (decrease)			Increase (decrease)
	2017		2016		2015		Amount		% Change	Amount		% Change
Salaries and benefits	$	80,188	$	79,765	$	83,018	$	423	0.5 %	$	(3,253)	(3.9)%
Occupancy and equipment		20,994		22,904		24,490		(1,910)	(8.3)%		(1,586)	(6.5)%
Telecommunications and data processing		7,188		5,970		11,507		1,218	20.4 %		(5,537)	(48.1)%
Marketing and business development		2,683		2,564		4,325		119	4.6 %		(1,761)	(40.7)%
FDIC deposit insurance		2,762		3,236		3,922		(474)	(14.6)%		(686)	(17.5)%
Bank card expense		3,986		4,440		3,701		(454)	(10.2)%		739	20.0 %
Professional fees		3,330		3,496		4,495		(166)	(4.7)%		(999)	(22.2)%
Other non-interest expense		10,360		8,554		11,107		1,806	21.1 %		(2,553)	(23.0)%
Problem asset workout		3,994		3,983		7,317		11	0.3 %		(3,334)	(45.6)%
Gain on OREO sales, net		(4,150)		(4,383)		(2,776)		233	5.3 %		(1,607)	(57.9)%
Intangible asset amortization		5,342		5,480		5,401		(138)	(2.5)%		79	1.5 %
Banking center consolidation related expense		—		—		1,411		—	0.0 %		(1,411)	(100.0)%
Loss from the change in fair value of warrant liability		—		—		106		—	0.0 %		(106)	(100.0)%
Total non-interest expense	$	136,677	$	136,009	$	158,024	$	668	0.5 %	$	(22,015)	(13.9)%

Non-interest expense totaled $136.7 million, $136.0 million and $158.0 million during 2017, 2016 and 2015, respectively. One-time acquisition costs for the full year of 2017 totaled $2.7 million. 

Salaries and benefits is the largest component of non-interest expense. The increase during 2017, compared to 2016, was due to $1.4 million of acquisition costs and a $0.5 million accrual for the special $1,000 bonus payments to 490 associates partially offset by lower staffing levels. The decrease during 2016, compared to 2015, was due to lower staffing levels and decreases in stock compensation expense.

Occupancy and equipment expense decreased $1.9 million during 2017 and $1.6 million during 2016, compared to prior periods. The decrease in 2017 was due to lower depreciation expense. The decrease in 2016 was primarily due to lower depreciation expense and benefits realized from the successful negotiation of vendor contracts during 2015.

Telecommunications and data processing expense increased $1.2 million during 2017 and decreased $5.5 million during 2016, compared to prior periods. The increase during 2017 was primarily due to $0.7 million of acquisition related costs. The decrease in 2016 benefited from the core system conversion and favorable vendor contract negotiations during 2015.

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Marketing and business development expense increased  $0.1 million during 2017 and decreased $1.8 million during 2016, compared to prior periods. The decrease during 2016 was due to reduced levels of marketing campaigns in 2016.

FDIC deposit insurance expense decreased during 2017 and 2016, when compared to prior periods, due to lower assessment rates.

Bank card expense decreased $0.5 million and increased $0.7 million during 2017 and 2016, respectively, when compared to prior periods, due to the cost of re-issuance of our bank cards with chip reader technology during 2016.

Professional fees decreased $0.2 million during 2017, when compared to the prior period, and included $0.4 million of one-time acquisition costs. Professional fees decreased $1.0 million during 2016, when compared to the prior period, due to one-time core system conversion related expenses completed during the fourth quarter of 2015.

Other non-interest expense increased  $1.8 million and decreased  $2.6 million during 2017 and 2016, respectively, when compared to prior periods.  The increase during 2017 was primarily due to increases in unfunded commitment reserves of $1.1 million, acquisition related costs of $0.1 million and $0.6 million of various other expense categories.  The decrease during 2016 was largely due to decreases in unfunded commitment reserves of $1.4 million and other net decreases of $1.2 million.

Problem asset workout expense is incurred in connection with the resolution process of our acquired problem loans and were consistent during 2017 and 2016. Problem asset workout expense decreased $3.3 million from 2015 to 2016 due to the successful resolution of problem assets during 2015. Gain on OREO sales, net decreased $0.2 million during 2017 and increased $1.6 million during 2016, respectively, due to the sale of several larger assets during 2016.  

The Bank consolidated or sold banking centers within the Bank Midwest and Community Banks of Colorado footprints in each of the years 2015 through 2017. Fair value impairment charges of $1.4 million were realized during 2015 related to banking centers consolidated or sold. No impairment charges were realized during 2016 or 2017. The warrant agreements were amended during 2015 resulting in a reclassification from a liability to equity.

Income taxes

Income taxes are accounted for in accordance with ASC Topic 740, Income Taxes. Under this guidance, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. ASC Topic 740 requires the establishment of a valuation allowance against the net deferred tax asset unless it is more-likely-than-not that the tax benefit of the deferred tax asset will be realized. For purposes of projecting whether the deferred tax asset will be realized, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results, or the ability to implement tax planning strategies varies, adjustments to the carrying value of the deferred tax assets may be required. We believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

Income tax expense totaled $21.3 million, $2.9 million and $3.0 million for 2017, 2016 and 2015, respectively. During the fourth quarter of 2017, the Company re-measured its deferred tax asset as a result of the Tax Cuts and Jobs Act, which among other items reduces the federal corporate tax rate to 21% effective January 1, 2018. As a result, income tax expense recorded in 2017 included an $18.5 million non-cash one-time charge primarily related to this re-measurement. In addition, the tax expense recorded for 2017 and 2016 was lowered by a $4.2 million and $2.1 million tax benefit from stock compensation activity, respectively. Without these discrete items, the effective tax rates for 2017 and 2016 were 19.7% and 19.7%, respectively. The tax expense recorded for 2015 included $3.7 million of non-cash deferred tax asset write-offs in connection with former executive stock-based compensation agreements. Without this $3.7 million, the Company would have recorded a tax benefit resulting from the increased tax-exempt income sources compared to pre-tax income. The yearly effective tax rates differ from the federal statutory tax rate primarily due to stock compensation activity, interest income from tax-exempt lending, bank-owned life insurance income and the relationship of these items to pre-tax income. 

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The Company has unvested stock-based compensation awards outstanding at December 31, 2017, including stock options, restricted stock and performance stock units. The strike prices for options range from $18.09 to $34.16, with a large portion of the awards having strike prices of $20.00. The option awards and restricted stock awards vest over a range of a 1-3 year period. The performance stock units cliff vest over a range of 2-3 years and the number of shares issued is determined by the final performance results. Depending on the movement in our stock price, these stock-based compensation awards may create either an excess tax benefit or tax deficiency depending on the relationship between the fair value at the time of vesting or exercise and the estimated fair value recorded at the time of grant. As of December 31, 2017, we had $3.1 million of deferred tax assets related to stock-based compensation, $2.3 million of which is associated with executive officers still employed by the Company. 

ASC Topic 740 also requires the projected realization of tax benefits related to uncertain tax positions to be evaluated based upon the likelihood of successfully defending those positions. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties on uncertain tax positions are recognized as a component of other non-interest expense. If our assessment of whether a tax position meets or no longer meets the more likely than not threshold were to change, adjustments to income tax benefits may be required. As of December 31, 2017 and 2016, we have not identified any uncertain tax positions.

As of December 31, 2017,  our marginal tax rate (the rate we pay on each incremental dollar of earnings) was approximately 38%. However, our effective tax rate (income tax expense divided by income before income taxes) for a given period is driven largely by income and expense items that are non-taxable or non-deductible in the calculation of income tax expense. As a result of the Tax Cuts and Jobs Act, effective January 1, 2018, our marginal tax rate reduced to approximately 23%.

Liquidity and Capital Resources

Liquidity is monitored and managed to ensure that sufficient funds are available to operate our business and pay our obligations to depositors and other creditors, while providing ample available funds for opportunistic and strategic investments. On-balance sheet liquidity is represented by our cash and cash equivalents and unencumbered investment securities, and is detailed in the table below as of December 31, 2017 and 2016: 

	December 31, 2017		December 31, 2016
Cash and due from banks	$	193,297	$	152,736
Cash segregated for Peoples acquisition		(36,189)		—
Unsegregated cash and due from banks		157,108		152,736
Interest bearing bank deposits		64,067		—
Unencumbered investment securities, at fair value		637,048		843,061
Total	$	858,223	$	995,797

Total on-balance sheet liquidity decreased $137.6 million from December 31, 2016 to December 31, 2017. The decrease was largely due to a planned reduction of $206.0 million in unencumbered available-for-sale and held-to-maturity securities balances. Included in cash and due from banks on the consolidated statement of financial condition is $36.2 million of cash segregated for the Peoples acquisition.

Our primary sources of funds are deposits, securities sold under agreements to repurchase, prepayments and maturities of loans and investment securities, the sale of investment securities, and funds provided from operations. We are also a party to a master repurchase agreement with a large financial institution and we anticipate that, through this agreement, we would have access to a significant amount of liquidity. We anticipate having access to other third party funding sources, including the ability to raise funds through the issuance of shares of our common stock or other equity or equity-related securities, incurrence of debt, and federal funds purchased, that may also be a source of liquidity. We anticipate that these sources of liquidity will provide adequate funding and liquidity for at least a 12-month period.

Our primary uses of funds are loan originations, investment security purchases, withdrawals of deposits, settlement of repurchase agreements, capital expenditures, operating expenses, and share repurchases. For additional information regarding

69

our operating, investing and financing cash flows, see our consolidated statements of cash flows in the accompanying consolidated financial statements.

Exclusive from the investing activities related to acquisitions, our primary investing activities are originations and pay-offs and pay downs of loans and purchases and sales of investment securities. At December 31, 2017, pledgeable investment securities represented our largest source of liquidity. Our available-for-sale investment securities are carried at fair value and our held-to-maturity securities are carried at amortized cost. Our collective investment securities portfolio totaled $1.1 billion at December 31, 2017, inclusive of pre-tax net unrealized losses of $15.5 million on the available-for-sale securities portfolio. Additionally, our held-to-maturity securities portfolio had $2.0 million of pre-tax net unrealized losses at December 31, 2017. The gross unrealized gains and losses are detailed in note 4 of our consolidated financial statements. As of December 31, 2017, our investment securities portfolio consisted primarily of mortgage-backed securities, all of which were issued or guaranteed by U.S. Government agencies or sponsored enterprises. The anticipated repayments and marketability of these securities offer substantial resources and flexibility to meet new loan demand, reinvest in the investment securities portfolio, or provide optionality for reductions in our deposit funding base.

At present, financing activities primarily consist of changes in deposits and repurchase agreements, and advances from the FHLB, in addition to the payment of dividends and the repurchase of our common stock. Maturing time deposits represent a potential use of funds. As of December 31, 2017, $684.6 million of time deposits were scheduled to mature within 12 months. Based on the current interest rate environment, market conditions, and our consumer banking strategy focusing on both lower cost transaction accounts and term deposits, our strategy is to replace a significant portion of those maturing time deposits with transaction deposits and market-rate time deposits.

Through our relationship with the FHLB, we have pledged qualifying loans and investment securities allowing us to obtain additional liquidity through FHLB advances and lines of credit. FHLB advances and lines of credit available totaled $935.8 million of which $129.1 million was used at December 31, 2017. We can obtain additional liquidity through FHLB advances if required. The Bank also has access to federal funds lines of credit with corresponding banks.

The Basel III  Capital rules, effective January 1, 2015, changed the components of regulatory capital, changed the way in which risk ratings are assigned to various categories of bank assets, and defined a new Tier 1 common risk-based ratio. In addition, a capital conservation buffer requirement, designed to strengthen an institution’s financial resilience during economic cycles through the restriction of capital distributions and other payments, became effective in 2016 with full phase in beginning January 1, 2019. When fully phased-in, the capital conservative buffer adds a 2.5% capital requirement above existing regulatory minimum ratios. Under the Basel III requirements, at December 31, 2017 and 2016, the Company and the Bank met all capital adequacy requirements and the Bank had regulatory capital ratios in excess of the levels established for well-capitalized institutions. For more information on regulatory capital, see note 13 in our consolidated financial statements.

Our shareholders' equity is impacted by earnings, changes in unrealized gains and losses on securities, net of tax, stock-based compensation activity, share repurchases and the payment of dividends.

The Board of Directors has authorized multiple programs to repurchase shares of the Company’s common stock from time to time either in open market or in privately negotiated transactions in accordance with applicable regulations of the SEC. We believe that our repurchases could serve to offset any future share issuances for future acquisitions.

On August 5, 2016, the Company announced that its Board of Directors authorized a new program to repurchase up to an additional $50.0 million of the Company’s common stock. The remaining authorization under this program as of December 31, 2017 was $12.6 million. During 2017, we did not repurchase any shares of our common stock as part of a publicly announced program.

On January 18, 2018, our Board of Directors declared a quarterly dividend of $0.09 per common share, payable on March 15, 2018 to shareholders of record at the close of business on February 23, 2018.

70

Asset/Liability Management and Interest Rate Risk    

Management and the Board of Directors are responsible for managing interest rate risk and employing risk management policies that monitor and limit this exposure. Interest rate risk is measured using net interest income simulations and market value of portfolio equity analyses. These analyses use various assumptions, including the nature and timing of interest rate changes, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, and reinvestment/replacement of asset and liability cash flows.

The principal objective of the Company's asset and liability management function is to evaluate the interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while maximizing earnings and preserving adequate levels of liquidity and capital. The asset and liability management function is under the guidance of the Asset Liability Committee from direction of the Board of Directors. The Asset Liability Committee meets monthly to review, among other things, the sensitivity of the Company's assets and liabilities to interest rate changes, local and national market conditions and rates. The Asset Liability Committee also reviews the liquidity, capital, deposit mix, loan mix and investment positions of the Company.

Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in net interest margin. These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and use various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows.

We also analyze the economic value of equity as a secondary measure of interest rate risk. This is a complementary measure to net interest income where the calculated value is the result of the market value of assets less the market value of liabilities. The economic value of equity is a longer term view of interest rate risk because it measures the present value of the future cash flows. The impact of changes in interest rates on this calculation is analyzed for the risk to our future earnings and is used in conjunction with the analyses on net interest income.

Our interest rate risk model indicated that the Company was asset sensitive in terms of interest rate sensitivity at December 31, 2017.  During 2017, we increased our asset sensitivity as a result of the balance sheet mix towards more variable rate assets, even after adjusting our models for the excess capital deployment. The table below illustrates the impact of an immediate and sustained 200 and 100 basis point increase and a 50 basis point decrease in interest rates on net interest income based on the interest rate risk model at December 31, 2017 and 2016: 

Hypothetical
shift in interest	% change in projected net interest income
rates (in bps)	December 31, 2017	December 31, 2016
200	6.93%	5.84%
100	4.82%	3.66%
(50)	(1.46)%	(2.49)%

Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve. The computations of interest rate risk shown above do not include actions that management may undertake to manage the risks in response to anticipated changes in interest rates and actual results may also differ due to any actions taken in response to the changing rates.

As part of the asset/liability management strategy to manage primary market risk exposures expected to be in effect in future reporting periods, management has emphasized the origination of shorter duration loans as well as variable rate loans to limit the negative exposure to a rate increase. The strategy with respect to liabilities has been to emphasize transaction accounts, particularly non-interest or low interest bearing non-maturing deposit accounts which are less sensitive to changes in interest rates. In response to this strategy, non-maturing deposit accounts have grown $216.3 million during 2017, and totaled 71.9% of total deposits at December 31, 2017, compared to 70.4% at December 31, 2016, when adjusted for banking center consolidations. We currently have no brokered time deposits and intend to continue to focus on our strategy of increasing non-interest or low-cost interest bearing non-maturing deposit accounts.

71

Off-Balance Sheet Activities

In the normal course of business, we are a party to various contractual obligations, commitments and other off-balance sheet activities that contain credit, market, and operational risk that are not required to be reflected in our consolidated financial statements. The most significant of these are the loan commitments that we enter into to meet the financing needs of clients, including commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. As of December 31, 2017 and 2016, we had loan commitments totaling $680.8 million and $602.2 million, respectively, and standby letters of credit that totaled $7.2 million and $13.5 million, respectively. Unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon. We do not anticipate any material losses arising from commitments or contingent liabilities and we do not believe that there are any material commitments to extend credit that represent risks of an unusual nature. 

Contractual Obligations 

In addition to the financing commitments detailed above under “Off-Balance Sheet Activities,” in the normal course of business, we enter into contractual obligations that require future cash settlement. The following table summarizes the contractual cash obligations as of December 31, 2017 and the expected timing of those payments:

			After one but		After three but
	Within		within three		within five		After five
	one year		years		years		years		Total
Federal Home Loan Bank advances	$	61,780	$	67,335	$	—	$	—	$	129,115
Operating lease obligations		3,158		6,073		6,143		12,210		27,584
Purchase obligations		6,702		8,102		6,453		—		21,257
Time deposits		684,622		408,414		21,433		3,581		1,118,050
Total	$	756,262	$	489,924	$	34,029	$	15,791	$	1,296,006

Impact of Inflation and Changing Prices

The primary impact of inflation on our operations is reflected in increasing operating costs and is reflected in non-interest expense. Unlike most industrial companies, virtually all of our assets and liabilities are monetary in nature. As a result, changes in interest rates have a more significant impact on our performance than do changes in the general rate of inflation and changes in prices. Interest rate changes do not necessarily move in the same direction, nor have the same magnitude, as changes in the prices of goods and services. Although not as critical to the banking industry as many other industries, inflationary factors may have some impact on our ability to grow, total assets, earnings, and capital levels. We do not expect inflation to be a significant factor in our financial results in the near future.

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information called for by this item is provided under the caption Asset/Liability Management and Interest Rate Risk in Part I, Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

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Item 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
National Bank Holdings Corporation:

Opinion on the ConsolidatedFinancial Statements

We have audited the accompanying consolidated statements of financial condition of National Bank Holdings Corporation and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2017, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2010.

Kansas City, Missouri

February 27, 2018

73

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

December 31, 2017 and 2016

(In thousands, except share and per share data)

	December 31, 2017		December 31, 2016
ASSETS
Cash and due from banks	$	193,297	$	152,736
Interest bearing bank deposits		64,067		—
Cash and cash equivalents		257,364		152,736
Investment securities available-for-sale (at fair value)		855,345		884,232
Investment securities held-to-maturity (fair value of $256,771 and $332,573 at December 31, 2017 and December 31, 2016, respectively)		258,730		332,505
Non-marketable securities		15,030		14,949
Loans		3,178,947		2,860,921
Allowance for loan losses		(31,264)		(29,174)
Loans, net		3,147,683		2,831,747
Loans held for sale		4,629		24,187
Other real estate owned		10,491		15,662
Premises and equipment, net		93,708		95,671
Goodwill		59,630		59,630
Intangible assets, net		1,607		6,949
Other assets		139,248		154,778
Total assets	$	4,843,465	$	4,573,046
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing demand deposits	$	902,439	$	846,744
Interest bearing demand deposits		474,607		427,538
Savings and money market		1,484,463		1,422,321
Time deposits		1,118,050		1,172,046
Total deposits		3,979,559		3,868,649
Securities sold under agreements to repurchase		130,463		92,011
Federal Home Loan Bank advances		129,115		38,665
Other liabilities		71,921		37,532
Total liabilities		4,311,058		4,036,857
Shareholders’ equity:
Common stock, par value $0.01 per share: 400,000,000 shares authorized; 51,518,162 and 51,813,011 shares issued; 26,875,585 and 26,386,583 shares outstanding at December 31, 2017 and December 31, 2016, respectively		515		514
Additional paid-in capital		970,668		984,087
Retained earnings		60,795		55,454
Treasury stock of 24,479,020 and 24,927,157 shares at December 31, 2017 and December 31, 2016, respectively, at cost		(493,329)		(502,104)
Accumulated other comprehensive loss, net of tax		(6,242)		(1,762)
Total shareholders’ equity		532,407		536,189
Total liabilities and shareholders’ equity	$	4,843,465	$	4,573,046

See accompanying notes to the consolidated financial statements.

74

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended December 31, 2017, 2016 and 2015

(In thousands, except share and per share data)

	2017		2016		2015
Interest and dividend income:
Interest and fees on loans	$	137,249	$	129,317	$	131,253
Interest and dividends on investment securities		24,841		29,665		38,145
Dividends on non-marketable securities		839		748		1,210
Interest on interest-bearing bank deposits		1,492		718		799
Total interest and dividend income		164,421		160,448		171,407
Interest expense:
Interest on deposits		16,172		13,963		13,609
Interest on borrowings		1,943		845		853
Total interest expense		18,115		14,808		14,462
Net interest income before provision for loan losses		146,306		145,640		156,945
Provision for loan losses		12,972		23,651		12,444
Net interest income after provision for loan losses		133,334		121,989		144,501
Non-interest income:
Service charges		14,634		13,900		14,798
Bank card fees		12,026		11,429		10,898
Gain on sale of mortgages, net		2,154		2,881		1,963
Bank-owned life insurance income		1,871		1,861		1,614
Other non-interest income		8,082		7,708		4,301
OREO related income		438		2,248		2,379
Bargain purchase gain		—		—		1,048
FDIC loss-sharing related		—		—		(15,553)
Total non-interest income		39,205		40,027		21,448
Non-interest expense:
Salaries and benefits		80,188		79,765		83,018
Occupancy and equipment		20,994		22,904		24,490
Telecommunications and data processing		7,188		5,970		11,507
Marketing and business development		2,683		2,564		4,325
FDIC deposit insurance		2,762		3,236		3,922
Bank card expense		3,986		4,440		3,701
Professional fees		3,330		3,496		4,495
Other non-interest expense		10,360		8,554		11,107
Problem asset workout		3,994		3,983		7,317
Gain on OREO sales, net		(4,150)		(4,383)		(2,776)
Intangible asset amortization		5,342		5,480		5,401
Loss from the change in fair value of warrant liability		—		—		106
Banking center consolidation related expense		—		—		1,411
Total non-interest expense		136,677		136,009		158,024
Income before income taxes		35,862		26,007		7,925
Income tax expense		21,283		2,947		3,044
Net income	$	14,579	$	23,060	$	4,881
Income per share—basic	$	0.54	$	0.81	$	0.14
Income per share—diluted	$	0.53	$	0.79	$	0.14
Weighted average number of common shares outstanding:
Basic		26,928,763		28,313,061		34,349,996
Diluted		27,709,659		29,091,343		34,363,487

See accompanying notes to the consolidated financial statements.

75

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31, 2017, 2016 and 2015

(In thousands)

	2017		2016		2015
Net income	$	14,579	$	23,060	$	4,881
Other comprehensive loss, net of tax:
Securities available-for-sale:
Net unrealized (losses) gains arising during the period, net of tax benefit (expense) of $1,871,  ($26) and $2,015 for the years ended 2017, 2016 and 2015, respectively		(3,128)		42		(3,275)
Less: amortization of net unrealized holding gains to income, net of tax benefit of $828,  $1,166, and $1,523 for the years ended 2017, 2016 and 2015, respectively		(1,352)		(1,899)		(2,469)
Other comprehensive loss		(4,480)		(1,857)		(5,744)
Comprehensive income (loss)	$	10,099	$	21,203	$	(863)

See accompanying notes to the consolidated financial statements.

76

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity

For the Years Ended 2017, 2016 and 2015 

(In thousands, except share and per share data)

									Accumulated
			Additional						other
	Common		paid-in		Retained		Treasury		comprehensive
	stock		capital		earnings		stock		income (loss), net		Total
Balance, December 31, 2014	$	512	$	993,212	$	40,528	$	(245,516)	$	5,839	$	794,575
Net income		—		—		4,881		—		—		4,881
Stock-based compensation		—		3,349		—		—		—		3,349
Issuance of stock under equity compensation plan, including gain on reissuance of treasury stock of $96, net		1		(1,701)		—		904		—		(796)
Repurchase of 8,645,836 shares		—		—		—		(175,048)		—		(175,048)
Cash dividends declared ($0.20 per share)		—		—		(6,739)		—		—		(6,739)
Warrant reclassification		—		3,066		—		—		—		3,066
Other comprehensive loss		—		—		—		—		(5,744)		(5,744)
Balance, December 31, 2015	$	513	$	997,926	$	38,670	$	(419,660)	$	95	$	617,544
Net income		—		—		23,060		—		—		23,060
Stock-based compensation		—		3,492		—		—		—		3,492
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $4,396, net		1		(13,790)		—		7,588		—		(6,201)
Repurchase of 4,500,936 shares		—		—		—		(93,573)		—		(93,573)
Cash dividends declared ($0.22 per share)		—		—		(6,276)		—		—		(6,276)
Warrant exercise		—		(3,541)		—		3,541		—		—
Other comprehensive loss		—		—		—		—		(1,857)		(1,857)
Balance, December 31, 2016	$	514	$	984,087	$	55,454	$	(502,104)	$	(1,762)	$	536,189
Net income		—		—		14,579		—		—		14,579
Stock-based compensation		—		3,648		—		—		—		3,648
Issuance of stock under purchase and equity compensation plans, including gain on reissuance of treasury stock of $6,118, net		1		(15,134)		—		6,842		—		(8,291)
Cash dividends declared ($0.34 per share)		—		—		(9,238)		—		—		(9,238)
Warrant exercise		—		(1,933)		—		1,933		—		—
Other comprehensive loss		—		—		—		—		(4,480)		(4,480)
Balance, December 31, 2017	$	515	$	970,668	$	60,795	$	(493,329)	$	(6,242)	$	532,407

See accompanying notes to the consolidated financial statements.

77

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2017, 2016 and 2015

(In thousands)

	2017		2016		2015
Cash flows from operating activities:
Net income	$	14,579	$	23,060	$	4,881
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses		12,972		23,651		12,444
Depreciation and amortization		12,889		14,203		15,502
Current income tax receivable		1,260		4,176		(7,328)
Deferred income taxes		17,180		(176)		(4,241)
Net excess tax (benefit) deficit on stock-based compensation		(4,225)		(2,078)		3,677
Discount accretion, net of premium amortization on securities		2,581		3,067		4,124
Loan accretion		(23,933)		(35,073)		(50,687)
Gain on sale of mortgages, net		(2,154)		(2,881)		(1,963)
Origination of loans held for sale, net of repayments		(85,959)		(114,397)		(99,246)
Proceeds from sales of loans held for sale		101,935		101,098		92,845
Bank-owned life insurance income		(1,871)		(1,861)		(1,614)
Amortization of indemnification asset		—		—		15,878
Gain on the sale of other real estate owned, net		(4,150)		(4,383)		(2,776)
Impairment on other real estate owned		766		298		1,580
Banking center consolidated related expenses		—		—		1,411
Loss (gain) on fixed assets		(2,853)		(1,981)		(28)
Bargain purchase gain		—		—		(1,048)
Stock-based compensation		3,648		3,492		3,349
Decrease in due to FDIC, net		—		—		(37,138)
Decrease (increase) in other assets		6,040		(4,721)		4,871
Increase (decrease) in other liabilities		9,434		(9,430)		7,879
Net cash provided by (used in) operating activities		58,139		(3,936)		(37,628)
Cash flows from investing activities:
Purchase of FHLB stock		(7,448)		(5,544)		—
Proceeds from redemption of FHLB stock		6,877		7,670		493
Proceeds from redemption of FRB stock		—		4,964		5,320
Proceeds from maturities of investment securities held-to-maturity		71,105		91,376		104,683
Proceeds from maturities of investment securities available-for-sale		224,336		275,448		314,271
Proceeds from sales of investment securities available-for-sale		—		—		29,747
Proceeds from maturities of non-marketable securities		490		490		—
Purchase of investment securities available-for-sale		(202,694)		(4,872)		—
Purchase of investment securities held-to-maturity		—		—		(6,225)
Net increase in loans		(314,008)		(270,585)		(334,798)
(Purchases) sale of premises and equipment, net		(5,617)		690		(5,081)
Purchase of bank-owned life insurance		—		(10,344)		—
Proceeds from sales of loans		38,087		9,231		17,204
Proceeds from sales of other real estate owned		10,355		16,105		15,566
Decrease  in FDIC indemnification asset		—		—		18,331
Net cash activity from acquisitions		—		—		22,832
Net cash (used in) provided by investing activities		(178,517)		114,629		182,343
Cash flows from financing activities:
Net increase (decrease) in deposits		113,796		27,972		(55,654)
Increase (decrease) in repurchase agreements		38,452		(44,512)		2,971
Advances from FHLB		263,129		218,629		—
FHLB payoffs		(172,679)		(219,964)		—
Issuance of stock under purchase and equity compensation plans		(8,395)		(6,201)		(952)
Proceeds from exercise of stock options		104		—		160
Settlement of warrants		—		—		(368)
Payment of dividends		(9,401)		(6,400)		(6,711)
Repurchase of shares		—		(93,573)		(175,048)
Net cash provided by (used in) financing activities		225,006		(124,049)		(235,602)
Increase (decrease) in cash and cash equivalents		104,628		(13,356)		(90,887)
Cash and cash equivalents at beginning of the year		152,736		166,092		256,979
Cash and cash equivalents at end of period	$	257,364	$	152,736	$	166,092
Supplemental disclosure of cash flow information during the period:
Cash paid for interest	$	17,312	$	14,154	$	13,751
Net tax payments	$	127	$	2,193	$	(7,420)
Supplemental schedule of non-cash investing activities:
Loans transferred to other real estate owned at fair value	$	1,800	$	6,868	$	4,576
Increase (decrease) in loans purchased but not settled	$	25,118	$	(4,873)	$	(102)
Loans transferred from loans held for sale to loans	$	5,736	$	5,285	$	218

See accompanying notes to the consolidated financial statements.

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NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

Note 1 Basis of Presentation

National Bank Holdings Corporation ("NBHC" or the "Company") is a bank holding company that was incorporated in the State of Delaware in 2009 with the intent to acquire and operate financial services franchises and other complementary businesses in targeted markets. The Company is headquartered immediately south of Denver, in Greenwood Village, Colorado, and its primary operations are conducted through its wholly owned subsidiary, NBH Bank, (the "Bank"), a Colorado state-chartered bank and a member of the Federal Reserve System. The Company provides a variety of banking products to both commercial and consumer clients through a network of 85 banking centers as of December 31, 2017, located in Colorado and the greater Kansas City region, and through online and mobile banking products and services.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, NBH Bank. The accompanying consolidated financial statements have been prepared in accordance with GAAP and where applicable, with general practices in the banking industry or guidelines prescribed by bank regulatory agencies. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results presented. All such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications of prior years' amounts are made whenever necessary to conform to current period presentation. All amounts are in thousands, except share data, or as otherwise noted.

The Company's significant accounting policies followed in the preparation of the consolidated financial statements are disclosed in note 2. GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. By their nature, estimates are based on judgment and available information. Management has made significant estimates in certain areas, such as the amount and timing of expected cash flows from assets, the valuation of OREO, the fair value adjustments on assets acquired and liabilities assumed, the valuation of core deposit intangible assets, the valuation of investment securities for other-than-temporary impairment (“OTTI”), the valuation of stock-based compensation, the fair values of financial instruments, the ALL, and contingent liabilities. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.

Note 2 Summary of Significant Accounting Policies

a) Acquisition activities—The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets acquired exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. Fair values are subject to refinement for up to a maximum of one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Adjustments recorded to the acquired assets and liabilities assumed are applied prospectively in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss; therefore, the related ALL is not carried forward at the time of acquisition.

Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). Deposit liabilities and the related depositor relationship intangible assets, known as the core deposit intangible assets, may be exchanged in observable exchange transactions. As a result, the core deposit intangible asset is considered identifiable, because the separability criterion has been met.

b) Cash and cash equivalents—Cash and cash equivalents include cash, cash items, amounts due from other banks, amounts due from the Federal Reserve Bank of Kansas City, federal funds sold, and interest-bearing bank deposits and segregated

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cash held for the acquisition of Peoples, Inc. Refer to note 24 – Subsequent Events of our consolidated financial statements for additional details related to the acquisition.

c) Investment securities—Investment securities may be classified in three categories: trading, available-for-sale or held-to-maturity. Management determines the appropriate classification at the time of purchase and reevaluates the classification at each reporting period. Any sales of available-for-sale securities are for the purpose of executing the Company’s asset/liability management strategy, reducing borrowings, funding loan growth, providing liquidity, or eliminating a perceived credit risk in a specific security. Held-to-maturity securities are carried at amortized cost and the available-for-sale securities are carried at estimated fair value. Unrealized gains or losses on securities available-for-sale are reported as accumulated other comprehensive income (loss) (“AOCI”), a component of shareholders’ equity, net of income tax. Gains and losses realized upon sales of securities are calculated using the specific identification method. Premiums and discounts are amortized to interest income over the estimated lives of the securities. Prepayment experience is periodically evaluated and a determination made regarding the appropriate estimate of the future rates of prepayment. When a change in a bond’s estimated remaining life is necessary, a corresponding adjustment is made in the related premium amortization or discount accretion. Purchases and sales of securities, including any corresponding gains or losses, are recognized on a trade-date basis and a receivable or payable is recognized for pending transaction settlements.

Management evaluates all investments for OTTI on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Impairment is considered to be other-than-temporary if it is likely that all amounts contractually due will not be received for debt securities and when there is no positive evidence indicating that an investment’s carrying amount is recoverable in the near term for equity securities. When impairment is considered other-than-temporary, the cost basis of the security is written down to fair value, with the impairment charge related to credit included in earnings, while the impairment charge related to all other factors is recognized in OCI. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the entire amount of the OTTI is recorded in earnings. In evaluating whether the impairment is temporary or other than temporary, the Company considers, among other things, the severity and duration of the unrealized loss position; adverse conditions specifically related to the security; changes in expected future cash flows; downgrades in the rating of the security by a rating agency; the failure of the issuer to make scheduled interest or principal payments; whether the Company has the intent to sell the security; and whether it is more likely than not that the Company will be required to sell the security.

d) Non-marketable securities—Non-marketable securities include Federal Reserve Bank ("FRB") stock and Federal Home Loan Bank ("FHLB") stock. These securities have been acquired for debt facility or regulatory purposes and are carried at cost.

e) Loans receivable—Loans receivable include loans originated by the Company and loans that are acquired through acquisitions. Loans originated by the Company are carried at the principal amount outstanding, net of premiums, discounts, unearned income, and deferred loan fees and costs. Loan fees and certain costs of originating loans are deferred and the net amount is amortized over the contractual life of the related loans. Acquired loans are initially recorded at fair value and are accounted for under either ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (see additional information below) or ASC Topic 310, Receivables. Non-refundable loan origination and commitment fees, net of direct costs of originating or acquiring loans, and fair value adjustments for acquired loans, are deferred and recognized over the remaining lives of the related loans in accordance with ASC 310-20.

Acquired loans are recorded at their estimated fair value at the time of acquisition and accounted for under either ASC 310-30 or ASC 310. Estimated fair values of acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, the expected timing of cash flows, classification status, fixed or variable interest rate, term of loan and whether or not the loan is amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Acquired 310-30 loans are grouped together according to similar characteristics such as type of loan, loan purpose, geography, risk rating and underlying collateral and are treated as distinct pools when applying various valuation techniques and, in certain circumstances, for the ongoing monitoring of the credit quality and performance of the pools. Each pool is accounted for as a single loan for which the integrity is maintained throughout the life of the asset. Discounts created when the loans are recorded at their estimated fair values at acquisition are accreted over the remaining term of the loan as an adjustment to the related loan’s yield. Similar to originated loans described

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below, the accrual of interest income on acquired loans that are not accounted for under ASC 310-30 is discontinued when the collection of principal or interest, in whole or in part, is doubtful.

Interest income on acquired loans that are accounted for under ASC Topic 310 and interest income on loans originated by the Company is accrued and credited to income as it is earned using the interest method based on daily balances of the principal amount outstanding. However, interest is generally not accrued on loans 90 days or more past due, unless they are well secured and in the process of collection. Additionally, in certain situations, loans that are not contractually past due may be placed on non-accrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors, such as insufficient collateral value or deficient primary and secondary sources of repayment. Accrued interest receivable is reversed when a loan is placed on non-accrual status and payments received generally reduce the carrying value of the loan. Interest is not accrued while a loan is on non-accrual status and interest income is generally recognized on a cash basis only after payment in full of the past due principal and collection of principal outstanding is reasonably assured. A loan may be placed back on accrual status if all contractual payments have been received, or sooner under certain conditions and collection of future principal and interest payments is no longer doubtful.

In the event of borrower default, the Company may seek recovery in compliance with state lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying or restructuring a loan from its original terms, for economic or legal reasons, to provide a concession to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Such restructured loans are considered “troubled debt restructurings” and are identified in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Under this guidance, modifications to loans that fall within the scope of ASC 310-30 are not considered troubled debt restructurings, regardless of otherwise meeting the definition of a troubled debt restructuring.

Loans receivable accounted for under ASC 310-30

The Company accounts for and evaluates acquired loans in accordance with the provisions of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. When loans exhibit evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all principal and interest payments in accordance with the terms of the loan agreement, the expected shortfall in future cash flows, as compared to the contractual amount due, is recognized as a non-accretable difference. Any excess of expected cash flows over the acquisition date fair value is known as the accretable yield, and is recognized as accretion income over the life of each pool. Contractual fees not expected to be collected are not included in ASC 310-30 contractual cash flows. Should fees be subsequently collected, the cash flows are accounted for as non 310-30 fee income in the period they are received. Loans that are accounted for under ASC 310-30 that meet the criteria for non-accrual of interest or are accounted for on the cost recovery method at the time of acquisition or subsequent to acquisition, may be considered performing, regardless of whether the client is contractually delinquent, if thetiming and expected cash flows on the loan pool in which the loan is included can be otherwise reasonably estimated and if collection of the new carrying value of such pool is expected.

The expected cash flows of individual loans accounted for under ASC 310-30 are periodically remeasured utilizing the same cash flow methodology used at the time of acquisition and subsequent decreases to the expected cash flows will generally result in a provision for loan losses charge in the Company’s consolidated statements of operations. Any increases to the loan cash flow projections are recognized within the loan’s respective loan pools on a prospective basis through an increase to the pool’s accretion income over its remaining life once any previously recorded provision expense has been reversed. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

f) Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The Company estimates fair value based on quoted market prices for similar loans in the secondary market. Gains or losses are recognized upon sale and are included as a component of gain on sale of mortgages, net in the consolidated statements of operations. Loans held for sale have primarily been fixed rate single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within 45 days. These loans are generally sold with the mortgage servicing rights released. Under limited circumstances, buyers may have recourse to return a purchased loan to the Company. Recourse conditions may include early payoff, early payment default, breach of representations or warranties, or documentation deficiencies.

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The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both "best efforts" and "mandatory delivery" forward loan sale commitments to mitigate the risk of potential increases or decreases in the values of loans that would result from the change in market rates for such loans. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities. They are carried on the consolidated statements of financial condition within other assets or other liabilities and changes in fair value are recorded as a component of gain on sale of mortgages, net in the consolidated statements of operations. The gross gains on loan sales are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

g) Allowance for loan losses—The allowance for loan losses represents management’s estimate of probable credit losses inherent in loans, including acquired loans to the extent necessary, as of the balance sheet date. The determination of the ALL takes into consideration, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan losses, the estimated loss emergence period, estimated default rates, any declines in cash flow assumptions from acquisition, loan structures, growth factors and other elements that warrant recognition. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the ALL. Such agencies may require the Company to recognize additions to the ALL or increases to adversely graded classified loans based on their judgments about information available to them at the time of their examinations.

The Company uses an internal risk rating system to indicate credit quality in the loan portfolio. The risk rating system is applied to all loans and uses a series of grades, which reflect management’s assessment of the risk attributable to loans based on an analysis of the borrower’s financial condition and ability to meet contractual debt service requirements. Loans that management perceives to have acceptable risk are categorized as “Pass” loans. The “Special Mention” loans represent loans that have potential credit weaknesses that deserve management’s close attention. Special mention loans include borrowers that have potential weaknesses or unwarranted risks that, unless corrected, may threaten the borrower’s ability to meet debt requirements. However, these borrowers are still believed to have the ability to respond to and resolve the financial issues that threaten their financial situation. Loans classified as “Substandard” are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. “Doubtful” loans are loans that management believes the collection of payments in accordance with the terms of the loan agreement is highly questionable and improbable. Loans accounted for under ASC 310-30, despite being 90 days or more past due or internally adversely classified, may be classified as performing upon and subsequent to acquisition, regardless of whether the client is contractually delinquent, if the timing and expected cash flows on the loan pool can be reasonably estimated and if collection of the carrying value of the loan pool loans is reasonably expected. Interest accrual is discontinued on doubtful loans and certain substandard loans that are excluded from ASC 310-30, as is more fully discussed in note 7.

The Company routinely evaluates adversely risk-rated credits for impairment. Impairment, if any, is typically measured for each loan based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flows, the loan’s estimated fair value, or the estimated fair value of the underlying collateral less costs of disposition for collateral dependent loans. General allowances are established for loans with similar characteristics. In this process, general allowance factors are based on an analysis of historical loss and recovery experience, if any, related to originated and acquired loans, as well as certain industry experience, with adjustments made for qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical experience. To the extent that the data supporting such factors has limitations, management’s judgment and experience play a key role in determining the allowance estimates.

Additions to the ALL are made by provisions for loan losses that are charged to operations. The allowance is decreased by charge-offs due to losses and is increased by provisions for loan losses and recoveries. When it is determined that specific loans, or portions thereof, are uncollectible, these amounts are charged off against the ALL. If repayment of the loan is collateral dependent, the fair value of the collateral, less cost to sell, is used to determine charge-off amounts.

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The Company maintains an ALL for loans accounted for under ASC 310-30 as a result of impairment to loan pools arising from the periodic re-measurement of these loans. Any impairment in the individual pool is generally recognized in the current period as provision for loan losses. Any improvement in the estimated cash flows, is generally not recognized immediately, but is instead reflected as an adjustment to the related loan pools yield on a prospective basis once any previously recorded impairment has been recaptured.

h) Premises and equipment—With the exception of premises and equipment acquired through business combinations, which are initially measured and recorded at fair value, purchased land is stated at cost, and buildings and equipment are carried at cost, including capitalized interest when appropriate, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. The Company generally assigns depreciable lives of 39 years for buildings, 7 to 15 years for building improvements, and 3 to 7 years for equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or remaining lease terms. Maintenance and repairs are charged to non-interest expense as incurred. The Company reviews premises and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposal is less than its carrying amount. In the case of a property that is subject to an operating lease that the Company no longer expects to use, a liability is recorded at the cease-use date equal to the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property, even if the entity does not intend to enter into a sublease. A ratable portion of the sublease allocation is then expensed until the property is subleased. Property and equipment that meet the held-for-sale criteria is recorded at the lower of its carrying amount or fair value less cost to sell and depreciation is ceased.

i) Goodwill and intangible assets—Goodwill is established and recorded if the consideration given during an acquisition transaction exceeds the fair value of the net assets received. Goodwill has an indefinite useful life and is not amortized, but is evaluated annually for potential impairment, or when events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Such events or circumstances may include deterioration in general economic conditions, deterioration in industry or market conditions, an increased competitive environment, a decline in market-dependent multiples or metrics, declining financial performance, entity-specific events or circumstances or a sustained decrease in share price (either in absolute terms or relative to peers). If the Company determines, based upon the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount no additional procedures are performed; however, if the Company determines that it is more likely than not that the fair value of the reporting unit is less than the carrying amount the Company will compare the fair value of the reporting unit to its carrying amount. Any excess of the carrying amount over fair value would indicate a potential impairment and the Company would proceed to perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment.

Intangible assets that have finite useful lives, such as core deposit intangibles, are amortized over their estimated useful lives. The Company’s core deposit intangible assets represent the value of the anticipated future cost savings that will result from the acquired core deposit relationships versus an alternative source of funding.

Judgment may be used in assessing goodwill and intangible assets for impairment. Estimates of fair value are based on projections of revenues, operating costs and cash flows of the reporting unit considering historical and anticipated future results, general economic and market conditions, as well as the impact of planned business or operational strategies. The valuations use a combination of present value techniques to measure fair value considering market factors. Additionally, judgment is used in determining the useful lives of finite-lived intangible assets. Adverse changes in the economic environment, operations of the reporting unit, or changes in judgments and projections could result in a significantly different estimate of the fair value of the reporting unit and could result in an impairment of goodwill and/or intangible assets.

j) Other real estate owned—OREO consists of property that has been foreclosed on or repossessed by deed in lieu of foreclosure. The assets are initially recorded at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ALL. Subsequent downward valuation adjustments, if any, in addition to gains and losses realized on sales and net operating expenses, are recorded in non-interest expense, while any subsequent write-ups are recorded in non-interest income. Costs associated with maintaining property, such as utilities and maintenance, are charged to expense in the period in which they occur, while costs relating to the development and improvement of property are

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capitalized to the extent the balance does not exceed fair value. All OREO acquired through acquisition is recorded at fair value, less cost to sell, at the date of acquisition.

k) Bank-owned life insurance—The Company purchased or acquired bank-owned life insurance ("BOLI") policies on certain associates of the Company. The Company is the owner and beneficiary of these policies. The BOLI is carried at net realizable value with changes in net realizable value recorded in non-interest income.

l) Securities purchased under agreements to resell and securities sold under agreements to repurchase—The Company periodically enters into purchases or sales of securities under agreements to resell or repurchase as of a specified future date. The securities purchased under agreements to resell are accounted for as collateralized financing transactions and are reflected as an asset in the consolidated statements of financial condition. The securities pledged by the counterparties are held by a third party custodian and valued daily. The Company may require additional collateral to ensure full collateralization for these transactions. The repurchase agreements are considered financing agreements and the obligation to repurchase assets sold is reflected as a liability in the consolidated statements of financial condition of the Company. The repurchase agreements are collateralized by debt securities that are under the control of the Company.

m) Stock-based compensation—The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation as amended by ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. The Company grants stock-based awards including stock options, restricted stock and performance stock units. Stock option grants are for a fixed number of common shares and are issued at exercise prices which are not less than the fair value of a share of stock at the date of grant. The options vest over a time period stated in each option agreement and may be subject to other performance vesting conditions, which require the related compensation expense to be recorded ratably over the requisite service period starting when such conditions become probable. Restricted stock is granted for a fixed number of shares, the transferability of which is restricted until such shares become vested according to the terms in the award agreement. Restricted shares may have multiple vesting qualifications, which can include time vesting of a set portion of the restricted shares and performance criterion, such as market criteria that are tied to specified market conditions of the Company’s common stock price and performance targets tied to the Company’s earnings per share.

The fair value of stock options is measured using a Black-Scholes model. The fair value of time-based restricted stock awards and performance stock units with performance based vesting criteria is based on the Company’s stock price on the date of grant. The fair value of performance stock units with market based vesting criteria is measured using a Monte Carlo simulation model. Compensation expense for the portion of the awards that contain performance and service vesting conditions is recognized over the requisite service period based on the fair value of the awards on the grant date. Compensation expense for the portion of the awards that contain a market vesting condition is recognized over the derived service period based on the fair value of the awards on the grant date. The amortization of stock-based compensation reflects any estimated forfeitures, and the expense realized in subsequent periods may be adjusted to reflect the actual forfeitures realized. The outstanding stock options primarily carry a maximum contractual term of ten years. To the extent that any award is forfeited, surrendered, terminated, expires, or lapses without being vested or exercised, the shares of stock subject to such award not delivered as a result thereof are again made available for awards under the Plan.

The Company accounts for all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized in the consolidated statements of operations as a component of income tax expense or benefit and are classified as an operating activity within the Company’s consolidated statements of cash flows. The tax effects of exercised, expired or vested awards are treated as discrete items in the reporting period in which they occur and may result in increased volatility in our effective tax rate. Cash paid by the Company when directly withholding shares for tax withholding purposes is classified as a financing activity in the consolidated statements of cash flows.

Prior to the Company’s adoption of ASU 2016-09 during 2016, excess tax benefits were recognized in additional paid-in capital and tax deficiencies were recognized either as an offset to accumulated excess tax benefits, if any, or in the consolidated statements of operations. Excess tax benefits were not recognized until the deduction reduced taxes payable.

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n) Warrants—The Company issued warrants to certain lead investors in 2009 and 2010. During 2015, the outstanding warrant contracts were modified and recorded at fair value as of the modification date using a Black-Scholes model with the change in fair value reported in the statement of operations as non-interest expense. The awards were classified as equity in the Company’s consolidated statements of financial condition. Prior to the modification, the exercise price and the number of warrants were subject to certain down-round provisions, whereby certain subsequent equity issuances at a price below the existing exercise price would result in a downward adjustment to the exercise price and an increase in the number of warrants, and as a result, the warrants were historically classified as a liability in the Company’s consolidated statements of financial condition with changes in the fair value each period reported in the statements of operations as non-interest expense.

During the first quarter of 2017, the remaining issued warrants were exercised in a non-cash transaction. Refer to the consolidated statements of changes in shareholders’ equity for additional details. 

o) Income taxes—The Company and its subsidiaries file U.S. federal and certain state income tax returns on a consolidated basis. Additionally, the Company and its subsidiaries file separate state income tax returns with various state jurisdictions. The provision for income taxes includes the income tax balances of the Company and all of its subsidiaries.

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Deferred tax assets and liabilities are adjusted for the effects of changes in tax rates in the period of change. The Company establishes a valuation allowance when management believes, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized.

The Company recognizes and measures income tax benefits based upon a two-step model: 1) a tax position must be more likely than not to be sustained based solely on its technical merits in order to be recognized; and 2) the benefit is measured as the largest dollar amount of that position that is more likely than not to be sustained upon settlement. The difference between the benefit recognized for a position in this model and the tax benefit claimed on a tax return is treated as an unrecognized tax benefit. The Company recognizes income tax related interest and penalties in other non-interest expense.

p) Income per share—The Company applies the two-class method of computing income per share as certain of the Company's restricted shares are entitled to non-forfeitable dividends and are therefore considered to be a class of participating securities. The two-class method allocates income according to dividends declared and participation rights in undistributed income. Basic income per share is computed by dividing income allocated to common shareholders by the weighted average number of common shares outstanding during each period. Diluted income per common share is computed by dividing income allocated to common shareholders by the weighted average common shares outstanding during the period, plus amounts representing the dilutive effect of stock options outstanding, certain unvested restricted shares, warrants to issue common stock, or other contracts to issue common shares (“common stock equivalents”) using the treasury stock method. Common stock equivalents are excluded from the computation of diluted earnings per common share in periods in which they have an anti-dilutive effect.

q) Interest Rate Swap Derivatives—The Company carries all derivatives on the statement of financial condition at fair value. All derivative instruments are recognized as either assets or liabilities depending on the rights or obligations under the contracts. All gains and losses on the derivatives due to changes in fair value are recognized in earnings each period.

The Company offers interest rate swap products to certain of its clients to manage potential changes in interest rates. Each contract between the Company and a client is offset with a contract between the Company and an institutional counterparty, thus minimizing the Company's exposure to rate changes. The Company's portfolio consists of a “matched book,” and as such, changes in fair value of the swap pairs will largely offset in earnings. In accordance with applicable accounting guidance, if certain conditions are met, a derivative may be designated as (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability, or of an unrecognized firm commitment, that are attributable to a particular risk (referred to as a fair value hedge) or (2) a hedge of the exposure to variability in the cash flows of a recognized asset or liability, or of a forecasted transaction, that is attributable to a particular risk (referred to as a cash flow hedge). The Company documents all hedging relationships at the inception of each hedging relationship and uses industry accepted methodologies and ranges to determine the effectiveness of each hedge. The fair value of the hedged item is calculated using the estimated future cash flows of the hedged item and applying discount rates equal to the market interest rate for the hedged item at the

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inception of the hedging relationship (inception benchmark interest rate plus an inception credit spread), adjusted for changes in the designated benchmark interest rate thereafter.

r) Treasury stock —When the Company acquires treasury stock, the sum of the consideration paid and direct transaction costs after tax is recognized as a deduction from equity. The cost basis for the reissuance of treasury stock is determined using a first-in, first-out basis. To the extent that the reissuance price is more than the cost basis (gain), the excess is recorded as an increase to additional paid-in capital in the consolidated statements of financial condition. If the reissuance price is less than the cost basis (loss), the difference is recorded to additional paid-in capital to the extent there is a cumulative treasury stock paid-in capital balance. Any loss in excess of the cumulative treasury stock paid-in capital balance is charged to retained earnings.

Note 3 Recent Accounting Pronouncements

Revenue from Contracts with Customers—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This update supersedes revenue recognition requirements in ASC Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification. The new guidance stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides specific steps that entities should apply in order to achieve this principle. The amendments are effective for interim and annual periods beginning after December 15, 2017, with early application permitted for interim and annual periods beginning after December 15, 2016. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption.

The new guidance does not apply to revenue associated with financial assets and liabilities including loans, leases, securities, and derivatives that are accounted for under other GAAP. Accordingly, the majority of the Company’s revenues will not be affected. The Company has completed its review of revenue streams and contracts with customers and has determined certain service charges, bank card fees and real estate sales are within the scope of the ASU, but has not identified changes to the timing or amount of revenue recognition. The Company adopted ASU No. 2014-09 on January 1, 2018 utilizing the modified retrospective approach. Accounting policies and procedures did not change materially since the principals of revenue recognition from the ASU are largely consistent with existing guidance and current practices applied by the Company. The Company continues to assess the expanded revenue disclosure requirements under the new standard.

Leases—In February 2016, the FASB issued ASU 2016-02, Leases. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statements. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the amendments in the update is permitted. The Company expects to adopt ASU 2016-02 in the first quarter of 2019 and is currently in the process of evaluating the impact of the ASU's adoption on the Company's consolidated financial statements.  

Financial Instruments - Credit Losses—In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This update replaces the current incurred loss methodology for recognizing credit losses with a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This amendment broadens the information that an entity must consider in developing its expected credit loss estimates. Additionally, the update amends the accounting for credit losses for available-for-sale debt securities and purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. This update requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s loan portfolio. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption in fiscal years beginning after December 15, 2018 is permitted. The amendment requires the use of the modified

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retrospective approach for adoption. The Company is in the process of evaluating the impact of the ASU’s adoption on the Company’s consolidated financial statements.

Statement of Cash Flows – Restricted Cash—In November 2016, the FASB issued ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), whichaddresses classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires an entity’s reconciliation of the beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include in cash and cash equivalents amounts general described as restricted cash and restricted cash equivalents. The ASU does not define restricted cash or restricted cash equivalents, but an entity will need to disclose the nature of the restrictions. The ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Entities should apply this ASU using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 on January 1, 2018 with no material impact to the consolidated financial statements. 

Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities—In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted, including in an interim period. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated statements of financial condition as of the date of adoption. The Company is in the process of evaluating the impact of the ASU’s adoption on the Company’s consolidated financial statements; however, the impact is not expected to be material. 

Reclassification of Certain Tax Effects—In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments eliminate the stranded tax effects that were created as a result of the reduction of historical U.S. federal corporate income tax rate to the newly enacted U.S. federal corporate income tax rate. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company early adopted ASU 2018-02 in the first quarter of 2018, resulting in a $1.5 million reclassification from accumulated other comprehensive income to retained earnings on the consolidated statement of financial condition and the consolidated statement of changes in shareholders’ equity.

The Company reviewed ASU 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825), ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments and ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment and ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) and does not expect the adoption of these pronouncements to have a material impact on its financial statements.

Note 4 Investment Securities

The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.1 billion at December 31, 2017 and included $0.8 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities. At December 31, 2016, investment securities totaled $1.2 billion and included $0.9 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities.

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Available-for-sale

At December 31, 2017 and 2016, the Company held $855.3 million and $884.2 million of available-for-sale investment securities, respectively. Available-for-sale securities are summarized as follows as of the dates indicated:

	December 31, 2017
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	167,269	$	2,371	$	(992)	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		702,107		351		(17,228)		685,230
Municipal securities		1,054		—		(6)		1,048
Other securities		419		—		—		419
Total investment securities available-for-sale	$	870,849	$	2,722	$	(18,226)	$	855,345

	December 31, 2016
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	223,781	$	3,909	$	(530)	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		666,616		2,124		(16,001)		652,739
Municipal securities		3,921		—		(7)		3,914
Other securities		419		—		—		419
Total investment securities available-for-sale	$	894,737	$	6,033	$	(16,538)	$	884,232

At December 31, 2017 and 2016, mortgage-backed securities represented primarily all of the Company’s available-for-sale investment portfolio and all mortgage-backed securities were backed by government sponsored enterprises (“GSE”) collateral such as Federal Home Loan Mortgage Corporation (“FHLMC”) and Federal National Mortgage Association (“FNMA”), and the government sponsored agency Government National Mortgage Association (“GNMA”).

The tables below summarize the available-for-sale securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	62,178	$	(408)	$	36,086	$	(584)	$	98,264	$	(992)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		162,346		(830)		412,967		(16,398)		575,313		(17,228)
Municipal securities		514		(6)		—		—		514		(6)
Total	$	225,038	$	(1,244)	$	449,053	$	(16,982)	$	674,091	$	(18,226)

88

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	100,898	$	(530)	$	—	$	—	$	100,898	$	(530)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		137,576		(2,976)		385,707		(13,025)		523,283		(16,001)
Municipal securities		3,058		(7)		—		—		3,058		(7)
Total	$	241,532	$	(3,513)	$	385,707	$	(13,025)	$	627,239	$	(16,538)

The unrealized losses in the Company’s investments portfolio at December 31, 2017 were caused by changes in interest rates. The portfolio included 87 securities, having an aggregate fair value of $674.1 million, which were in an unrealized loss position at December 31, 2017. During the twelve months ended December 31, 2017, the Company recorded $0.2 million of other-than-temporary impairment (OTTI) included in other non-interest expense on the consolidated statements of operations. The OTTI charge was on a single municipal security, with an aggregated fair value of $0.3 million at December 31, 2017.

The unrealized losses in the Company’s investment portfolio at December 31, 2016 were caused by changes in interest rates. The portfolio included 61 securities, with an aggregate fair value of $627.2 million, which were in an unrealized loss position at December 31, 2016.

Management evaluated all of the available-for-sale securities in an unrealized loss position and concluded no OTTI existed at December 31, 2017 and 2016. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the Federal Reserve Bank, and Federal Home Loan Bank (“FHLB”), if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $334.6 million and $373.7 million at December 31, 2017 and 2016, respectively. Certain investment securities may also be pledged as collateral for the line of credit at the FHLB; at December 31, 2017 or December 31, 2016, no securities were pledged for this purpose.

Mortgage-backed securities do not have a single maturity date and actual maturities may differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 3.4 years and 3.4 years at December 31, 2017 and 2016, respectively. This estimate is based on assumptions and actual results may differ. At December 31, 2017 and 2016, the duration of the total available-for-sale investment portfolio was 3.1 years and 3.2 years, respectively.

As of December 31, 2017, municipal securities with an amortized cost and fair value of $0.3 million were due in one year, municipal securities with an amortized cost and fair value of $0.2 million were due after one year through five years, while municipal securities with an amortized cost and fair value of $0.5 million were due after five years through ten years. Other securities of $0.4 million as of December 31, 2017, have no stated contractual maturity date.

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Held-to-maturity

At December 31, 2017 and 2016, the Company held $258.7 million and $332.5 million of held-to-maturity investment securities, respectively. Held-to-maturity investment securities are summarized as follows as of the dates indicated:

	December 31, 2017
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	204,352	$	151	$	(455)	$	204,048
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		54,378		—		(1,655)		52,723
Total investment securities held-to-maturity	$	258,730	$	151	$	(2,110)	$	256,771

	December 31, 2016
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	263,411	$	1,685	$	(234)	$	264,862
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		69,094		16		(1,399)		67,711
Total investment securities held-to-maturity	$	332,505	$	1,701	$	(1,633)	$	332,573

The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	149,182	$	(220)	$	17,506	$	(235)	$	166,688	$	(455)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		6,460		(65)		46,264		(1,590)		52,724		(1,655)
Total	$	155,642	$	(285)	$	63,770	$	(1,825)	$	219,412	$	(2,110)

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	27,799	$	(234)	$	—	$	—	$	27,799	$	(234)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		26,992		(357)		32,146		(1,042)		59,138		(1,399)
Total	$	54,791	$	(591)	$	32,146	$	(1,042)	$	86,937	$	(1,633)

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The held-to-maturity portfolio included 36 securities, having an aggregate fair value of $219.4 million, which were in an unrealized loss position at December 31, 2017, compared to 15 securities, with a fair value of $86.9 million, at December 31, 2016.

Management evaluated all of the held-to-maturity securities in an unrealized loss position and concluded that no OTTI existed at December 31, 2017 or December 31, 2016. The unrealized losses in the Company's investments at December 31, 2017, were caused by changes in interest rates. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

The carrying value of held-to-maturity investment securities pledged as collateral totaled $142.0 million and $119.2 million at December 31, 2017 and 2016, respectively.

Actual maturities of mortgage-backed securities may differ from scheduled maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of December 31, 2017 and 2016 was 3.1 years and 3.5 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 2.8 years and 3.2 years as of December 31, 2017 and 2016, respectively.

Note 5 Non-marketable Securities

Non-marketable securities include Federal Reserve Bank stock and FHLB stock. At December 31, 2017, the Company held $9.2 million of Federal Reserve Bank stock and $5.8 million of FHLB stock for regulatory or debt facility purposes. At December 31, 2016, the Company held $9.2 million of Federal Reserve Bank stock, $5.2 million of FHLB stock and $0.5 million of non-negotiable certificates of deposit acquired from the Pine River acquisition.

These are restricted securities which, lacking a market, are carried at cost. There have been no identified events or changes in circumstances that may have an adverse effect on the investments carried at cost. Management evaluated all of the non-marketable securities and concluded that no OTTI existed at December 31, 2017 or December 31, 2016.

Note 6 Loans

The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.

The tables below show the loan portfolio composition including carrying value by segment of loans accounted for under ASC 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality, and loans not accounted for under this guidance, which includes our originated loans, as of the dates shown. The carrying value of loans is net of discounts on loans excluded from ASC 310-30, and fees and costs of $4.3 million and $6.3 million at December 31, 2017 and 2016, respectively. At December 31, 2016,  $14.4 million of non 310-30 loans were held-for-sale, most of which were in the residential real estate segment. The sale of these loans was completed in connection with the four banking center divestitures in the second quarter of 2017.

	December 31, 2017
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	29,475	$	1,845,130	$	1,874,605	59.0%
Commercial real estate non-owner occupied		77,908		485,141		563,049	17.7%
Residential real estate		12,759		703,478		716,237	22.5%
Consumer		481		24,575		25,056	0.8%
Total	$	120,623	$	3,058,324	$	3,178,947	100.0%

91

	December 31, 2016
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	39,280	$	1,521,150	$	1,560,430	54.6%
Commercial real estate non-owner occupied		89,150		437,642		526,792	18.4%
Residential real estate		16,524		728,361		744,885	26.0%
Consumer		898		27,916		28,814	1.0%
Total	$	145,852	$	2,715,069	$	2,860,921	100.0%

Delinquency for loans excluded from ASC 310-30 is shown in the following tables at December 31, 2017 and 2016:

	December 31, 2017
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days  past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	554	$	117	$	1,389	$	2,060	$	1,373,962	$	1,376,022	$	150	$	7,767
Owner occupied commercial real estate		696		—		1,983		2,679		270,074		272,753		—		3,478
Agriculture		585		—		701		1,286		137,609		138,895		—		2,003
Energy		—		—		1,645		1,645		55,815		57,460		—		1,645
Total commercial		1,835		117		5,718		7,670		1,837,460		1,845,130		150		14,893
Commercial real estate non-owner occupied:
Construction		—		—		179		179		107,502		107,681		—		179
Acquisition/development		1,097		—		—		1,097		13,318		14,415		—		—
Multifamily		—		—		—		—		26,947		26,947		—		—
Non-owner occupied		56		—		574		630		335,468		336,098		—		605
Total commercial real estate		1,153		—		753		1,906		483,235		485,141		—		784
Residential real estate:
Senior lien		1,167		885		1,396		3,448		643,034		646,482		—		4,724
Junior lien		233		91		41		365		56,631		56,996		—		459
Total residential real estate		1,400		976		1,437		3,813		699,665		703,478		—		5,183
Consumer		157		6		5		168		24,407		24,575		—		140
Total loans excluded from ASC 310-30	$	4,545	$	1,099	$	7,913	$	13,557	$	3,044,767	$	3,058,324	$	150	$	21,000

	December 31, 2016
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	3,134	$	4,009	$	1,078	$	8,221	$	1,066,475	$	1,074,696	$	—	$	8,688
Owner occupied commercial real estate		583		216		56		855		220,689		221,544		—		2,056
Agriculture		501		—		—		501		134,136		134,637		—		1,905
Energy		2		—		6,548		6,550		83,723		90,273		—		12,645
Total commercial		4,220		4,225		7,682		16,127		1,505,023		1,521,150		—		25,294
Commercial real estate non-owner occupied:
Construction		—		—		—		—		90,314		90,314		—		—
Acquisition/development		—		—		—		—		13,306		13,306		—		—
Multifamily		—		—		—		—		24,954		24,954		—		—
Non-owner occupied		—		—		28		28		309,040		309,068		—		66
Total commercial real estate		—		—		28		28		437,614		437,642		—		66
Residential real estate:
Senior lien		888		645		1,458		2,991		672,699		675,690		—		4,522
Junior lien		115		61		22		198		52,473		52,671		—		654
Total residential real estate		1,003		706		1,480		3,189		725,172		728,361		—		5,176
Consumer		83		8		—		91		27,825		27,916		—		181
Total loans excluded from ASC 310-30	$	5,306	$	4,939	$	9,190	$	19,435	$	2,695,634	$	2,715,069	$	—	$	30,717

92

Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Pooled loans accounted for under ASC 310-30 that are 90 days or more past due and still accreting are generally considered to be performing and therefore are not included in the tables above. Non-accrual loans include troubled debt restructurings on non-accrual status.

Non-accrual loans excluded from the scope of ASC 310-30 totaled $21.0 million at December 31, 2017, representing a decrease of $9.7 million, or 31.6%, from December 31, 2016, due to charge-offs of two energy loans totaling $7.5 million and one commercial and industrial loan totaling $2.5 million. In addition, one previously identified energy loan of $2.2 million at December 31, 2017 was placed back on accrual during the third quarter of 2017. These decreases were partially offset by one commercial and industrial loan totaling $3.7 million placed on non-accrual during the fourth quarter of 2017.

Credit exposure for all loans as determined by the Company’s internal risk rating system was as follows at December 31, 2017 and 2016:

	December 31, 2017
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,349,116	$	10,829	$	14,824	$	1,253	$	1,376,022
Owner occupied commercial real estate		250,224		17,030		5,424		75		272,753
Agriculture		118,068		18,824		1,870		133		138,895
Energy		55,814		—		1,646		—		57,460
Total commercial		1,773,222		46,683		23,764		1,461		1,845,130
Commercial real estate non-owner occupied:
Construction		107,502		—		179		—		107,681
Acquisition/development		14,415		—		—		—		14,415
Multifamily		24,817		—		2,130		—		26,947
Non-owner occupied		333,225		1,396		1,477		—		336,098
Total commercial real estate		479,959		1,396		3,786		—		485,141
Residential real estate:
Senior lien		641,294		91		5,097		—		646,482
Junior lien		56,172		—		824		—		56,996
Total residential real estate		697,466		91		5,921		—		703,478
Consumer		24,432		1		142		—		24,575
Total loans excluded from ASC 310-30	$	2,975,079	$	48,171	$	33,613	$	1,461	$	3,058,324
Loans accounted for under ASC 310-30:
Commercial	$	23,954	$	1,070	$	4,451	$	—	$	29,475
Commercial real estate non-owner occupied		50,537		883		26,488		—		77,908
Residential real estate		10,072		1,055		1,632		—		12,759
Consumer		327		9		145		—		481
Total loans accounted for under ASC 310-30	$	84,890	$	3,017	$	32,716	$	—	$	120,623
Total loans	$	3,059,969	$	51,188	$	66,329	$	1,461	$	3,178,947

93

	December 31, 2016
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,041,326	$	7,243	$	25,636	$	491	$	1,074,696
Owner occupied commercial real estate		202,036		9,371		10,137		—		221,544
Agriculture		123,809		8,922		1,906		—		134,637
Energy		77,619		—		7,811		4,843		90,273
Total commercial		1,444,790		25,536		45,490		5,334		1,521,150
Commercial real estate non-owner occupied:
Construction		90,099		—		215		—		90,314
Acquisition/development		10,758		2,548		—		—		13,306
Multifamily		22,495		238		2,221		—		24,954
Non-owner occupied		300,922		5,895		2,251		—		309,068
Total commercial real estate		424,274		8,681		4,687		—		437,642
Residential real estate:
Senior lien		669,148		1,215		5,316		11		675,690
Junior lien		51,250		178		1,243		—		52,671
Total residential real estate		720,398		1,393		6,559		11		728,361
Consumer		27,669		59		188		—		27,916
Total loans excluded from ASC 310-30	$	2,617,131	$	35,669	$	56,924	$	5,345	$	2,715,069
Loans accounted for under ASC 310-30:
Commercial	$	27,436	$	610	$	11,234	$	—	$	39,280
Commercial real estate non-owner occupied		38,895		967		45,520		3,768		89,150
Residential real estate		12,477		1,327		2,720		—		16,524
Consumer		721		17		160		—		898
Total loans accounted for under ASC 310-30	$	79,529	$	2,921	$	59,634	$	3,768	$	145,852
Total loans	$	2,696,660	$	38,590	$	116,558	$	9,113	$	2,860,921

Non 310-30 special mention loans increased $12.5 million from December 31, 2016 due to upgrades from substandard and doubtful within the commercial and industrial sector and downgrades from pass within the commercial and industrial sector, partially offset by payoffs in the commercial and industrial and owner-occupied commercial real estate sectors. Non 310-30 substandard loans decreased $23.3 million from December 31, 2016 primarily due to paydowns and upgrades to special mention and pass within the commercial and industrial, owner-occupied commercial real estate and energy sectors. Non 310-30 doubtful loans decreased $3.9 million from December 31, 2016 due to energy loan charge-offs during the period.

Impaired Loans

Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan agreement. Impaired loans are comprised of loans excluded from ASC 310-30 on non-accrual status, loans in bankruptcy, and troubled debt restructurings (“TDRs”) described below. If a specific allowance is warranted based on the borrower’s overall financial condition, the specific allowance is calculated based on discounted cash flows using the loan’s initial contractual effective interest rate or the fair value of the collateral less selling costs for collateral dependent loans. At December 31, 2017, the Company measured $20.3 million of impaired loans based on the fair value of the collateral less selling costs and $2.3 million of impaired loans using discounted cash flows and the loan’s initial contractual effective interest rate. Impaired loans totaling $8.3 million that individually were less than $250 thousand each, were measured through the general ALL reserves due to their relatively small size.

At December 31, 2017 and 2016, the Company’s recorded investment in impaired loans were $30.9 million and $38.3 million, respectively, of which $8.5 million and $5.8 million, respectively, were accruing TDRs. Impaired loans at December 31, 2017 were primarily comprised of seven relationships totaling $14.1 million. Four of the relationships were in the commercial and industrial sector totaling $9.0 million, two of the relationships were in the energy sector totaling $3.9 million and one relationship was in the agriculture sector totaling $1.2 million. Impaired loans had a collective related allowance for loan losses allocated to them of $1.5 million and $2.4 million at December 31, 2017 and 2016, respectively.

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Additional information regarding impaired loans at December 31, 2017 and 2016 is set forth in the table below:

	December 31, 2017						December 31, 2016
					Allowance						Allowance
	Unpaid				for loan		Unpaid				for loan
	principal		Recorded		losses		principal		Recorded		losses
	balance		investment		allocated		balance		investment		allocated
With no related allowance recorded:
Commercial:
Commercial and industrial	$	6,481	$	5,055	$	—	$	8,671	$	7,495	$	—
Owner occupied commercial real estate		4,186		3,934		—		3,350		3,197		—
Agriculture		1,502		1,245		—		2,044		1,987		—
Energy		8,661		3,861		—		17,142		6,105		—
Total commercial		20,830		14,095		—		31,207		18,784		—
Commercial real estate non-owner occupied:
Construction		215		179		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		29		29		—		33		33		—
Non-owner occupied		901		853		—		394		343		—
Total commercial real estate		1,145		1,061		—		427		376		—
Residential real estate:
Senior lien		333		309		—		1,551		1,426		—
Junior lien		—		—		—		54		51		—
Total residential real estate		333		309		—		1,605		1,477		—
Consumer		—		—		—		4		4		—
Total impaired loans with no related allowance recorded	$	22,308	$	15,465	$	—	$	33,243	$	20,641	$	—
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,919	$	5,339	$	1,329	$	3,495	$	3,464	$	492
Owner occupied commercial real estate		873		713		4		957		642		2
Agriculture		2,122		2,083		133		—		—		—
Energy		—		—		—		11,216		6,548		1,866
Total commercial		10,914		8,135		1,466		15,668		10,654		2,360
Commercial real estate non-owner occupied:
Construction		—		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		207		200		1		261		255		1
Total commercial real estate		207		200		1		261		255		1
Residential real estate:
Senior lien		6,481		5,753		24		5,646		5,016		31
Junior lien		1,295		1,179		8		1,781		1,532		14
Total residential real estate		7,776		6,932		32		7,427		6,548		45
Consumer		146		141		1		188		184		2
Total impaired loans with a related allowance recorded	$	19,043	$	15,408	$	1,500	$	23,544	$	17,641	$	2,408
Total impaired loans	$	41,351	$	30,873	$	1,500	$	56,787	$	38,282	$	2,408

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The table below shows additional information regarding the average recorded investment and interest income recognized on impaired loans for the periods presented:

	For the years ended
	December 31, 2017				December 31, 2016				December 31, 2015
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	5,609	$	152	$	7,909	$	252	$	5,049	$	266
Owner occupied commercial real estate		4,155		80		3,249		92		2,221		83
Agriculture		1,422		244		1,830		—		1,961		—
Energy		8,004		156		12,565		—		5,679		—
Total Commercial		19,190		632		25,553		344		14,910		349
Commercial real estate non-owner occupied:
Construction		—		—		—		—		188		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		878		22		368		22		157		—
Total commercial real estate		878		22		368		22		345		—
Residential real estate:
Senior lien		326		—		1,466		19		956		15
Junior lien		—		—		54		2		113		—
Total residential real estate		326		—		1,520		21		1,069		15
Consumer		—		—		4		—		—		—
Total impaired loans with no related allowance recorded	$	20,394	$	654	$	27,445	$	387	$	16,324	$	363
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,331	$	—	$	3,545	$	198	$	6,273	$	1
Owner occupied commercial real estate		747		20		703		20		1,230		27
Agriculture		2,092		5		162		5		276		4
Energy		—		—		10,008		—		3,092		—
Total Commercial		10,170		25		14,418		223		10,871		32
Commercial real estate non-owner occupied:
Construction		188		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		30		1		34		2		60		1
Non-owner occupied		213		9		268		13		1,667		48
Total commercial real estate		431		10		302		15		1,727		49
Residential real estate:
Senior lien		5,986		67		5,200		88		5,911		119
Junior lien		1,225		42		1,600		56		1,725		51
Total residential real estate		7,211		109		6,800		144		7,636		170
Consumer		163		—		196		—		92		1
Total impaired loans with a related allowance recorded	$	17,975	$	144	$	21,716	$	382	$	20,326	$	252
Total impaired loans	$	38,369	$	798	$	49,161	$	769	$	36,650	$	615

Interest income recognized on impaired loans noted in the table above, primarily represents interest earned on accruing troubled debt restructurings. Interest income recognized on impaired loans during the years ended December 31, 2017, 2016 and 2015 was $0.8 million, $0.8 million and $0.6 million, respectively. 

Troubled debt restructurings

The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include restructuring a loan

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to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Additionally, if a borrower’s repayment obligation has been discharged by a court, and that debt has not been reaffirmed by the borrower, regardless of past due status, the loan is considered to be a TDR.

Non-accruing TDRs at December 31, 2017 and 2016 totaled $7.3 million and $16.7 million, respectively.

During 2017, the Company restructured eleven loans with a recorded investment of $2.1 million at December 31, 2017 to facilitate repayment. All of the loan modifications were a reduction of the principal payment, a reduction in interest rate, or an extension of term. Loan modifications to loans accounted for under ASC 310-30 are not considered TDRs. The tables below provide additional information related to accruing TDRs at December 31, 2017 and 2016:

	December 31, 2017
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	6,595	$	7,308	$	7,171	$	2,041
Commercial real estate non-owner occupied		455		489		500		—
Residential real estate		1,409		1,461		1,420		2
Consumer		1		3		1		—
Total	$	8,460	$	9,261	$	9,092	$	2,043

	December 31, 2016
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	3,302	$	3,440	$	3,464	$	100
Commercial real estate non-owner occupied		538		572		590		—
Residential real estate		1,920		1,996		1,969		2
Consumer		7		9		7		—
Total	$	5,767	$	6,017	$	6,030	$	102

The following table summarizes the Company’s carrying value of non-accrual TDRs as of December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Commercial	$	5,808	$	15,265
Commercial real estate non-owner occupied		—		—
Residential real estate		1,336		1,301
Consumer		111		142
Total non-accruing TDRs	$	7,255	$	16,708

At December 31, 2017 and 2016, the Company had $8.5 million and $5.8 million, respectively, of accruing TDRs that had been restructured from the original terms in order to facilitate repayment. Accrual of interest is resumed on loans that were on non-accrual only after the loan has performed sufficiently. The Company had three TDRs that were modified within the past twelve months and had defaulted on their restructured terms. The defaulted TDRs consisted of two commercial loans totaling $3.2 million, and one small residential loan. Non-accruing TDRs decreased $9.4 million from December 31, 2016 due to charge-offs within the commercial loan segment. The allowance for loan losses related to troubled debt restructurings on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as troubled debt restructurings.

During 2016, the Company had five TDRs that were modified within the past twelve months and had defaulted on their restructured terms. The defaulted TDRs consisted of two commercial loans totaling $6.4 million and three residential loans totaling $0.4 million. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due on principal or interest.

Loans accounted for under ASC 310-30

Loan pools accounted for under ASC Topic 310-30 are periodically re-measured to determine expected future cash flows. In determining the expected cash flows, the timing of cash flows and prepayment assumptions for smaller homogeneous loans are based on statistical models that take into account factors such as the loan interest rate, credit profile of the borrowers, the

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years in which the loans were originated, and whether the loans are fixed or variable rate loans. Prepayments may be assumed on loans if circumstances specific to that loan warrant a prepayment assumption. The re-measurement of loans accounted for under ASC 310-30 resulted in the following changes in the carrying amount of accretable yield during 2017 and 2016:

	December 31, 2017		December 31, 2016
Accretable yield beginning balance	$	60,476	$	84,194
Reclassification from non-accretable difference		11,398		14,316
Reclassification to non-accretable difference		(2,801)		(4,778)
Accretion		(22,505)		(33,256)
Accretable yield ending balance	$	46,568	$	60,476

Below is the composition of the net book value for loans accounted for under ASC 310-30 at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Contractual cash flows	$	489,892	$	537,611
Non-accretable difference		(322,701)		(331,283)
Accretable yield		(46,568)		(60,476)
Loans accounted for under ASC 310-30	$	120,623	$	145,852

Note 7 Allowance for Loan Losses

The tables below detail the Company’s allowance for loan losses and recorded investment in loans as of and for the years ended December 31, 2017 and 2016:

	Year ended December 31, 2017
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Non 310-30 beginning balance		18,821		5,422		4,387		319		28,949
Charge-offs		(10,342)		—		(236)		(737)		(11,315)
Recoveries		99		20		129		185		433
Provision		12,762		141		(315)		538		13,126
Non 310-30 ending balance		21,340		5,583		3,965		305		31,193
ASC 310-30 beginning balance		—		220		—		5		225
Charge-offs		—		—		—		—		—
Recoveries		—		—		—		—		—
Provision (recoupment)		45		(194)		—		(5)		(154)
ASC 310-30 ending balance		45		26		—		—		71
Ending balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	1,466	$	2	$	32	$	1	$	1,501
Non 310-30 loans collectively evaluated for impairment		19,874		5,581		3,933		304		29,692
ASC 310-30 loans		45		26		—		—		71
Total ending allowance balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Loans:
Non 310-30 individually evaluated for impairment	$	22,232	$	1,260	$	7,240	$	141	$	30,873
Non 310-30 collectively evaluated for impairment		1,822,898		483,881		696,238		24,434		3,027,451
ASC 310-30 loans		29,475		77,908		12,759		481		120,623
Total loans	$	1,874,605	$	563,049	$	716,237	$	25,056	$	3,178,947

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	Year ended December 31, 2016
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	17,261	$	4,166	$	5,281	$	411	$	27,119
Non 310-30 beginning balance		16,473		3,939		5,245		385		26,042
Charge-offs		(20,684)		(280)		(408)		(771)		(22,143)
Recoveries		89		123		108		274		594
Provision		22,943		1,640		(558)		431		24,456
Non 310-30 ending balance		18,821		5,422		4,387		319		28,949
ASC 310-30 beginning balance		788		227		36		26		1,077
Charge-offs		—		(41)		—		(6)		(47)
Recoveries		—		—		—		—		—
(Recoupment) provision		(788)		34		(36)		(15)		(805)
ASC 310-30 ending balance		—		220		—		5		225
Ending balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	2,360	$	1	$	46	$	2	$	2,409
Non 310-30 loans collectively evaluated for impairment		16,461		5,421		4,341		317		26,540
ASC 310-30 loans		—		220		—		5		225
Total ending allowance balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Loans:
Non 310-30 individually evaluated for impairment	$	29,411	$	631	$	7,346	$	188	$	37,576
Non 310-30 collectively evaluated for impairment		1,491,739		437,011		721,015		27,728		2,677,493
ASC 310-30 loans		39,280		89,150		16,524		898		145,852
Total loans	$	1,560,430	$	526,792	$	744,885	$	28,814	$	2,860,921

In evaluating the loan portfolio for an appropriate ALL level, non-impaired loans that were not accounted for under ASC 310-30 were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of applying loss ratios and determining applicable subjective adjustments to the ALL. The application of subjective adjustments was based upon qualitative risk factors, including economic trends and conditions, industry conditions, asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

Net charge-offs on non 310-30 loans during 2017 were $10.9 million. Management’s evaluation of credit quality resulted in a provision for loan losses on the non 310-30 loans of $13.1 million during 2017. During 2016, the Company had $21.6 million of net charge-offs on non 310-30 loans, of which $19.1 million were from the energy portfolio, and recorded a provision for loan losses on non 310-30 loans of $24.5 million, or which $18.9 million were from the energy portfolio.

During 2017 and 2016, the Company re-estimated the expected cash flows of the loan pools accounted for under ASC 310-30. The re-measurement in 2017 resulted in a net recoupment of $154 thousand, due to a $194 thousand recoupment in the non-owner occupied commercial real estate segment. The re-measurement in 2016 resulted in a net recoupment of $805 thousand, which was comprised primarily of a $788 thousand recoupment in the commercial segment.

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Note 8 Premises and Equipment

Premises and equipment consisted of the following at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Land	$	28,698	$	29,864
Buildings and improvements		73,703		69,980
Equipment		46,091		42,067
Total premises and equipment, at cost		148,492		141,911
Less: accumulated depreciation and amortization		(54,784)		(46,240)
Premises and equipment, net	$	93,708	$	95,671

The Company incurred $7.6 million, $8.7 million and $10.1 million of depreciation expense during 2017, 2016 and 2015, respectively, as a component of occupancy and equipment expense in the consolidated statements of operations. The Company disposed of $2.3 million, $3.5 million and $0.1 million of premises and equipment, net, during 2017, 2016 and 2015, respectively.

During 2017, the Company consolidated two banking centers and completed the divestiture of four banking centers, resulting in a gain of $2.9 million included in non-interest income in the consolidate statements of operations. The divestiture included buildings classified as held-for-sale, which were adjusted to the lower of the carrying amount or fair value less cost to sell and totaled $1.6 million at December 31, 2016.

During 2016, the Company consolidated seven banking centers resulting in certain buildings classified as held-for-sale, which were adjusted to the lower of the carrying amount or fair value less cost to sell. The adjustment totaled $1.4 million and is included in the consolidated statements of operations at December 31, 2015.

Space in certain facilities is leased under operating leases. Below is a summary of future minimum lease payments as of December 31, 2017:

Years ending December 31,	Amount
2018	$	3,158
2019		3,092
2020		2,981
2021		3,091
2022		3,052
Thereafter		12,210
Total	$	27,584

Note 9 Other Real Estate Owned

A summary of the activity in the OREO balances during 2017 and 2016 is as follows:

	For the years ended December 31,
	2017		2016
Beginning balance	$	15,662	$	20,814
Transfers from loan portfolio, at fair value		1,800		6,868
Impairments		(766)		(298)
Sales, net		(6,205)		(11,722)
Ending balance	$	10,491	$	15,662

The OREO balances excluded $0.7 million and $1.6 million at December 31, 2017 and 2016, respectively, of the Company’s minority interests in OREO, which are held by outside banks where the Company was not the lead bank and does not have a controlling interest. The Company maintains a receivable in other assets for these minority interests. Included in Sales, net are gains of $4.2 million and $4.4 million for the years ended December 31, 2017 and 2016, respectively.

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Note 10 Goodwill and Intangible Assets

In connection with our acquisitions, the Company recorded goodwill of $59.6 million and core deposit intangible assets of $38.4 million. The Company is amortizing the core deposit intangibles on a straight line basis over 7 years from the date of the respective acquisitions, which represents the expected useful life of the assets. The Company recognized core deposit intangible amortization expense of $5.3 million, $5.5 million and $5.4 million during 2017, 2016 and 2015, respectively. The following table shows the estimated future amortization expense as of December 31, 2017:

Years ending December 31,		Amount
2018	$	1,122
2019		135
2020		135
2021		135
2022		79

The accumulated amortization of the core deposit intangible assets was $36.8 million and $31.5 million at December 31, 2017 and 2016, respectively. At December 31, 2017, the core deposit intangible for the Bank Midwest and Hillcrest Bank acquisitions were fully amortized.

The Company had goodwill of $59.6 million at December 31, 2017 and 2016. The goodwill is measured as the excess of the fair value of consideration paid over the fair value of assets acquired. No goodwill impairment was recorded during 2017, 2016 or 2015.

Note 11 Deposits

Total deposits were $4.0 billion and $3.9 billion at December 31, 2017 and 2016, respectively. Time deposits were $1.1 billion and $1.2 billion at December 31, 2017 and 2016, respectively.  At December 31, 2016, deposits totaling $103.0 million were held-for-sale, including $51.6 million of time deposits. The following table summarizes the Company’s time deposits by remaining contractual maturity:

Years ending December 31,	Amount
2018	$	684,622
2019		308,139
2020		100,275
2021		7,044
2022		14,389
Thereafter		3,581
Total time deposits	$	1,118,050

The Company incurred interest expense on deposits as follows during the periods indicated:

	For the years ended December 31,
	2017		2016		2015
Interest bearing demand deposits	$	445	$	369	$	315
Money market accounts		4,077		3,600		3,372
Savings accounts		1,481		1,016		837
Time deposits		10,169		8,978		9,085
Total	$	16,172	$	13,963	$	13,609

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The Federal Reserve System requires cash balances to be maintained at the Federal Reserve Bank based on certain deposit levels. There was no minimum reserve requirement for the Bank at December 31, 2017. The aggregate amount of certificates of deposit in denominations that meet or exceed the FDIC insurance limit was $140.7 million and $119.7 million at December 31, 2017 and 2016, respectively.

Note 12 Borrowings

The following table sets forth selected information regarding repurchase agreements during 2017, 2016 and 2015:

	As of and for the years ended December 31,
	2017		2016		2015
Maximum amount of outstanding agreements at any month end during the period	$	130,463	$	154,404	$	288,591
Average amount outstanding during the period	$	88,390	$	109,246	$	197,726
Weighted average interest rate for the period		0.19%		0.14%		0.09%

As of December 31, 2017, 2016 and 2015, the Company had pledged mortgage-backed securities with a fair value of approximately $136.1 million, $99.1 million and $205.7 million, respectively, for securities sold under agreements to repurchase. Additionally, there was $5.7 million, $7.0 million and $68.1 million of excess collateral pledged for repurchase agreements at December 31, 2017, 2016 and 2015, respectively.

The vast majority of the Company’s repurchase agreements are overnight transactions with clients that mature the day after the transaction. During 2017, 2016 and 2015, the overnight agreements had a weighted average interest rate of 0.19%,  0.14% and 0.09%, respectively. At December 31, 2017, 2016 and 2015, none of the Company’s repurchase agreements were for periods longer than one day. The repurchase agreements are subject to a master netting arrangement; however, the Company has not offset any of the amounts shown in the consolidated financial statements.

As a member of the FHLB, the Bank has access to a line of credit and term financing from the FHLB with total available credit of $806.7 million at December 31, 2017. At December 31, 2017, 2016 and 2015, the Bank had  $129.1 million, $25.0 million and $25.0 million in term advances from the FHLB, respectively. All of the outstanding advances have fixed interest rates between 1.31% - 2.33%, with maturity dates of 2018 - 2020. The Bank had investment securities pledged as collateral for FHLB advances in the amount of $28.1 million, $28.8 million and $41.7 million at December 31, 2017, 2016 and 2015, respectively. Interest expense related to FHLB advances totaled $1.8 million,  $0.7 million and $0.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Note 13 Regulatory Capital 

As a bank holding company, the Company is subject to the regulatory capital adequacy requirements implemented by the Federal Reserve. The federal banking agencies have risk-based capital adequacy regulations intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations. Under these regulations, assets are assigned to one of several risk categories, and nominal dollar amounts of assets and credit equivalent amounts of off-balance-sheet items are multiplied by a risk adjustment percentage for the category.

The Basel III Capital rules, effective January 1, 2015, changed the components of regulatory capital, changed the way in which risk ratings are assigned to various categories of bank assets and defined a new Tier 1 common risk-based ratio. In addition, a capital conservative buffer requirement, designed to strengthen an institution’s financial resilience during economic cycles through the restriction of capital distributions and other payments, became effective in 2016, with full phase-in beginning January 1, 2019. When fully phased-in, the capital conservation buffer adds a 2.5% capital requirement above existing regulatory minimum ratios.

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Under the Basel III requirements, at December 31, 2017 and 2016, the Company and the Bank met all capital requirements and the Bank had regulatory capital ratios in excess of the levels established for well-capitalized institutions, as detailed in the tables below.

	December 31, 2017
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	9.8%	$	470,877	N/A		N/A	4.0%	$	191,559
NBH Bank	8.1%		382,918	5.0%	$	237,772	4.0%		190,217
Common equity tier 1 risk-based capital:
Consolidated	12.9%	$	470,877	N/A		N/A	7.0%	$	335,228
NBH Bank	10.6%		382,918	6.5%	$	309,103	7.0%		332,881
Tier 1 risk-based capital ratio:
Consolidated	12.9%	$	470,877	N/A		N/A	8.5%	$	309,400
NBH Bank	10.6%		382,918	8.0%	$	289,022	8.5%		307,086
Total risk-based capital ratio:
Consolidated	13.8%	$	502,917	N/A		N/A	10.5%	$	382,200
NBH Bank	11.5%		414,958	10.0%	$	361,277	10.5%		379,341

	December 31, 2016
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	10.4%	$	470,259	N/A		N/A	4.0%	$	181,019
NBH Bank	8.6%		389,189	4.5%	$	202,903	4.0%		180,358
Common equity tier 1 risk-based capital:
Consolidated	14.2%	$	470,259	N/A		N/A	7.0%	$	316,784
NBH Bank	11.8%		389,189	6.5%	$	293,082	7.0%		315,627
Tier 1 risk-based capital ratio:
Consolidated	14.2%	$	470,259	N/A		N/A	8.5%	$	282,578
NBH Bank	11.8%		389,189	8.0%	$	264,596	8.5%		281,133
Total risk-based capital ratio:
Consolidated	15.0%	$	499,759	N/A		N/A	10.5%	$	349,067
NBH Bank	12.7%		418,689	10.0%	$	330,745	10.5%		347,282

(1) As of the fully phased-in date of January 1, 2019, including the capital conservation buffer.

Note 14 FDIC Loss-Sharing Related

During the fourth quarter of 2015, the Bank entered into an early termination agreement with the FDIC, terminating its loss-share agreements. The Bank paid consideration of $15.1 million to the FDIC for the termination of the agreements. Additionally, the Bank recorded a pre-tax gain of $4.9 million in the fourth quarter of 2015, which was recorded in FDIC loss-sharing related income in the consolidated statements of operations. FDIC related income during 2015 was $(15.6) million, mostly driven by FDIC indemnification asset amortization. 

Note 15 Stock-based Compensation and Benefits

The Company provides stock-based compensation in accordance with shareholder-approved plans. During the second quarter of 2014, shareholders approved the 2014 Omnibus Incentive Plan (the "2014 Plan"). The 2014 Plan replaces the NBH Holdings Corp. 2009 Equity Incentive Plan (the "Prior Plan"), pursuant to which the Company granted equity awards prior to the approval of the 2014 Plan. Pursuant to the 2014 Plan, the Compensation Committee of the Board of Directors has the

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authority to grant, from time to time, awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, other stock-based awards, or any combination thereof to eligible persons.

As of December 31, 2017, the aggregate number of Class A common stock available for issuance under the 2014 Plan is 5,754,830 shares. Any shares that are subject to stock options or stock appreciation rights under the 2014 Plan will be counted against the amount available for issuance as one share for every one share granted, and any shares that are subject to awards under the 2014 Plan other than stock options or stock appreciation rights will be counted against the amount available for issuance as 3.25 shares for every one share granted. The 2014 Plan provides for recycling of shares from both the Prior Plan and the 2014 Plan, the terms of which are further described in the Company's Proxy Statement for its 2014 Annual Meeting of Shareholders. Upon an option exercise, it is the Company’s policy to issue shares from treasury stock.

To date, the Company has issued stock options, restricted stock and performance stock units under the plans. The Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of stock at the date of grant.

Stock options

The Company issued stock options during 2017, 2016 and 2015, which are primarily time-vesting with 1/3 vesting on each of the first, second and third anniversary of the date of grant or date of hire.

The expense associated with the awarded stock options was measured at fair value using a Black-Scholes option-pricing model. The outstanding option awards vest on a graded basis over 1-4 years of continuous service and have 7-10 year contractual terms.

Below are the weighted average assumptions used in the Black-Scholes option pricing model to determine fair value of the Company’s stock options granted in 2017, 2016 and 2015:

	2017		2016		2015
Weighted average fair value	$	7.84	$	4.24	$	4.37
Weighted average risk-free interest rate (1)		2.14%		1.47%		1.59%
Expected volatility (2)		21.61%		22.47%		23.87%
Expected term (years) (3)		6.09		6.09		6.01
Dividend yield (4)		0.83%		1.02%		1.05%

(1)	The risk-free rate for the expected term of the options was based on the U.S. Treasury yield curve at the date of grant and based on the expected term.
(2)	Expected volatility was calculated using a time-based weighted migration of the Company’s own stock price volatility coupled with those of a peer group of eight comparable publicly traded companies for a period commensurate with the expected term of the options.
(3)	The expected term was estimated to be the average of the contractual vesting term and time to expiration.
(4)	The dividend yield was assumed to be $0.05 per share per quarter through the third quarter of 2016, $0.07 per share per quarter through the first quarter of 2017 and $0.09 per share per quarter through the fourth quarter of 2017 in accordance with the Company’s dividend policy at the time of grant.

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The Company issued stock options in accordance with the 2014 Plan during 2017. The following table summarizes stock option activity for 2017:

				Weighted
				average
		Weighted		remaining
		average		contractual	Aggregate
		exercise		term in	intrinsic
	Options	price		years	value
Outstanding at December 31, 2016	2,185,922	$	19.81	4.85	$	7,753
Granted	100,401		33.98
Exercised	(658,371)		19.91
Forfeited	(29,634)		19.82
Outstanding at December 31, 2017	1,598,318	$	20.62	4.07	$	19,017
Options exercisable at December 31, 2017	1,372,300	$	19.82	3.35	$	17,306
Options vested and expected to vest	1,581,184	$	20.54	4.02	$	18,924

Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $0.7 million, $0.7 million and $0.7 million for 2017, 2016 and 2015, respectively. At December 31, 2017, there was $0.5 million of total unrecognized compensation cost related to non-vested stock options granted under the plans. The cost is expected to be recognized over a weighted average period of 2.0 years.

The following table summarizes the Company’s outstanding stock options:

				Options outstanding				Options exercisable
					Weighted average
				Number	remaining contractual	Weighted average		Number	Weighted average
Range of exercise price				outstanding	life (years)	exercise price		exercisable	exercise price
$	18.00	-	18.99	129,327	5.85	$	18.55	129,145	$	18.55
$	19.00	-	19.99	243,649	7.78	$	19.38	115,278	$	19.31
$	20.00	-	20.99	1,126,549	2.61	$	20.01	1,125,577	$	20.01
$	21.00 and above			98,793	9.14	$	33.42	2,300	$	23.98

Restricted stock awards

The Company issued time based restricted stock awards during 2017, 2016 and 2015. The restricted stock awards vest over a range of a 1 – 3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.

No market-based stock awards were granted during 2017. During the year ended December 31, 2016, the Company granted market-based awards of 26,594 shares in accordance with the 2014 Plan. These shares have a five-year performance period and vest upon the later of the Company’s stock price achieving an established price goal during the performance period and the third anniversary of the date of grant. The $11.28 per share fair value of these awards was determined using a Monte Carlo Simulation at grant date. The market-based performance condition had been met for these awards and the total unrecognized compensation cost related to these non-vested awards totaled $0.1 million, and is expected to be recognized over a weighted average period of approximately 1.2 years.

Performance stock units

During the year ended December 31, 2017 and 2016, the Company granted 49,758 and 91,342 performance stock units in accordance with the 2014 Plan, respectively. These performance stock units granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares to be awarded at the end of the performance period will range from 0% - 150% of the initial target awards. 60% of the award is based on the Company’s cumulative earnings per share (EPS target) during the performance period, and 40% of the award is based on the Company’s cumulative total shareholder return (TSR target), or TSR, during the performance period. On the vesting date, the Company’s TSR will

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be compared to the respective TSRs of the companies comprising the KBW Regional Index at the grant date to determine the shares awarded. The fair value of the EPS target portion of the award was determined based on the closing stock price of the Company’s common stock on the grant date. The fair value of the TSR target portion of the award was determined using a Monte Carlo Simulation at the grant date. The weighted-average grant date fair value per unit for awards granted during 2017 of the EPS target portion and the TSR target portion was $34.04 and $32.06, respectively.

The following table summarizes restricted stock and performance stock unit activity during 2017 and 2016:

		Weighted				Weighted
	Restricted	average grant-		Performance		average grant-
	stock shares	date fair value		stock units		date fair value
Unvested at December 31, 2015	836,031	$	15.42	—	$	—
Granted	122,992		19.15	91,342		18.22
Vested	(431,155)		15.78	—		—
Forfeited	(28,597)		18.95	(6,047)		18.22
Unvested at December 31, 2016	499,271		15.82	85,295		18.22
Granted	66,471		33.43	49,758		33.22
Vested	(380,956)		15.40	—		—
Forfeited	(21,229)		18.73	(9,971)		21.78
Unvested at December 31, 2017	163,557	$	22.60	125,082	$	23.90

As of December 31, 2017, the total unrecognized compensation cost related to the non-vested restricted stock awards and performance stock units totaled $1.5 million and $1.6 million, respectively, and is expected to be recognized over a weighted average period of approximately 1.8 years and 1.8 years, respectively. Expense related to non-vested restricted stock awards totaled $2.2 million, $2.4 million and $2.6 million during 2017, 2016 and 2015, respectively. Expense related to non-vested performance stock units totaled $0.8 million, $0.4 million and $0.0 million during 2017, 2016 and 2015, respectively. Expense related to non-vested restricted stock awards and units is a component of salaries and benefits in the Company’s consolidated statements of operations.

Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan (“ESPP”) is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ESPP. Under the ESPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 355,159 were available for issuance.

Under the ESPP, employees purchased 11,178 shares and 19,178 shares during 2017 and 2016, respectively.

Note 16 Warrants

During 2017 and 2016,  250,750 and 475,000 warrants were exercised in a non-cash transaction, respectively, representing the remaining outstanding warrants. The warrants were granted to certain lead investors of the Company at the time of the Company’s initial capital raise (2009-2010), all with an exercise price of $20.00 per share.  Refer to the consolidated statements of changes in shareholders’ equity for additional detail.  

During 2015, the Company modified its remaining warrant agreements resulting in the reclassification of $3.1 million to additional paid-in capital included in the consolidated statements of financial condition at December 31, 2015. Refer to the consolidated statements of changes in shareholders’ equity for additional detail.

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Note 17 Common Stock

The Company had 26,875,585 and 26,386,583 shares of Class A common stock outstanding at December 31, 2017 and 2016, respectively. Additionally, the Company had 163,557 and 499,271 shares outstanding at December 31, 2017 and 2016, respectively, of restricted Class A common stock issued but not yet vested under the 2014 Omnibus Incentive Plan and the Prior Plan that are not included in shares outstanding until such time that they are vested; however, these shares do have voting and certain dividend rights during the vesting period.

On August 5, 2016, the Board of Directors authorized a share repurchase program for up to $50.0 million from time to time in either the open market or through privately negotiated transactions. The remaining authorization under this program at December 31, 2017 was $12.6 million.

Note 18 Income Per Share

The Company calculates income per share under the two-class method, as certain non-vested share awards contain non-forfeitable rights to dividends. As such, these awards are considered securities that participate in the earnings of the Company. Non-vested shares are discussed further in note 15.

The Company had 26,875,585 and 26,386,583 shares of Class A commons stock outstanding as of December 31, 2017 and 2016, respectively, exclusive of issued non-vested restricted shares. Certain stock options and non-vested restricted shares are potentially dilutive securities, but are not included in the calculation of diluted income per share because to do so would have been anti-dilutive for 2017, 2016 and 2015.

The following table illustrates the computation of basic and diluted income per share for 2017, 2016 and 2015:

	For the years ended December 31,
	2017		2016		2015
Net income	$	14,579	$	23,060	$	4,881
Less: income allocated to participating securities		(56)		(52)		(53)
Income allocated to common shareholders	$	14,523	$	23,008	$	4,828
Weighted average shares outstanding for basic income per common share		26,928,763		28,313,061		34,349,996
Dilutive effect of equity awards		772,392		704,831		9,321
Dilutive effect of warrants		8,504		73,451		4,170
Weighted average shares outstanding for diluted income per common share		27,709,659		29,091,343		34,363,487
Basic income per share	$	0.54	$	0.81	$	0.14
Diluted income per share	$	0.53	$	0.79	$	0.14

The Company had 1,598,318,  2,185,922 and 2,596,251 outstanding stock options to purchase common stock at weighted average exercise prices of $20.62,  $19.81 and $19.84 per share at December 31, 2017, 2016 and 2015, respectively, which have time-vesting criteria, and as such, any dilution is derived only for the time frame in which the vesting criteria had been met and where the inclusion of those stock options is dilutive. Additionally, 250,750 warrants were exercised in a non-cash transaction during 2017, representing the remaining outstanding warrants to purchase shares of the Company’s common stock. The warrants had an exercise price of $20.00. The Company had 288,639,  499,271 and 836,031 unvested restricted shares and units issued as of December 31, 2017, 2016 and 2015, respectively, which have performance, market and/or time-vesting criteria, and as such, any dilution is derived only for the time frame in which the vesting criteria had been met and where the inclusion of those restricted shares and units is dilutive.

Note 19 Income Taxes

Income tax expense attributable to income before taxes was $21.3 million, $2.9 million and $3.0 million for 2017, 2016 and 2015, respectively. During the fourth quarter of 2017, the Company re-measured its deferred tax asset as a result of the enactment of “H.R.1”, known as the “Tax Cuts and Jobs Act”, which among other items reduces the federal corporate tax rate to 21% effective January 1, 2018. Income tax expense recorded in 2017 included an $18.5 million non-cash one-time charge

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primarily related to this re-measurement. The re-measurement was based on reasonable estimates using information that was known and available from the Tax Cuts and Jobs Act as it related to our temporary differences. As additional details and technical corrections arise related to the Tax Cuts and Jobs Act, the re-measurement estimates may be subject to future adjustment.

(a) Income taxes

Total income taxes for 2017, 2016 and 2015 were allocated as follows:

	For the years ended December 31,
	2017		2016		2015
Current expense:
U.S. federal	$	1,230	$	1,868	$	3,536
State and local		169		117		311
Total current income tax expense		1,399		1,985		3,847
Deferred expense (benefit):
U.S. federal		17,639		626		(710)
State and local		2,245		336		(93)
Total deferred income tax expense (benefit)		19,884		962		(803)
Income tax expense	$	21,283	$	2,947	$	3,044

(b) Tax Rate Reconciliation

The reconciliation between the income tax expenses and the amounts computed by applying the U.S. federal income tax rate to pretax income is as follows:

	For the years ended December 31,
	2017		2016		2015
Income tax at federal statutory rate (35%)	$	12,550	$	9,103	$	2,774
State income taxes, net of federal benefits		265		295		142
Tax-exempt loan interest income		(5,380)		(3,798)		(2,568)
Bank-owned life insurance income		(813)		(724)		(576)
Stock-based compensation		(3,998)		(2,002)		3,520
Federal and state deferred tax rate change		18,457		—		—
Warrant valuation		—		—		37
Bargain purchase gain		—		—		(367)
Other		202		73		82
Income tax expense	$	21,283	$	2,947	$	3,044

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(c) Significant Components of Deferred Taxes

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below:

	December 31, 2017		December 31, 2016
Deferred tax assets:
Excess tax basis of acquired loans over carrying value	$	1,887	$	5,865
Allowance for loan losses		7,354		11,063
Intangible assets		6,367		12,279
Other real estate owned		228		—
Accrued stock-based compensation		3,098		7,429
Accrued compensation		2,431		3,296
Capitalized start-up costs		2,488		4,554
Accrued expenses		1,227		2,218
Net deferred loan fees		622		1,198
Net operating loss		1,027		2,177
Federal tax credits		5,891		1,888
Net unrealized losses on investment securities		2,307		1,082
Other		993		1,526
Total deferred tax assets		35,920		54,575
Deferred tax liabilities:
Premises and equipment		(113)		(937)
Other real estate owned		—		(426)
Prepaid expenses		(177)		(402)
Total deferred tax liabilities		(290)		(1,765)
Net deferred tax asset	$	35,630	$	52,810

At December 31, 2017, the Company has federal and state net operating loss carryovers (NOLs) of $4.0 million and $8.9 million, respectively, which are available to offset future taxable income. The federal NOLs expire in varying amounts through 2037, and the state NOLs expire in varying amounts between 2026 and 2037. The Company also has a minimum tax credit carryover of $5.9 million that under the recently enacted tax law, the minimum tax credit is available to reduce income tax obligations in future periods without limitation and eventually becomes refundable regardless of the Company’s tax liability. The minimum tax credit is available to reduce income tax obligations in future periods to the extent they exceed the calculated alternative minimum tax. The Company does not expect any tax attribute carryovers to expire before they are utilized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, if any (including the impact of available carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. For the years ended December 31, 2017 and 2016, management believes a valuation allowance on the deferred tax asset is not necessary based on the current and future projected earnings of the Company. The Company has no ASC 740-10 unrecognized tax benefits recorded as of December 31, 2017 and 2016 and does not expect the total amount of unrecognized tax benefits to significantly increase within the next 12 months. The Company and its subsidiary bank are subject to income tax by federal, state and local government taxing authorities. The Company’s tax returns for the years ended December 31, 2014 through 2017 remain subject to examination for U.S. federal income tax authorities. The years open to examination by state and local government authorities vary by jurisdiction.

The Company has unvested stock-based compensation awards outstanding at December 31, 2017, including stock options, restricted stock and performance stock units. The strike prices for options range from $18.09 to $34.16, with a large portion of the awards having strike prices of $20.00. The restricted stock vest over a range of 1-3 year period. The performance stock units cliff vest over a range of 2-3 years and the number of shares issued is determined by the final performance results.

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Depending on the movement in our stock price, these stock-based compensation awards may create either an excess tax benefit or tax deficiency depending on the relationship between the fair value at the time of vesting or exercise and the estimated fair value recorded at the time of grant. During 2017 and 2016, the Company recorded $4.2 million and $2.1 million, respectively, of excess tax benefit related to the settlement of awards during the period as a component of income tax expense in the consolidated statements of operations. During 2015, the Company recorded a tax deficiency of $3.7 million in income tax expense resulting from expired or exercised awards. As of December 31, 2017, the Company had a $3.1 million deferred tax asset related to stock-based compensation, $2.3 million of which is associated with executive officers still employed by the Company.

Note 20 Derivatives

Risk management objective of using derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company has established policies that neither carrying value nor fair value at risk should exceed established guidelines. The Company has designed strategies to confine these risks within the established limits and identify appropriate trade-offs in the financial structure of its balance sheet. These strategies include the use of derivative financial instruments to help achieve the desired balance sheet repricing structure while meeting the desired objectives of its clients. Currently the Company employs certain interest rate swaps that are designated as fair value hedges as well as economic hedges. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

Fair values of derivative instruments on the balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of financial condition as of December 31, 2017 and 2016.

Information about the valuation methods used to measure fair value is provided in note 22.

		Asset derivatives fair value					Liability derivatives fair value
	Balance Sheet	December 31,		December 31,		Balance Sheet	December 31,		December 31,
	location	2017		2016		location	2017		2016
Derivatives designated as hedging instruments:
Interest rate products	Other assets	$	10,489	$	9,528	Other liabilities	$	1,167	$	1,381
Total derivatives designated as hedging instruments		$	10,489	$	9,528		$	1,167	$	1,381
Derivatives not designated as hedging instruments:
Interest rate products	Other assets	$	2,483	$	1,900	Other liabilities	$	2,584	$	1,898
Interest rate lock commitments	Other assets		128		149	Other liabilities		—		6
Forward contracts	Other assets		5		138	Other liabilities		7		20
Total derivatives not designated as hedging instruments		$	2,616	$	2,187		$	2,591	$	1,924

Fair value hedges

Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of December 31, 2017, the Company had 61 interest rate swaps with a notional amount of $417.7 million that were designated as fair value hedges of interest rate risk associated with the Company’s fixed-rate loans. The Company had 42 outstanding interest rate swaps with a notional amount of $313.0 million that were designated as fair value hedges as of December 31, 2016.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. The Company includes the gain or loss

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on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. During 2017, the Company recognized a net loss of $995 thousand in non-interest income related to hedge ineffectiveness. During 2016, the Company recognized a net gain of $293 thousand in non-interest income related to hedge ineffectiveness.

Non-designated hedges

Derivatives not designated as hedges are not speculative and consist of interest rate swaps with commercial banking clients that facilitate their respective risk management strategies. Interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client swaps and the offsetting swaps are recognized directly in earnings. As of December 31, 2017, the Company had 44 matched interest rate swap transactions with an aggregate notional amount of $202.2 million related to this program. As of December 31, 2016, the Company had 36 matched interest rate swap transactions with an aggregate notional amount of $132.6 million related to this program. 

As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Company then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs ("best efforts") or commits to deliver the locked loan in a binding ("mandatory") delivery program with an investor. Fair value changes of certain loans under interest rate lock commitments are hedged with forward sales contracts of MBS. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in non-interest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded.

Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Company does not expect any counterparty to any MBS contract to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Company fails to deliver the loans subject to interest rate risk lock commitments, it will still be obligated to “pair off” MBS to the counterparty. Should this be required, the Company could incur significant costs in acquiring replacement loans and such costs could have an adverse effect on the consolidated financial statements.

The fair value of the mortgage banking derivative is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.

The Company had 31 interest rate lock commitments with a notional value of $8.0 million and six forward contracts with a notional value of $9.0 million at December 31, 2017. The Company had 78 interest rate lock commitments with a notional value of $13.8 million and 11 forward contracts with a notional value of $11.8 million at December 31, 2016.

Effect of derivative instruments on the consolidated statements of operations

The tables below present the effect of the Company’s derivative financial instruments in the consolidated statements of operations for 2017 and 2016:

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives in fair value	recognized in income on	For the years ended December 31,
hedging relationships	derivatives	2017		2016
Interest rate products	Other non-interest income	$	1,177	$	8,183
Total		$	1,177	$	8,183

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	Location of gain (loss)	Amount of gain or (loss) recognized in income on hedged items
	recognized in income on	For the years ended December 31,
Hedged items	hedged items	2017		2016
Interest rate products	Other non-interest income	$	(2,172)	$	(7,890)
Total		$	(2,172)	$	(7,890)

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives not designated	recognized in income on	For the years ended December 31,
as hedging instruments	derivatives	2017		2016
Interest rate products	Other non-interest expense	$	104	$	129
Interest rate lock commitments	Gain on sale of mortgages, net		(13)		142
Forward contracts	Gain on sale of mortgages, net		(120)		118
Total		$	(29)	$	389

Credit-risk-related contingent features

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness for reasons other than an error or omission of an administrative or operational nature, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty has the right to terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of December 31, 2017, the termination value of derivatives in a net liability position related to these agreements was $0.5 million, which includes accrued interest but excludes any adjustment for nonperformance risk. The Company has minimum collateral posting thresholds with certain of its derivative counterparties and as of December 31, 2017, the Company had posted $0.5 million in eligible collateral. If the Company had breached any of these provisions at December 31, 2017, it could have been required to settle its obligations under the agreements at the termination value.

Note 21 Commitments and Contingencies

In the normal course of business, the Company enters into various off-balance sheet commitments to help meet the financing needs of clients. These financial instruments include commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. The same credit policies are applied to these commitments as the loans on the consolidated statements of financial condition; however, these commitments involve varying degrees of credit risk in excess of the amount recognized in the consolidated statements of financial condition. At December 31, 2017 and 2016, the Company had loan commitments totaling $680.8 million and $602.2 million, respectively, and standby letters of credit that totaled $7.2 million and $13.5 million, respectively. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon. However, the contractual amount of these commitments, offset by any additional collateral pledged, represents the Company’s potential credit loss exposure.

Total unfunded commitments at December 31, 2017 and 2016 were as follows:

	December 31, 2017		December 31, 2016
Commitments to fund loans	$	181,904	$	149,391
Unfunded commitments under lines of credit		498,857		452,851
Commercial and standby letters of credit		7,185		13,532
Total unfunded commitments	$	687,946	$	615,774

Commitments to fund loans—Commitments to fund loans are legally binding agreements to lend to clients in accordance with predetermined contractual provisions providing there have been no violations of any conditions specified in the contract. These commitments are generally at variable interest rates and are for specific periods or contain termination clauses and may require the payment of a fee. The total amounts of unused commitments are not necessarily representative of future credit exposure or cash requirements, as commitments often expire without being drawn upon.

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Unfunded commitments under lines of credit—In the ordinary course of business, the Company extends revolving credit to its clients. These arrangements may require the payment of a fee.

Commercial and standby letters of credit—As a provider of financial services, the Company routinely issues commercial and standby letters of credit, which may be financial standby letters of credit or performance standby letters of credit. These are various forms of “back-up” commitments to guarantee the performance of a client to a third party. While these arrangements represent a potential cash outlay for the Company, the majority of these letters of credit will expire without being drawn upon. Letters of credit are subject to the same underwriting and credit approval process as traditional loans, and as such, many of them have various forms of collateral securing the commitment, which may include real estate, personal property, receivables or marketable securities.

Contingencies

In the ordinary course of business, the Company and the Bank may be subject to litigation. Based upon the available information and advice from the Company’s legal counsel, management does not believe that any potential, threatened or pending litigation to which it is a party will have a material adverse effect on the Company’s liquidity, financial condition or results of operations.

Note 22 Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For disclosure purposes, the Company groups its financial and non-financial assets and liabilities into three different levels based on the nature of the instrument and the availability and reliability of the information that is used to determine fair value. The three levels are defined as follows:

· Level 1—Includes assets or liabilities in which the inputs to the valuation methodologies are based on unadjusted quoted prices in active markets for identical assets or liabilities.

· Level 2—Includes assets or liabilities in which the inputs to the valuation methodologies are based on similar assets or liabilities in inactive markets, quoted prices for identical or similar assets or liabilities in inactive markets, and inputs other than quoted prices that are observable, such as interest rates, yield curves, volatilities, prepayment speeds, and other inputs obtained from observable market input.

· Level 3—Includes assets or liabilities in which the inputs to the valuation methodology are based on at least one significant assumption that is not observable in the marketplace. These valuations may rely on management’s judgment and may include internally-developed model-based valuation techniques.

Level 1 inputs are considered to be the most transparent and reliable and level 3 inputs are considered to be the least transparent and reliable. The Company assumes the use of the principal market to conduct a transaction of each particular asset or liability being measured and then considers the assumptions that market participants would use when pricing the asset or liability. Whenever possible, the Company first looks for quoted prices for identical assets or liabilities in active markets (level 1 inputs) to value each asset or liability. However, when inputs from identical assets or liabilities on active markets are not available, the Company utilizes market observable data for similar assets and liabilities. The Company maximizes the use of observable inputs and limits the use of unobservable inputs to occasions when observable inputs are not available. The need to use unobservable inputs generally results from the lack of market liquidity of the actual financial instrument or of the underlying collateral. Although, in some instances, third party price indications may be available, limited trading activity can challenge the observability of these quotations.

Changes in the valuation inputs used for measuring the fair value of financial instruments may occur due to changes in current market conditions or other factors. Such changes may necessitate a transfer of the financial instruments to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting

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period that the transfer occurs. During 2017 and 2016, there were no transfers of financial instruments between the hierarchy levels.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of each instrument under the valuation hierarchy:

Fair Value of Financial Instruments Measured on a Recurring Basis

Investment securities available-for-sale—Investment securities available-for-sale are carried at fair value on a recurring basis. To the extent possible, observable quoted prices in an active market are used to determine fair value and, as such, these securities are classified as level 1. At December 31, 2017 and 2016, the Company did not hold any level 1 securities. When quoted market prices in active markets for identical assets or liabilities are not available, quoted prices of securities with similar characteristics, discounted cash flows or other pricing characteristics are used to estimate fair values and the securities are then classified as level 2.

Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The Company estimates fair value based on quoted market prices for similar loans in the secondary market and is classified as level 2.

Interest rate swap derivatives—The Company's derivative instruments are limited to interest rate swaps that may be accounted for as fair value hedges or non-designated hedges. The fair values of the swaps incorporate credit valuation adjustments in order to appropriately reflect nonperformance risk in the fair value measurements. The credit valuation adjustment is the dollar amount of the fair value adjustment related to credit risk and utilizes a probability weighted calculation to quantify the potential loss over the life of the trade. The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying the respective counterparties’ credit spreads to the exposure offset by marketable collateral posted, if any. Certain derivative transactions are executed with counterparties who are large financial institutions ("dealers"). International Swaps and Derivative Association Master Agreements ("ISDA") and Credit Support Annexes ("CSA") are employed for all contracts with dealers. These contracts contain bilateral collateral arrangements. The fair value inputs of these financial instruments are determined using discounted cash flow analysis through the use of third-party models whose significant inputs are readily observable market parameters, primarily yield curves, with appropriate adjustments for liquidity and credit risk, and are classified as level 2.

Mortgage banking derivatives—The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.

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The tables below present the financial instruments measured at fair value on a recurring basis as of December 31, 2017 and 2016, on the consolidated statements of financial condition utilizing the hierarchy structure described above:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	168,648	$	—	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		685,230		—		685,230
Municipal securities		—		829		—		829
Loans held for sale		—		4,629		—		4,629
Interest rate swap derivatives		—		12,972		—		12,972
Mortgage banking derivatives		—		—		133		133
Total assets at fair value	$	—	$	872,308	$	133	$	872,441
Liabilities:
Interest rate swap derivatives	$	—	$	3,751	$	—	$	3,751
Mortgage banking derivatives		—		—		7		7
Total liabilities at fair value	$	—	$	3,751	$	7	$	3,758

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	227,160	$	—	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		652,739		—		652,739
Municipal securities		—		3,648		—		3,648
Loans held for sale		—		24,187		—		24,187
Interest rate swap derivatives		—		11,428		—		11,428
Mortgage banking derivatives		—		—		287		287
Total assets at fair value	$	—	$	919,162	$	287	$	919,449
Liabilities:
Interest rate swap derivatives	$	—	$	3,279	$	—	$	3,279
Mortgage banking derivatives		—		—		26		26
Total liabilities at fair value	$	—	$	3,279	$	26	$	3,305

The table below details the changes in level 3 financial instruments during 2017:

		Mortgage banking
		derivatives, net
Balance at December 31, 2016	$	261
Loss included in earnings, net		(135)
Net change in Level 3		(135)
Balance at December 31, 2017	$	126

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Fair Value of Financial Instruments Measured on a Non-recurring Basis

Certain assets may be recorded at fair value on a non-recurring basis as conditions warrant. These non-recurring fair value measurements typically result from the application of lower of cost or fair value accounting or a write-down occurring during the period.

The Company records collateral dependent loans that are considered to be impaired at their estimated fair value. A loan is considered impaired when it is probable that the Company will be unable to collect all contractual amounts due in accordance with the terms of the loan agreement. Collateral dependent impaired loans are measured based on the fair value of the collateral. The Company relies on third-party appraisals and internal assessments, utilizing a discount rate in the range of 0% - 25%, in determining the estimated fair values of these loans. The inputs used to determine the fair values of loans are considered level 3 inputs in the fair value hierarchy. At December 31, 2017, the Company measured seven loans not accounted for under ASC 310-30 at fair value on a non-recurring basis with a carrying balance of $7.1 million and specific reserve balance of $1.5 million. At December 31, 2016, the Company measured three loans not accounted for under ASC 310-30 at fair value on a non-recurring basis with a carrying balance of $10.5 million and  a specific reserve balance of $2.4 million.

OREO is recorded at the lower of the cost basis or the fair value of the collateral less estimated selling costs. The estimated fair values of OREO are updated periodically and further write-downs may be taken to reflect a new basis. The Company recognized $0.8 million and $0.3 million of OREO impairments in its consolidated statements of operations during 2017 and 2016, respectively. The fair values of OREO are derived from third party price opinions or appraisals that generally use an income approach or a market value approach. If reasonable comparable appraisals are not available, then the Company may use internally developed models to determine fair values. The inputs used to determine the fair values of OREO are considered level 3 inputs in the fair value hierarchy.

The Company may be required to record fair value adjustments on other available-for-sale and municipal securities valued at par on a non-recurring basis.

The tables below provide information regarding the assets recorded at fair value on a non-recurring basis at December 31, 2017 and 2016:  

	December 31, 2017
	Total		Losses from fair value changes
Other real estate owned	$	10,491	$	766
Impaired loans		30,873		11,099

	December 31, 2016
	Total		Losses from fair value changes
Other real estate owned	$	15,662	$	154
Impaired loans		38,282		15,200

The Company did not record any liabilities measured at fair value on a non-recurring basis during 2017 and 2016.

Note 23 Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is determined based upon quoted market prices to the extent possible; however, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques that may be significantly impacted by the assumptions used, including the discount rate and estimates of future cash flows. Changes in any of these assumptions could significantly affect the fair value estimates. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements.

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The fair value of financial instruments at December 31, 2017 and 2016, including methods and assumptions utilized for determining fair value of financial instruments, are set forth below:

	Level in fair value	December 31, 2017				December 31, 2016
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	257,364	$	257,364	$	152,736	$	152,736
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		168,648		168,648		227,160		227,160
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		685,230		685,230		652,739		652,739
Municipal securities	Level 2		829		829		3,648		3,648
Municipal securities	Level 3		219		219		265		265
Other available-for-sale securities	Level 3		419		419		419		419
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		204,352		204,048		263,411		264,862
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		54,378		52,723		69,094		67,711
Non-marketable securities	Level 2		15,030		15,030		14,949		14,949
Loans receivable	Level 3		3,178,947		3,167,508		2,860,921		2,879,860
Loans held for sale	Level 2		4,629		4,629		24,187		24,187
Accrued interest receivable	Level 2		14,255		14,255		12,562		12,562
Interest rate swap derivatives	Level 2		12,972		12,972		11,428		11,428
Mortgage banking derivatives	Level 3		133		133		287		287
LIABILITIES
Deposit transaction accounts	Level 2		2,861,509		2,861,509		2,696,603		2,696,603
Time deposits	Level 2		1,118,050		1,118,050		1,172,046		1,172,046
Securities sold under agreements to repurchase	Level 2		130,463		130,463		92,011		92,011
Federal Home Loan Bank advances	Level 2		129,115		130,300		38,665		39,324
Accrued interest payable	Level 2		5,776		5,776		4,973		4,973
Interest rate swap derivatives	Level 2		3,751		3,751		3,279		3,279
Mortgage banking derivatives	Level 3		7		7		187		187

Cash and cash equivalents

Cash and cash equivalents have a short-term nature and the estimated fair value is equal to the carrying value.

Investment securities

The estimated fair value of investment securities is based on quoted market prices or bid quotations received from securities dealers. Other investment securities, including securities that are held for regulatory purposes are carried at cost, less any other than temporary impairment.

Loans receivable

The estimated fair value of the loan portfolio is estimated using a discounted cash flow analysis using a discount rate based on interest rates offered at the respective measurement dates for loans with similar terms to borrowers of similar credit quality. The allowance for loan losses is considered a reasonable estimate of any required adjustment to fair value to reflect

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the impact of credit risk. The estimates of fair value do not incorporate the exit-price concept prescribed by ASC Topic 820, Fair Value Measurements and Disclosures.

Loans held-for-sale

Loans held-for-sale are carried at an estimated fair value. The portfolio consists primarily of fixed rate residential mortgage loans that are sold within 45 days. The estimated fair value is based on quoted market prices for similar loans in the secondary market and is classified as level 2.

Accrued interest receivable

Accrued interest receivable is of a short-term nature and the estimated fair value is equal to the carrying value.

Deposits

The estimated fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings, NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of interest-bearing time deposits is based on the discounted value of contractual cash flows of such deposits, taking into account the option for early withdrawal. The discount rate is estimated using the rates offered by the Company, at the respective measurement dates, for deposits of similar remaining maturities. The fair value of time deposits has a floor equal to the carrying value as the amount payable on demand would approximate the carrying value.

Derivative assets and liabilities

Fair values for derivative assets and liabilities are fully described in note 20 of the consolidated financial statements.

Securities sold under agreements to repurchase

The vast majority of the Company’s repurchase agreements are overnight transactions that mature the day after the transaction, and as a result of this short-term nature, the estimated fair value is equal to the carrying value.

Accrued interest payable

Accrued interest payable is of a short-term nature and the estimated fair value is equal to the carrying value.

Note 24 Subsequent Events

On January 1, 2018, the Company completed its acquisition of Peoples, Inc., the bank holding company of Colorado-based Peoples National Bank and Kansas-based Peoples Bank. Immediately following the completion of the acquisition, Peoples National Bank and Peoples Bank merged into NBH Bank. Pursuant to the merger agreement executed in June 2017, the Company paid $36.2 million of cash consideration and 3,398,477 shares of the Company’s Class A common stock in exchange for all of the outstanding common stock of Peoples. Cash paid included $10.0 million placed in escrow for certain potential liabilities the Company is indemnified for pursuant to the merger agreement. The cash paid is included in cash and due from banks in the Company’s consolidated statements of financial condition at December 31, 2017. The transaction has a value of $146.4 million in the aggregate, based on the Company’s closing price of $32.43 on the acquisition date. Acquisition related costs of $2.7 million were included in the Company’s consolidated statements of operations for the year ended December 31, 2017.

The Company determined that this acquisition constitutes a business combination as defined in ASC Topic 805, Business Combinations. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired and liabilities assumed at fair value. The Company determined fair values in accordance with the guidance provided in ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is established by discounting the expected future cash flows with a market discount rate for like maturities and risk instruments. The estimation of expected future cash flows, market conditions and other future events and actual results could differ materially. The determination of the fair values of fixed assets, loans,

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OREO, core deposit intangible, mortgage servicing rights and mortgage repurchase reserve involves a high degree of judgment and complexity. The Company has made the determination of provisional fair values using the best information available at the time; however, purchase accounting is not complete and the assumptions used are subject to change and, if changed, could have a material effect on the Company's financial position and results of operations.

The table below summarizes the provisional net assets acquired (at fair value) and consideration transferred in connection with the Peoples acquisition:

Assets:
Cash and due from banks	$	105,173
Investment securities available-for-sale		118,553
Non-marketable securities		4,846
Loans		544,233
Loans held for sale		54,260
Other real estate owned		1,436
Premises and equipment		17,931
Core deposit intangible asset		9,839
Mortgage servicing rights		4,233
Other assets		15,740
Total assets acquired	$	876,244
Liabilities:
Total deposits		729,911
Other liabilities		55,973
Total liabilities assumed	$	785,884
Identifiable net assets acquired	$	90,360
Consideration:
NBHC common stock paid at January 1, 2018, closing price of $32.43	$	110,213
Cash		36,189
Total	$	146,402
Estimated goodwill created	$	56,042

In connection with the Peoples acquisition, the Company estimates it will record $56.0 million of goodwill, a $9.8 million core deposit intangible asset, a $4.2 million mortgage servicing rights intangible asset and a $3.8 million mortgage repurchase reserve, included in other liabilities. The core deposit intangible will be amortized straight-line over ten years and the mortgage servicing rights intangible is amortized in proportion to and over the period of the estimated net servicing income. 

The following unaudited pro forma information combines the historical results of Peoples and the Company. The unaudited pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors. The unaudited pro forma information below reflects adjustments made to exclude acquisition-related expenses of the Company and Peoples of $13.1 million during the year ended 2017, estimated amortization and accretion of purchase discounts and premiums of $0.9 million and $0.9 million and estimated amortization of acquired identifiable intangibles of $1.1 million and $1.1 million during the years ended December 31, 2017 and 2016, respectively. The unaudited pro forma information is theoretical in nature and not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations which would have resulted had the Company acquired Peoples during the periods presented.

If the Peoples acquisition had been completed on January 1, 2016, unaudited pro forma total revenue for the Company would have been approximately $263.0 million and $268.1 million for the years ended December 31, 2017 and 2016, respectively.

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Unaudited pro forma net income for the Company would have been approximately $22.6 million and $34.7 million, respectively, for the same periods. Unaudited pro forma basic and dilutive earnings per share for the Company would have been $0.75 and $0.73 for the year ended December 31, 2017, respectively, and $1.09 and $1.07 for the year ended December 31, 2016, respectively.

Note 25 Parent Company Only Financial Statements

Parent company only financial information for National Bank Holdings Corporation is summarized as follows:

Condensed Statements of Financial Condition

	December 31, 2017		December 31, 2016
ASSETS
Cash and cash equivalents	$	73,873	$	64,691
Investment in subsidiaries		444,445		455,120
Other assets		14,414		16,996
Total assets	$	532,732	$	536,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other liabilities	$	325	$	618
Total liabilities		325		618
Shareholders’ equity		532,407		536,189
Total liabilities and shareholders’ equity	$	532,732	$	536,807

Condensed Statements of Operations

	For the years ended December 31,
	2017		2016		2015
Income
Interest income	$	45	$	24	$	—
Undistributed equity from subsidiaries		(11,192)		(129,956)		(74,131)
Distributions from subsidiaries		28,903		155,353		86,000
Other income		—		—		1,048
Total income		17,756		25,421		12,917
Expenses
Salaries and benefits		3,680		3,529		3,349
Other expenses		3,587		3,578		3,597
Total expenses		7,267		7,107		6,946
Income before income taxes		10,489		18,314		5,971
Income tax (benefit) expense		(4,090)		(4,746)		1,090
Net income	$	14,579	$	23,060	$	4,881

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Condensed Statements of Cash Flows

	For the years ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	14,579	$	23,060	$	4,881
Undistributed equity from subsidiaries		11,192		(25,388)		(11,869)
Stock-based compensation expense		3,648		3,492		3,349
Net excess tax (benefit) deficit on stock-based compensation		(4,225)		(2,078)		3,677
Other		6,680		418		(1,042)
Net cash provided by (used in) operating activities		31,874		(496)		(1,004)
Cash flows from investing activities:
Outlay for business combinations		—		—		(9,482)
Dividend payment from subsidiary equity		—		15,353		—
Return of capital from investments in subsidiaries		—		140,000		86,000
Net cash provided by investing activities		—		155,353		76,518
Cash flows from financing activities:
Capital contribution		(5,000)		—		—
Issuance of stock under purchase and equity compensation plans		(8,395)		(6,201)		(952)
Proceeds from exercise of stock options		104		—		160
Settlement of warrants		—		—		(368)
Payment of dividends		(9,401)		(6,131)		(6,711)
Repurchase of shares		—		(93,573)		(175,048)
Net cash used in financing activities		(22,692)		(105,905)		(182,919)
Net increase (decrease) in cash and cash equivalents		9,182		48,952		(107,405)
Cash and cash equivalents at beginning of the year		64,691		15,739		123,144
Cash and cash equivalents at end of the year	$	73,873	$	64,691	$	15,739

Note 26 Quarterly Results of Operations (unaudited)

The following is a summary of quarterly results:

	December 31, 2017
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	41,889	$	42,579	$	41,213	$	38,740	$	164,421
Interest expense		4,976		4,681		4,440		4,018		18,115
Net interest income before provision for loan losses		36,913		37,898		36,773		34,722		146,306
Provision for loan losses		3,272		3,880		4,025		1,795		12,972
Net interest income after provision for loan losses		33,641		34,018		32,748		32,927		133,334
Non-interest income		8,883		9,551		12,075		8,696		39,205
Non-interest expense		34,028		34,605		33,439		34,605		136,677
Income before income taxes		8,496		8,964		11,384		7,018		35,862
Income tax expense (benefit)		18,615		1,733		2,175		(1,240)		21,283
Net (loss) income	$	(10,119)	$	7,231	$	9,209	$	8,258	$	14,579
(Loss) income per share-basic	$	(0.37)	$	0.27	$	0.34	$	0.31	$	0.54
(Loss) income per share-diluted	$	(0.37)	$	0.26	$	0.33	$	0.30	$	0.53

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	December 31, 2016
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	39,658	$	40,764	$	38,472	$	41,554	$	160,448
Interest expense		3,873		3,700		3,719		3,516		14,808
Net interest income before provision for loan losses		35,785		37,064		34,753		38,038		145,640
Provision for loan losses		1,282		5,293		6,457		10,619		23,651
Net interest income after provision for loan losses		34,503		31,771		28,296		27,419		121,989
Non-interest income		9,992		11,608		10,504		7,923		40,027
Non-interest expense		34,423		33,370		33,314		34,902		136,009
Income before income taxes		10,072		10,009		5,486		440		26,007
Income tax expense		81		1,695		982		189		2,947
Net income	$	9,991	$	8,314	$	4,504	$	251	$	23,060
Income per share-basic	$	0.38	$	0.30	$	0.15	$	0.01	$	0.81
Income per share-diluted	$	0.36	$	0.30	$	0.15	$	0.01	$	0.79

	December 31, 2015
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	43,492	$	42,311	$	42,517	$	43,087	$	171,407
Interest expense		3,563		3,629		3,662		3,608		14,462
Net interest income before provision for loan losses		39,929		38,682		38,855		39,479		156,945
Provision for loan losses		5,423		3,710		1,858		1,453		12,444
Net interest income after provision for loan losses		34,506		34,972		36,997		38,026		144,501
Non-interest income		15,419		3,761		2,747		(479)		21,448
Non-interest expense		42,230		38,677		40,393		36,724		158,024
Income (loss) before income taxes		7,695		56		(649)		823		7,925
Income tax expense (benefit)		4,355		(1,580)		692		(423)		3,044
Net income (loss)	$	3,340	$	1,636	$	(1,341)	$	1,246	$	4,881
Income (loss) per share-basic	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14
Income (loss) per share-diluted	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14

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Item 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

There were no changes in or disagreements with accountants on accounting and financial disclosures.

Item 9A.   CONTROLS AND PROCEDURES.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as of December 31, 2017. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2017.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2017. KPMG LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued a report on our internal control over financial reporting as of December 31, 2017, which report is included in this Item 9A below.

Changes in Internal Control Over Financial Reporting

There were no changes made in the Company's internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Report of Independent Registered Public Accounting Firm  

To the Shareholders and Board of Directors
National Bank Holdings Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited National Bank Holdings Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial condition of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Kansas City, Missouri

February 27, 2018

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Item 9B.     OTHER INFORMATION

None.

PART III

Item 10.       DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The Information required by this Item is incorporated herein by reference to our Proxy Statement (Schedule 14A) for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

The Company's Supplemental Code of Ethics for CEO and Senior Financial Officers, which applies to the CEO, Chief Financial Officer and Principal Accounting Officer, is available at www.nationalbankholdings.com. Amendments to, and waivers of, the code of ethics are publicly disclosed as required by applicable law, regulation or rule.

Item 11.       EXECUTIVE COMPENSATION.

The Information required by this Item is incorporated herein by reference to our Proxy Statement (Schedule 14A) for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

The Information required by this Item is incorporated herein by reference to our Proxy Statement (Schedule 14A) for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The Information required by this Item is incorporated herein by reference to our Proxy Statement (Schedule 14A) for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 14.       PRINCIPAL ACCOUNTING FEES AND SERVICES.

The Information required by this Item is incorporated herein by reference to our Proxy Statement (Schedule 14A) for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

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PART IV

Item 15.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as a part of this report:

(1)  Financial Statements:

	Page
Consolidated Statements of Financial Condition	74
Consolidated Statements of Operations	75
Consolidated Statements of Comprehensive Income (Loss)	76
Consolidated Statements of Changes in Shareholders’ Equity	77
Consolidated Statements of Cash Flows	78
Notes to Consolidated Financial Statements	79

(2)  Financial Statement Schedules:

All schedules are omitted as such information is inapplicable or is included in the financial statements.

(b) The exhibits filed as part of this report and exhibits incorporated herein by reference to other documents are listed below:

Exhibit No	Description
2.1*	Agreement and Plan Merger, dated as of June 23, 2017, by and among Peoples, Inc., National Bank Holdings Corporation, the Significant Stockholders (as defined herein) and Winton A. Winter, Jr., solely in his capacity as the Holders’ Representative (incorporated herein by reference to Exhibit 2.1 to our Form 8-K dated June 23, 2017 and filed on June 27, 2017)
3.1	Second Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our Form S-1 Registration Statement (Registration No. 333-177971), filed on August 22, 2012)
3.2	Second Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.2 to our Form 10-Q, filed on November 7, 2014)
4.1	Specimen common stock certificate (incorporated herein by reference to Exhibit 4.1 to our Form S-1 Registration Statement (Registration No. 333-177971), filed on August 22, 2012)
4.2	Registration Rights Agreement, dated as of October 20, 2009, by and between NBH Holdings Corp. and FBR Capital Markets, Inc. (incorporated herein by reference to Exhibit 4.2 to our Form S-1 Registration Statement (Registration No. 333-177971), filed on November 14, 2011)
4.3	Amendment No. 1, dated as of July 20, 2011, to the Registration Rights Agreement, dated as of October 20, 2009 by and between NBH Holdings Corp. and FBR Capital Markets, Inc. (incorporated herein by reference to Exhibit 4.3 to our Form S-1 Registration Statement (Registration No. 333-177971), filed on November 14, 2011)
10.1	Form of Indemnification Agreement by and between NBH Holdings Corp. and each of its directors and executive officers (incorporated herein by reference to Exhibit 10.6 to our Form S-1 Registration Statement (Registration Statement No. 333-177971), filed on September 10, 2012)^

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10.2	Employment Agreement, dated May 22, 2010, by and between G. Timothy Laney and NBH Holdings Corp. (incorporated herein by reference to Exhibit 10.1 to our Form S-1 Registration Statement (Registration Statement No. 333-177971), filed on September 10, 2012)^
10.3	First Amendment to Employment Agreement, dated November 17, 2015, by and between G. Timothy Laney and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.2 to our Form 8-K, filed on November 20, 2015)^
10.4	Amended and Restated Employment Agreement, dated November 17, 2015, by and between Richard U. Newfield, Jr. and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.4 to our Form 8-K, filed on November 20, 2015)^
10.5	Employment Agreement, dated November 17, 2015, by and between Brian F. Lilly and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.3 to our Form 8-K, filed on November 20, 2015)^
10.6	Employment Agreement, dated November 17, 2015, by and between Zsolt K. Besskó and National Bank Holdings Corporation (incorporated herein by reference to Exhibit 10.5 to our Form 8-K, filed on November 20, 2015)^
10.7	National Bank Holdings Corporation Employee Stock Purchase Plan (incorporated herein by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 30, 2015)^
10.8	NBH Holdings Corp. 2009 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.2 to our Form S-1 Registration Statement (Registration No. 333-177971), filed on November 14, 2011)^
10.9	Amendment to the NBH Holdings Corp. 2009 Equity Incentive Plan dated February 22, 2017 (incorporated herein by reference to Exhibit 10.10 to our form 10-K, filed on February 24, 2017)^
10.10	National Bank Holdings Corporation 2014 Omnibus Incentive Plan (incorporated herein by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 31, 2014)^
10.11	Form of National Bank Holdings Corporation 2014 Omnibus Incentive Plan Performance Stock Unit Award Agreement (For Management) (incorporated herein by reference to Exhibit 10.12 to our form 10-K, filed on February 24, 2017)^
10.12	Form of National Bank Holdings Corporation 2014 Omnibus Incentive Plan Restricted Stock Award Agreement (For Management) (incorporated herein by reference to Exhibit 10.13 to our form 10-K, filed on February 24, 2017)^
10.13	Form of National Bank Holdings Corporation 2014 Omnibus Incentive Plan Nonqualified Stock Option Agreement (For Management) (incorporated herein by reference to Exhibit 10.14 to our form 10-K, filed on February 24, 2017)^
10.14	Form of National Bank Holdings Corporation 2014 Omnibus Incentive Plan Market-Based Performance Award Agreement (For Management) (incorporated herein by reference to Exhibit 10.15 to our form 10-K, filed on February 24, 2017)^
10.15	Form of National Bank Holdings Corporation 2014 Omnibus Incentive Plan Restricted Stock Award Agreement (For Non-Employee Directors) (incorporated herein by reference to Exhibit 10.4 to our Form 10-Q, filed on May 9, 2014)^

127

10.16	Support Agreement, dated as of June 23, 2017, by and among Peoples, Inc., National Bank Holdings Corporation and the undersigned stockholders of Peoples, Inc. (incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated June 23, 2017 and filed on June 27, 2017)
10.17	Change of Control Agreement applicable to executive officers not party to an employee agreement (filed herewith)^
21.1	Subsidiaries of National Bank Holdings Corporation
23.1	Consent of KPMG LLP
31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail**

*Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request.

**This information is deemed furnished, not filed.

^Indicates a management contract or compensatory plan.

128

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on February 27, 2018, on its behalf by the undersigned, thereunto duly authorized.

National Bank Holdings Corporation

By	/s/ G. Timothy Laney
	G. Timothy Laney
	Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 27, 2018, by the following persons on behalf of the registrant and in the capacities indicated.

129

/s/ G. TIMOTHY LANEY

G. Timothy Laney

Chairman, President and Chief Executive Officer

(principal executive officer)

/s/ BRIAN F. LILLY

Brian F. Lilly

Chief Financial Officer; Chief of M&A and Strategy

(principal financial officer)

/s/ MICHAEL J. DALEY

Michael J. Daley

Chief Accounting Officer

(principal accounting officer)

/s/ RALPH W. CLERMONT

Ralph W. Clermont, Lead Director

/s/ ROBERT E. DEAN

Robert E. Dean, Director

/s/ FRED J. JOSEPH

Fred J. Joseph, Director

/s/ MICHO F. SPRING

Micho F. Spring, Director

/s/ BURNEY S. WARREN, III

Burney S. Warren, III, Director

/s/ ART ZEILE

Art Zeile, Director

130

EX-10.17

Exhibit 10.17

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT, dated as of the [DATE](this “Agreement”), is entered into by and among NBH Bank (the “Bank”), National Bank Holdings Corporation (the “Company” and together with the Bank, the “Employer”), and [_________] (the “Associate”).    

WHEREAS, the Board has determined that it is in the best interests of the Employer and its shareholders to assure that the Employer will have the continued dedication of the Associate, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein);

WHEREAS, the Board believes it is imperative to diminish the inevitable distraction of the Associate by virtue of the personal uncertainties and risks created by a threatened or pending Change of Control and to encourage the Associate’s full attention and dedication to the Employer in the event of any threatened or pending Change of Control, and to provide the Associate with compensation and benefits arrangements upon a Change of Control that ensure that the compensation and benefits expectations of the Associate will be satisfied and that provide the Associate with compensation and benefits arrangements that are competitive with those of other corporations; and

WHEREAS, to accomplish these objectives, the Board has caused the Bank and the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

Section 1. Definitions.    As used in this Agreement and unless otherwise defined herein, capitalized terms will have the respective meanings set forth in Appendix A hereto.

Section 2. Termination of Employment.

(a) Death or Disability.    The Associate’s employment shall terminate automatically if the Associate dies during the Protection Period.  If the Employer determines in good faith that a Disability of the Associate has occurred during the Protection Period, it may give to the Associate written notice in accordance with ‎Section 10(b) of its intention to terminate the Associate’s employment.  In such event, the Associate’s employment with the Employer shall terminate effective on the 30th day after receipt of such notice by the Associate (the “Disability Effective Date”); providedthat, within 30 days after such receipt, the Associate shall not have returned to full-time performance of the Associate’s duties. 

(b) Cause.The Employer may terminate the Associate’s employment during the Protection Period for or without Cause.  “Cause” means:

(i) the continued failure of the Associate to perform substantially the Associate’s duties with the Employer,  to adhere materially to the Employer’s material written policies, or to devote substantially all of the Associate’s business time and efforts to the Employer (other than any such failure resulting from incapacity due to physical or mental illness);

(ii) the willful misconduct or gross neglect by the Associate in the performance of his or her duties to the Employer;

(iii) the Associate’s conviction of or formal admission to or plea of guilty or nolocontendere to a charge of commission of, (A) a felony or (B) any crime involving serious moral turpitude;  or

(iv) the Associate’s willful breach of any of the material terms or conditions of this Agreement.

To invoke a termination for Cause on any of the grounds enumerated under Section 2(b)(i), (ii), (iii) or (iv) above, the Employer must provide written notice to the Associate of the existence of such grounds within 30 days following the Employer’s knowledge of the existence of such grounds, specifying in reasonable detail the grounds constituting Cause, and the Associate shall have 30 days following receipt of such written notice (the “Associate’s Cure Period”) during which he or she may remedy the ground if such ground is reasonably subject to cure.

For purposes of this Agreement, no act or failure to act, on the part of the Associate, shall be considered “willful” unless it is done, or omitted to be done, by the Associate in bad faith or without reasonable belief that the Associate’s action or omission was in the best interests of the Employer.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the advice of counsel for the Associate shall be conclusively presumed to be done, or omitted to be done, by the Associate in good faith and in the best interests of the Employer. 

(c) Good Reason.The Associate’s employment may be terminated during the Protection Period by the Associate for Good Reason or without Good Reason.  For purposes of this Agreement, “Good Reason” means, in the absence of the written consent of the Associate:

(i) a  material diminution in the Associate’s Annual Base Salary;    

(ii) the assignment to the Associate of any duties materially inconsistent with the Associate’s position, duties or responsibilities from those as in effect immediately prior to the Effective Date which results in a material diminution in such position, duties or responsibilities;

(iii) any requirement by the Employer that the Associate report to a primary work location that is more than 50 miles from the Associate’s primary work location immediately prior to the Effective Date, subject to the Associate’s performance of duties at, and travel to, any office location of the Employer and/or other locations as will be necessary to fulfill the Associate’s duties; or

(iv) any other material breach of this Agreement by the Employer.    

To invoke a termination for Good Reason, the Associate shall provide written notice to the Employer of the existence of one or more of the conditions described in clauses (i) through (iv) within 30 days following the Associate’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the

2

Employer shall have 30 days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition if such condition is reasonably subject to cure.  If the Employer fails to remedy the condition or conditions constituting Good Reason during the applicable Cure Period, the Associate’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within 30 days following such Cure Period for such termination as a result of such condition or conditions to constitute a termination for Good Reason.

(d) Notice of Termination.Any termination of employment by the Employer for Cause, or by the Associate for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with ‎Section 10(b).  “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Associate’s employment under the provision so indicated, and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination, which Date of Termination shall be not more than 30 days after the giving of such notice or 30 days after the end of the Cure Period, if applicable, in the case of a termination by the Associate with Good Reason.  The failure by the Associate or the Employer to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Associate or the Employer, respectively, hereunder or preclude the Associate or the Employer, respectively, from asserting such fact or circumstance in enforcing the Associate’s or the Employer’s respective rights hereunder.

(e) Date of Termination.“Date of Termination” means (i) if the Associate’s employment is terminated by the Employer other than for Cause or Disability, or by the Associate without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein within 30 days of such notice, as the case may be, (ii) if the Associate’s employment is terminated by the Associate with Good Reason during such period, a date that is no later than 30 days after the Cure Period, if applicable,  (iii)  if the Associate’s employment is terminated by the Employer for Cause,  the Date of Termination shall be the date on which the Employer, after providing the Associate’s Cure Period, if applicable, notifies the Associate of such termination, and (iv) if the Associate’s employment is terminated by reason of death or Disability, the date of death of the Associate or the Disability Effective Date, as the case may be. 

Section 3. Obligations of the Employer upon Termination.

(a) By the Associate for Good Reason;  by the Employer Other Than for Cause, Death or Disability.  If, during the Protection Period, the Employer terminates the Associate’s employment other than for Cause, death or Disability or the Associate terminates his or her employment for Good Reason:

(i) the Company or the Bank shall pay to the Associate, at the time and subject to the conditions set forth below, the following:

(A) a lump sum cash payment within 30 days of the Date of Termination equal to the sum of (I)  the Associate’s Annual Base Salary through the Date of Termination to the extent not yet paid;  (II)  the Associate’s reasonable business

3

expenses that have not been reimbursed by the Employer as of the Date of Termination; (III) any annual incentive or bonus (the “Annual Bonus”) earned by the Associate for a prior award period, but not yet paid to the Associate,  provided that (other than any portion of such Annual Bonus that was previously deferred, which portion shall instead be paid in accordance with the applicable deferral arrangement and any election thereunder) such payment shall be made no later than the 15th day of the third month following the close of the fiscal year with respect to which such Annual Bonus is earned;  and (IV) any accrued vacation pay to the extent not theretofore paid (the sum of the amounts described in subclauses (I), (II), (III) and (IV), the “Accrued Obligations”); and

(B) subject to the Associate’s execution, delivery to the Employer and non-revocation within 55 days following the Date of Termination of a release of claims in favor of the Employer and its Affiliated Entities substantially in the form attached hereto as Exhibit A,  a lump sum cash payment on the 55th day following the Date of Termination (except as otherwise required by law or provided below) the amount equal to one times the sum of (I) the Associate’s Annual Base Salary and (II)  the higher of (x) the Associate’s target annual incentive opportunity for the year in which the Date of Termination occurs and (y) the Annual Bonus paid or payable to the Associate in respect of the fiscal year immediately prior to the year in which the Date of Termination occurs.

(ii) To the extent not theretofore paid or provided, the Employer shall timely pay or provide to the Associate any other amounts or benefits required to be paid or provided or which the Associate is eligible to receive under any plan, program, policy or practice or contract or agreement of the Employer and the Affiliated Entities through the Date of Termination (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

(b) Death.  If the Associate’s employment is terminated by reason of the Associate’s death during the Protection Period, the Employer shall provide the Associate’s estate or beneficiaries with the Accrued Obligations and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement.  The Accrued Obligations shall be paid to the Associate’s estate or beneficiaries, as applicable, in a lump sum in cash within 30 days of the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this ‎Section 3(b) shall include, without limitation, and the Associate’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company, the Bank and the Affiliated Entities to the estates and beneficiaries of peer executives of the Company, the Bank and the Affiliated Entities under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Associate’s estate and/or the Associate’s beneficiaries, as in effect on the date of the Associate’s death with respect to other peer executives of the Company, the Bank and the Affiliated Entities and their beneficiaries.

(c) Disability.If the Associate’s employment is terminated by reason of the Associate’s Disability during the Protection Period, the Employer shall provide the Associate with the Accrued Obligations and the timely payment or delivery of the Other Benefits in accordance with the terms of the underlying plans or agreements, and shall have no other

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severance obligations under this Agreement.  The Accrued Obligations shall be paid to the Associate in a lump sum in cash within 30 days of the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this ‎Section 3(c) shall include, without limitation, and the Associate shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company, the Bank and the Affiliated Entities to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Associate and/or the Associate’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company, the Bank and the Affiliated Entities and their families.

(d) Cause; Other Than for Good Reason.If the Associate’s employment is terminated for Cause during the Protection Period, the Employer shall provide the Associate with the Accrued Obligations and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement.  If the Associate voluntarily terminates employment during the Protection Period, excluding a termination for Good Reason, the Employer shall provide to the Associate with the Accrued Obligations and the timely payment or delivery of the Other Benefits and shall have no other severance obligations under this Agreement.  In such case, all the Accrued Obligations shall be paid to the Associate in a lump sum in cash within 30 days of the Date of Termination.

Section 4. Nonexclusivity of Rights.  Nothing in this Agreement shall prevent or limit the Associate’s continuing or future participation in any plan, program, policy or practice provided by the Employer or the Affiliated Entities and for which the Associate may qualify, nor, subject to ‎Section 10(f), shall anything herein limit or otherwise affect such rights as the Associate may have under any other contract or agreement with the Employer or the Affiliated Entities.  Amounts that are vested benefits or that the Associate is otherwise entitled to receive under any plan, policy, practice or program of or any other contract or agreement with the Company, the Bank or the Affiliated Entities at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.  Notwithstanding the foregoing, if the Associate receives payments and benefits pursuant to ‎Section 3(a),  the Associate shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company, the Bank and the Affiliated Entities, unless otherwise specifically provided therein in a specific reference to this Agreement. 

Section 5. No Mitigation.  The Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Employer may have against the Associate or others.  In no event shall the Associate be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Associate under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Associate obtains other employment.

Section 6. Section 280G Considerations.    

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(a) Anything in this Agreement to the contrary notwithstanding, in the event the Accounting Firm shall determine that receipt of all Payments would subject the Associate to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to this Agreement (the “Agreement Payments”) so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount.  The Agreement Payments shall be so reduced only if the Accounting Firm determines that the Associate would have a greater Net After-Tax Receipt of aggregate Payments if the Agreement Payments were so reduced.  If the Accounting Firm determines that the Associate would not have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Agreement Payments were so reduced, the Associate shall receive all Agreement Payments to which the Associate is entitled hereunder.

(b) If the Accounting Firm determines that aggregate Agreement Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Employer shall promptly give the Associate notice to that effect and a copy of the detailed calculation thereof.  All determinations made by the Accounting Firm under this Section 6 shall be binding upon the Employer and the Associate and shall be made as soon as reasonably practicable and in no event later than 15 days following the Date of Termination.  For purposes of reducing the Agreement Payments so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced.  If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments constitutes “deferred compensation” within the meaning of and subject to Section 409A of the Code (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner the Associate elects in writing prior to the date of payment.  If any Payment constitutes Nonqualified Deferred Compensation, then the Payments to be reduced will:  (a) first, be reduced with respect to the payments or benefits provided pursuant to ‎Section 3(a)(i)(B), (b) second, be reduced with respect to all rights to payments, vesting or benefits in connection with any restricted stock awards that are performance-based vesting awards; (c) third, be reduced with respect to all rights to payments, vesting or benefits in connection with any options to purchase common stock or restricted stock or restricted stock unit awards that are time-based vesting awards; and (d) fourth, be reduced with respect to all rights to any other payments or benefits, beginning with payments or benefits that would be received last in time. All fees and expenses of the Accounting Firm shall be borne solely by the Employer. 

(c) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Employer to or for the benefit of the Associate pursuant to this Agreement which should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Employer to or for the benefit of the Associate pursuant to this Agreement could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Safe Harbor Amount hereunder.  In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Employer or the Associate which the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, the Associate shall pay promptly (and in no event later than 60 days following the date on which the Overpayment is determined) pay any such Overpayment to the Company together with

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interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided,  however,  that no amount shall be payable by the Associate to the Employer if and to the extent such payment would not either reduce the amount on which the Associate is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes.  In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than 60 days following the date on which the Underpayment is determined) by the Employer to or for the benefit of the Associate together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

(d) To the extent requested by the Associate, the Employer shall cooperate with the Associate in good faith in valuing, and the Accounting Firm shall take into account the value of, services provided or to be provided by the Associate (including without limitation, the Associate’s agreeing to refrain from performing services pursuant to a non-solicitation covenant or similar covenant, including that set forth in Section 8 of this Agreement) before, on or after the date of a change in ownership or control of the Employer (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the final regulations under Section 280G of the Code in accordance with Q&A-5(a) of the final regulations under Section 280G of the Code.

Section 7. Confidential Information.    The Associate agrees that, during his or her employment with the Employer and at all times thereafter, he or she shall hold for the benefit of the Employer all secret or confidential information, knowledge or data relating to the Employer or any of the Affiliated Entities, and their respective businesses, which shall have been obtained by the Associate during the Associate’s employment by the Employer or during his or her consultation with the Employer after his or her termination of employment, and which shall not be or become public knowledge (other than by acts by the Associate or representatives of the Associate in violation of this Agreement).  Except in the good faith performance of his or her duties for the Employer, the Associate shall not, without the prior written consent of the Employer or as may otherwise be required or permitted by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Employer and those designated by it.

Notwithstanding the above confidentiality provisions, note that nothing in this Agreement, nor in any other confidentiality agreement, nor in the Employer’s policies should be interpreted as prohibiting the Associate, without the Employer’s prior consent, from: (1) reporting possible violations of federal law or regulations, including any securities laws violations, to any governmental agency or entity, including but not limited to the Department of Justice, the U.S. Securities & Exchange Commission, the U.S. Congress, or any agency Inspector General; or (2) making any other disclosures that are protected under the whistleblower provisions of federal law or regulations; or (3) otherwise fully participating in any federal whistleblower programs.

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Please refer to the National Bank Holdings Corporation Associate Handbook, a copy of which is available upon request, regarding the Associate’s rights related to the disclosure of the Employer’s trade secrets.

Section 8. Restrictive Covenants.    

(a) Return of Company Property.  Upon his or her termination of employment for any reason, the Associate shall promptly return to the Employer any keys, credit cards, passes, confidential documents or material, or other property belonging to the Employer, and the Associate shall also return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) containing confidential information or relating to the business or proposed business of the Employer or the Affiliated Entities or containing any trade secrets relating to the Employer or the Affiliated Entities except any personal diaries, calendars, rolodexes or personal notes or correspondence.  For purposes of the preceding sentence, the term “trade secrets” shall have the meaning ascribed to it under the Uniform Trade Secrets Act.  The Associate agrees to represent in writing to the Employer upon termination of employment that he or she has complied with the foregoing provisions of this ‎Section 8(a).

(b) Nondisparagement.  The Associate agrees that, while he or she is employed and following the Associate’s termination of employment for any reason, the Associate will not make any statements that disparage the Company, the Bank or any Affiliated Entity or any director, officer or other Associate of the Company, the Bank or any Affiliated Entity.  Notwithstanding the foregoing, nothing in this ‎Section 8(b) shall prohibit the Associate from making truthful statements when required by order of a court or other governmental or regulatory body having jurisdiction or to enforce any legal right including, without limitation, the terms of this Agreement.

(b) Nonsolicitation.  The Associate agrees that, while he or she is employed by the Employer and during the one-year period following his or her termination of employment with the Employer (the “Restricted Period”), the Associate shall not directly or indirectly, (i) solicit any individual who is, on the Date of Termination (or was, during the six-month period prior to the Date of Termination), employed by the Employer or the Affiliated Entities to terminate or refrain from renewing or extending such employment or to become employed by or become a consultant to any other individual or entity other than the Employer or the Affiliated Entities, (ii) initiate discussions with any such Associate or former Associate for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other individual or entity on behalf of the Associate’s employer, (iii) solicit any client or customer of the Employer or any of the Affiliated Entities to transact business with a Competitive Enterprise, or (iv) induce or attempt to induce any client, customer or investor (in each case, whether former, current or prospective), vendor, supplier, licensee or other business relation of the Employer or any of the Affiliated Entities to reduce or cease doing business with the Employer or such Affiliated Entity, or in any way interfere with the relationship between any such client, customer, investor, vendor, supplier, licensee or business relation, on the one hand, and the Employer or any Affiliated Entity, on the other hand.

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(b) Equitable Remedies.  The Associate acknowledges that the Employer would be irreparably injured by a violation of ‎Section 7 or ‎Section 8(b) or ‎8(c) and he or she agrees that the Employer, in addition to any other remedies available to it for such breach or threatened breach, on meeting the standards required by law, shall be entitled to a preliminary injunction, temporary restraining order, or other equivalent relief, restraining the Associate from any actual or threatened breach of ‎Section 7 or ‎Section 8(b) or ‎8(c).  If a bond is required to be posted in order for the Employer to secure an injunction or other equitable remedy, the parties agree that said bond need not be more than a nominal sum.

(b) Severability; Blue Pencil.  The Associate acknowledges and agrees that he or she has had the opportunity to seek advice of counsel in connection with this Agreement and the restrictive covenants contained herein are reasonable in geographical scope, temporal duration and in all other respects.  If it is determined that any provision of this ‎Section 8 is invalid or unenforceable, the remainder of the provisions of this ‎Section 8 shall not thereby be affected and shall be given full effect, without regard to the invalid portions.  If any court or other decision-maker of competent jurisdiction determines that any of the covenants in this ‎Section 8 is unenforceable because of the duration or geographic scope of such provision, then after such determination becomes final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable, and in its reduced form, such provision shall be enforced.

Section 9. Successors.

(a) This Agreement is personal to the Associate and without the prior written consent of the Employer shall not be assignable by the Associate.  This Agreement and any rights and benefits hereunder shall inure to the benefit of and be enforceable by the Associate’s legal representatives, heirs or legatees.  This Agreement and any rights and benefits hereunder shall inure to the benefit of and be binding upon the Employer and its successors and assigns.

(b) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place.  “Company”  and “Bank”  mean the Company and the Bank as hereinbefore defined and any successor to their respective business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise.

Section 10. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without reference to principles of conflict of laws.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  Subject to the last sentence of ‎Section 10(g), this Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives.  Notwithstanding the foregoing, this Agreement may be terminated by the Employer any time prior to a Change of Control by providing the Associate with written notice of the Employer’s decision to terminate this Agreement on the date that is one year from the date

9

of such written notice;  provided,  however,  that, if during such one-year notice period, a Change of Control occurs, such notice shall be null and void and this Agreement shall remain in full force and effect.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

if to the Associate:

At the most recent address on file at the Employer.

if to the Employer:

National Bank Holdings Corporation

7800 East Orchard Road, Suite 300

Greenwood Village, CO  80111

Attention:  General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Employer may withhold from any amounts payable under this Agreement such United States federal, state or local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Associate’s or the Employer’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Associate or the Employer may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) The Associate and the Employer acknowledge that, except as may otherwise be provided under any other written agreement between the Associate and the Employer, the employment of the Associate by the Employer is “at will.”    From and after the Effective Date, except as specifically provided herein, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereofin effect immediately prior to the execution of this Agreement.

(g) This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, shall in all respects be administered in accordance with Section 409A of the Code.  Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may the Associate, directly or indirectly,

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designate the calendar year of any payment to be made under this Agreement.  Notwithstanding the foregoing provisions of Sections ‎3(a)(i) and ‎3(a)(ii),  if the Associate is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Employer as in effect on the Date of Termination), amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that would otherwise be payable and benefits that would otherwise be provided under  ‎Section 3(a),  ‎3(c) or ‎3(d) during the six-month period immediately following the Date of Termination on account of the Associate’s separation from service shall instead be paid, with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code as determined as of the Date of Termination, or provided on the first business day after the date that is six months following the Associate’s Date of Termination.  If the Associate dies following the Date of Termination and prior to the payment of the any amounts delayed on account of Section 409A of the Code, such amounts shall be paid to the personal representative of the Associate’s estate within 30 days after the date of the Associate’s death.  All reimbursements and in-kind benefits provided under this Agreement that constitute “deferred compensation” within the meaning of Section 409A of the Code shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation, that (i) in no event shall reimbursements by the Employer under this Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred; provided that the Associate shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (ii) the amount of in-kind benefits that the Employer is obligated to pay or provide in any given calendar year (other than medical reimbursements described in Treas. Reg. § 1.409A-3(i)(1)(iv)(B)) shall not affect the in-kind benefits that the Employer is obligated to pay or provide in any other calendar year; (iii) the Associate’s right to have the Employer pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Employer’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Associate’s remaining lifetime (or if longer, through the 20th anniversary of the Effective Date). 

(h) Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement (other than a controversy or claim arising under ‎Section 7 or ‎Section 8 of this Agreement) that is not resolved by the Associate and the Employer shall be submitted to confidential arbitration in a location selected by the Company in accordance with Colorado law and the procedures of the American Arbitration Association.  The determination of the arbitrator shall be conclusive and binding on the Employer and the Associate and judgment may be entered on the arbitrator’s awards in any court having competent jurisdiction.

(i) This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

Section 11. Survivorship.  Upon the expiration or other termination of this Agreement or the Associate’s employment, the respective rights and obligations of the parties hereto shall survive to the extent necessary to carry out the intentions of the parties under this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Associate has hereunto set the Associate’s hand and, pursuant to the authorization from the Board, the Company and the Bank have each caused these presents to be executed in its name on its behalf, all as of the date first above written.

NATIONAL BANK HOLDINGS CORPORATION

By: ____________________________________
     Name:
     Title:  

NBH BANK

By: ____________________________________
     Name:
     Title:  

ASSOCIATE

_______________________________________
[Associate]

[Signature Page to Change of Control Agreement]

Appendix A

Certain Defined Terms

“Accounting Firm” means a nationally recognized certified public accounting firm (which accounting firm shall in no event be the accounting firm for the entity seeking to effectuate the applicable Change of Control) or other professional services organization that is a certified public accounting firm recognized as an expert in determinations and calculations for purposes of Section 280G of the Code that is selected by the Employer (as it exists prior to a Change of Control).

“Affiliated Entities” means any company controlled by, controlling or under common control with the Company or the Bank, as applicable.

“Annual Base Salary” means the Associate’s annual base salary as in effect as of the Effective Date or, if higher, at any time thereafter.

“Board” means the Board of Directors of the Company.

“Change of Control” shall mean the occurrence of any of the following events:

(a) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (A) the then-outstanding Shares of the Company (the “Outstanding Company Common Stock”), or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided,  however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control:  (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (iv) any acquisition by any entity pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) below; or

(b) A change in the composition of the Board such that the individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided,  however, that, for purposes of this Agreement, any individual who becomes a member of the Board subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; provided,  further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be considered as a member of the Incumbent Board; or

Appendix A-1

(c) The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, or sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a noncorporate entity, equivalent securities), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then-outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors (or, for a noncorporate entity, equivalent body or committee) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.

“Competitive Enterprise” means any business enterprise that either (A) engages in any activity closely associated with commercial banking or any other financial services business, including the operations of an institution, the deposits of which are insured by the Federal Deposit Insurance Corporation, that is competitive with any portion of the business conducted by the Employer or any of the Affiliated Entities.

“Disability” means the inability of the Associate to perform the Associate’s duties with the Employer on a full-time basis as a result of incapacity due to mental or physical illness, which inability exists for 180 days during any rolling 12-month period, as determined by a physician selected by the Employer or its insurers.

“Effective Date” means the first date on which a Change of Control occurs.  Notwithstanding anything in this Agreement to the contrary, if (a)  the Associate’s employment with the Employer is terminated by the Employer, (b) the Date of Termination is prior to the date

Appendix A-2

on which a Change of Control occurs, and (c) it is clearly demonstrated by the Associate that such termination of employment was at the request of a third party that has taken steps reasonably calculated to effect a Change of Control, then for all purposes of this Agreement, the “Effective Date” means the date immediately prior to such Date of Termination.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Net After-Tax Receipt” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on the Associate with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied to the Associate’s taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm determined to be likely to apply to the Associate in the relevant tax year(s).

“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

“Protection Period” means the period commencing on the Effective Date and ending on the date that is 18 months immediately following the Effective Date, provided that the Associate is employed on the Effective Date. 

“Safe Harbor Amount” shall mean 2.99 times the Associate’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

Appendix A-3

Exhibit A

Release Agreement

This Release Agreement (this “Agreement”) is made and entered into by and among National Bank Holdings Corporation, a Delaware corporation (the “Company”), and its subsidiary bank, NBH Bank., a Colorado state-chartered bank, and all other divisions, related, successor, and sister entities (together with the Company, “NBH”) and [__________] (the “Executive”).

WHEREAS, the Executive and the Company are party to that certain Change of Control Agreement dated as of [________] (the “Agreement”);

WHEREAS, the Executive’s employment shall end effective [___________];

WHEREAS, NBH and the Executive wish to resolve any and all disputes that exist between them or could exist between them; and

WHEREAS, the parties acknowledge that this Agreement is the result of good faith negotiations and compromise and nothing in this Agreement is intended to or will constitute an admission by NBH or any of its agents or employees of any liability to the Executive.

NOW, THEREFORE, in consideration of the Company agreeing to provide the compensation and benefits under Section 3(a)(i)(B) of the Agreement to the Executive and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, NBH and the Executive hereby agree as follows:

Section 1. Full and General Release of Liability.  The Executive hereby forever WAIVES, RELEASES, AND DISCHARGES National Bank Holdings Corporation, NBH Bank,  all of their respective subsidiaries and divisions, including Bank Midwest, Community Banks of Colorado, Hillcrest Bank and any related, and affiliated entities, and all of their current and past employees, directors, officers, fiduciaries, owners, agents, successors, assigns, insurers, attorneys, and contractors, without limitation, exception, or reservation (the “Affiliates”), from any and all liability, actions, claims, demands, or lawsuits that the Executive may have had, presently has, or in the future may have, in connection with or arising out of the Executive’s employment with, or separation from, NBH.  This release applies to any and all claims against NBH and/or the Affiliates, known or unknown, arising under contract or under federal, state, or local statutory or common (including civil tort) law, which have been asserted or which could have been asserted including, but not limited to, any and all claims under Title VII of the Civil Rights Act of 1964 (as amended), the Civil Rights Act of 1991, 42 U.S.C. § 1981, 42 U.S.C. § 1983, the Americans with Disabilities Act (as amended), the Rehabilitation Act, the Age Discrimination in Employment Act (as amended) (“ADEA”), the Family Medical Leave Act (as amended), the Genetic Information Non-Discrimination Act, the Employment Retirement Income Security Act (as amended), the Consolidated Omnibus Budget Reconciliation Act, the Kansas Acts Against Discrimination, the Kansas Age Discrimination in Employment Act, the Missouri Human Rights Act, the Colorado Anti-Discrimination Act, the Kansas Wage Payment Act, the Missouri wage payment statutes, and any other state statute, any state common

Exhibit A-1

law, including, but not limited to, any cause of action for wrongful termination, breach of contract, and any other federal, state, or local laws, including common law, to the maximum extent permitted by law, without limitation or exception.  It is understood and agreed that this is a full and final release covering all known or unknown, undisclosed and unanticipated losses, wrongs, injuries, debts, claims, or damages to the Executive that may have arisen, or may arise from any act or omission prior to the date of execution of this Agreement arising out of or related, directly or indirectly, to the Executive’s employment, or separation from employment with NBH, or to any professional relationship between the Executive and/or the employees, agents, representatives, and affiliates of NBH during the Executive’s employment with NBH, as well as those alleged losses, wrongs, injuries, debts, claims, or damages now known or disclosed that have arisen, or may arise as a result of any act or omission.  Notwithstanding anything to the contrary, the released claims do not include, and this Agreement does not release any: (a) rights to compensation and benefits provided under Section 3(a)(i)(A) of the Agreement or under any other benefit plan, agreement, arrangement, or policy of NBH that is applicable to the Executive that, in each case, by its terms, contains obligations that are to be performed after the date hereof by NBH; (b) any rights to indemnification the Executive may have under applicable law, the bylaws or certificate of incorporation of NBH, or any other agreement or any rights with respect to coverage under any director and officer liability policy, as a result of having served as an officer or director of NBH or any Affiliates; (b) claims that the Executive may not by law release through a settlement agreement such as this; (c) claims the Executive may have as the holder or beneficial owners of securities (or other rights relating to securities) of the Company; or (e) rights to accrued but unpaid salary, vacation, and paid time off or to unreimbursed business expenses through the date of the Executive’s date of termination.

Section 1. Executive Acknowledgements.  The Executive acknowledges that as of the date the Executive executed this Agreement, the Executive (a) has not suffered a work-related injury that has not properly been disclosed to NBH; (b) has been paid in full all wages due and owing to the Executive for any and all work performed for NBH; and (c) has disclosed to NBH any action/inaction the Executive took/failed to take during the Executive’s employment with NBH that could give rise to a claim against NBH or the Affiliates, and/or any other third party.

Section 1. Non-Interference.  Nothing in this Agreement shall interfere with the Executive’s right to file a charge, cooperate, or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission, or any other federal or state regulatory or law enforcement agency.  The consideration provided to Executive pursuant to Section 3(a)(i)(B) of the Agreement, however, shall be the sole relief provided to the Executive for the claims that are released by the Executive pursuant to this Agreement and the Executive shall not be entitled to recover and agrees to waive any monetary benefits or recovery against NBH in connection with any such claim, charge, or proceeding, without regard to who has brought such charge or complaint.

Section 1. Return of NBH Property.  The Executive acknowledges that, as of the last day of employment, the Executive has returned and surrendered to NBH all NBH property and equipment (unless otherwise specified herein).  The Executive acknowledges and agrees that all such materials are, and will always remain, the exclusive property of NBH.

Exhibit A-2

Section 1. Consideration and Revocation Periods; Counsel.  The Executive acknowledges that Employee has read this Agreement, has been given 21 calendar days to consider this Agreement, although the Executive may return it sooner if desired, and is hereby advised to consult with legal counsel regarding this Agreement.  If the Executive signs this Agreement prior to the expiration of the 21-day period, the Executive hereby states that the Executive has voluntarily and knowingly decided to shorten the time period and that NBH has not induced the Executive to do so.  The Executive further acknowledges that the Executive has seven calendar days to revoke this Agreement after executing the same.  Notice of revocation should be sent, in writing, to the Legal Department, National Bank Holdings Corporation, 7800 E. Orchard Road, Suite 300, Greenwood Village, Colorado 80111.  NBH hereby advises the Executive to consult with an attorney before signing this Agreement.  This Agreement shall become effective on the eighth calendar day after its execution absent any revocation.  The parties also agree that the release provided by the Executive in this Agreement does not include a release for claims under the ADEA arising after the date the Executive signs this Agreement.

Section 1. No Admission.  The execution of this Agreement does not and shall not constitute an admission by NBH of liability to the Executive.  NBH specifically denies that it or its current or past insurers, agents, or employees have violated the Executive’s rights under any federal, state, or local constitution, statute, law, or common law in connection with the Executive’s employment, including the Executive’s separation therefrom.  Likewise, the execution of this Agreement does not and shall not constitute an admission by the Executive of liability to NBH.

Section 1. Entire Agreement.  This Agreement contains the entire agreement between and among the parties and cannot be modified in any respect in the future except in a writing signed by the parties hereto.

Section 1. Severability.  It is expressly understood to be the intent of the parties hereto that the terms and provisions of this Agreement are severable and if, at any time in the future or for any reasons, any term or provision in this Agreement is declared unenforceable, void, voidable, or otherwise invalid, the remaining terms and provisions shall remain valid and enforceable as written.

Section 1. Governing Law.  The terms and provisions of this Agreement shall be interpreted and enforced under the substantive law of the State of Colorado, to the extent state law applies, and under federal law, to the extent federal law applies.

Section 1. Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.  Any party to this Agreement may execute this Agreement by signing any such counterpart.

Section 1. Headings.  The headings to this Agreement are for convenience only, and are not to be used in the interpretation of the terms hereof.

Section 1. Voluntary Signing.  The Executive acknowledges that the Executive has read this Agreement and understands it and has signed it voluntarily.

Exhibit A-3

PLEASE READ THIS AGREEMENT CAREFULLY; IT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

IN WITNESS WHEREOF, NBH has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed this Agreement, as of the dates written below.

EXECUTIVE

________________________________________
[Executive]

________________________________________
DATE

NATIONAL BANK HOLDINGS CORPORATION

and

NBH BANK

By: ____________________________________
      Name:  
      Title:    

Exhibit A-3

EX-21.1

Exhibit 21.1

Subsidiary	Jurisdiction of Organization	Trade Names
NBH Bank	Colorado	Bank Midwest; Community Banks of Colorado; Hillcrest Bank; and NBH Capital Finance
NBH Realty I, LLC	Missouri
NBH Realty II, LLC	Missouri

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

National Bank Holdings Corporation:

We consent to the incorporation by reference in the registration statement No. 333-177971 on Form S-1, No. 333-184054 and No. 333-222792 on Form S-3, and No. 333-204071 and No. 333-195785 on Form S-8 of National Bank Holdings Corporation and subsidiaries (the Company) of our reports dated February 27, 2018, with respect to the consolidated statements of financial condition of the Company as of December 31, 2017 and 2016,  and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively, the consolidated financial statements), and the effectiveness of internal control over financial reporting as of December 31, 2017, which reports appear in the December 31, 2017 annual report on Form 10-K of the Company.

Kansas City,  Missouri

February 27, 2018

EX-31.1

Exhibit 31.1

Certifications of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, G. Timothy Laney, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of National Bank Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 27, 2018	/s/ G. Timothy Laney
		G. Timothy Laney
		Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Brian F. Lilly, Chief Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-K of National Bank Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

9
Date:	February 27, 2018	/s/ Brian F. Lilly
		Brian F. Lilly
		Chief Financial Officer; Chief of M&A and Strategy

EX-32

Exhibit 32

Certifications of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of National Bank Holdings Corporation (the “Company”) on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: (1) this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date:	February 27, 2018	/s/ G. Timothy Laney
		G. Timothy Laney
		Chief Executive Officer
Date:	February 27, 2018	/s/ Brian F. Lilly
		Brian F. Lilly
		Chief Financial Officer; Chief of M&A and Strategy

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Feb. 22, 2018	Jun. 30, 2017
Document Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	NBHC
Entity Registrant Name	National Bank Holdings Corp
Entity Central Index Key	0001475841
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		30,312,222
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 866,000,000

XML

Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
ASSETS
Cash and due from banks	$ 193,297	$ 152,736
Interest bearing bank deposits	64,067
Cash and cash equivalents	257,364	152,736
Investment securities available-for-sale (at fair value)	855,345	884,232
Investment securities held-to-maturity (at amortized cost)	258,730	332,505
Non-marketable securities	15,030	14,949
Loans	3,178,947	2,860,921
Allowance for loan losses	(31,264)	(29,174)
Loans, net	3,147,683	2,831,747
Loans held for sale	4,629	24,187
Other real estate owned	10,491	15,662
Premises and equipment, net	93,708	95,671
Goodwill	59,630	59,630
Intangible assets, net	1,607	6,949
Other assets	139,248	154,778
Total assets	4,843,465	4,573,046
Liabilities:
Non-interest bearing demand deposits	902,439	846,744
Interest bearing demand deposits	474,607	427,538
Savings and money market	1,484,463	1,422,321
Time deposits	1,118,050	1,172,046
Total deposits	3,979,559	3,868,649
Securities sold under agreements to repurchase	130,463	92,011
Federal Home Loan Bank advances	129,115	38,665
Other liabilities	71,921	37,532
Total liabilities	4,311,058	4,036,857
Shareholders' equity:
Common stock	515	514
Additional paid in capital	970,668	984,087
Retained earnings	60,795	55,454
Treasury stock at cost	(493,329)	(502,104)
Accumulated other comprehensive income (loss), net of tax	(6,242)	(1,762)
Total shareholders' equity	532,407	536,189
Total liabilities and shareholders' equity	$ 4,843,465	$ 4,573,046

XML

Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Investment securities held-to-maturity, fair value	$ 256,771	$ 332,573
Common Stock, par value (in dollars per share)	$ 0.01
Common Stock, shares authorized	400,000,000
Common Stock, shares issued	51,518,162	51,813,011
Common Stock, shares outstanding	26,875,585	26,386,583
Treasury stock, shares	24,479,020	24,927,157

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest and dividend income:
Interest and fees on loans	$ 137,249	$ 129,317	$ 131,253
Interest and dividends on investment securities	24,841	29,665	38,145
Dividends on non-marketable securities	839	748	1,210
Interest on interest-bearing bank deposits	1,492	718	799
Total interest and dividend income	164,421	160,448	171,407
Interest expense:
Interest on deposits	16,172	13,963	13,609
Interest on borrowings	1,943	845	853
Total interest expense	18,115	14,808	14,462
Net interest income before provision for loan losses	146,306	145,640	156,945
Provision for loan losses	12,972	23,651	12,444
Net interest income after provision for loan losses	133,334	121,989	144,501
Non-interest income:
Service charges	14,634	13,900	14,798
Bank card fees	12,026	11,429	10,898
Gain on sale of mortgages, net	2,154	2,881	1,963
Bank-owned life insurance income	1,871	1,861	1,614
Other non-interest income	8,082	7,708	4,301
OREO related income	438	2,248	2,379
Bargain purchase gain			1,048
FDIC loss-sharing related			(15,553)
Total non-interest income	39,205	40,027	21,448
Non-interest expense:
Salaries and benefits	80,188	79,765	83,018
Occupancy and equipment	20,994	22,904	24,490
Telecommunications and data processing	7,188	5,970	11,507
Marketing and business development	2,683	2,564	4,325
FDIC deposit insurance	2,762	3,236	3,922
Bank card expenses	3,986	4,440	3,701
Professional fees	3,330	3,496	4,495
Other non-interest expense	10,360	8,554	11,107
Problem asset workout	3,994	3,983	7,317
Gain on OREO sales, net	(4,150)	(4,383)	(2,776)
Intangible asset amortization	5,342	5,480	5,401
Loss (gain) from the change in fair value of warrant liability			106
Banking center consolidation related expenses			1,411
Total non-interest expense	136,677	136,009	158,024
Income before income taxes	35,862	26,007	7,925
Income tax expense	21,283	2,947	3,044
Net income	$ 14,579	$ 23,060	$ 4,881
Income per share-basic (in dollars per share)	$ 0.54	$ 0.81	$ 0.14
Income per share-diluted (in dollars per share)	$ 0.53	$ 0.79	$ 0.14
Weighted average number of common shares outstanding:
Basic (Shares)	26,928,763	28,313,061	34,349,996
Diluted (Shares)	27,709,659	29,091,343	34,363,487

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 14,579	$ 23,060	$ 4,881
Securities available-for-sale:
Net unrealized gains (losses) arising during the period, net of tax	(3,128)	42	(3,275)
Less: amortization of net unrealized holding gains to income, net of tax	(1,352)	(1,899)	(2,469)
Other comprehensive income (loss)	(4,480)	(1,857)	(5,744)
Comprehensive income (loss)	$ 10,099	$ 21,203	$ (863)

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Tax (expense) benefit on net unrealized gains arising during the period	$ 1,871	$ (26)	$ 2,015
Tax (expense) benefit of amortization of net unrealized holding gains to income	$ 828	$ 1,166	$ 1,523

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common stock [Member]	Additional paid-in capital [Member]	Retained earnings [Member]	Treasury stock [Member]	Accumulated other comprehensive income (loss), net [Member]	Total
Balance in the beginning at Dec. 31, 2014	$ 512	$ 993,212	$ 40,528	$ (245,516)	$ 5,839	$ 794,575
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			4,881			4,881
Stock-based compensation		3,349				3,349
Issuance under purchase and equity compensation plans, including (gain) loss on reissuance of treasury stock	1	(1,701)		904		(796)
Repurchase of shares				(175,048)		(175,048)
Cash dividends declared			(6,739)			(6,739)
Warrant reclassification		3,066				3,066
Other comprehensive income (loss)					(5,744)	(5,744)
Balance in the ending at Dec. 31, 2015	513	997,926	38,670	(419,660)	95	617,544
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			23,060			23,060
Stock-based compensation		3,492				3,492
Issuance under purchase and equity compensation plans, including (gain) loss on reissuance of treasury stock	1	(13,790)		7,588		(6,201)
Repurchase of shares				(93,573)		(93,573)
Cash dividends declared			(6,276)			(6,276)
Warrant exercise		(3,541)		3,541
Other comprehensive income (loss)					(1,857)	(1,857)
Balance in the ending at Dec. 31, 2016	514	984,087	55,454	(502,104)	(1,762)	536,189
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			14,579			14,579
Stock-based compensation		3,648				3,648
Issuance under purchase and equity compensation plans, including (gain) loss on reissuance of treasury stock	1	(15,134)		6,842		(8,291)
Cash dividends declared			(9,238)			(9,238)
Warrant exercise		(1,933)		1,933
Other comprehensive income (loss)					(4,480)	(4,480)
Balance in the ending at Dec. 31, 2017	$ 515	$ 970,668	$ 60,795	$ (493,329)	$ (6,242)	$ 532,407

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
Gain (loss) on reissuance of treasury stock	$ 6,118	$ 4,396	$ 96
Shares repurchased (shares)		4,500,936	8,645,836
Cash dividends declared per share	$ 0.34	$ 0.22	$ 0.2

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 14,579	$ 23,060	$ 4,881
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses	12,972	23,651	12,444
Depreciation and amortization	12,889	14,203	15,502
Current income tax receivable	1,260	4,176	(7,328)
Deferred income taxes	17,180	(176)	(4,241)
Net excess tax (benefit) deficit on stock-based compensation	(4,225)	(2,078)	3,677
Discount accretion, net of premium amortization	2,581	3,067	4,124
Loan Accretion	(23,933)	(35,073)	(50,687)
Gain on sale of mortgage loans, net	(2,154)	(2,881)	(1,963)
Origination of loans held for sale, net of repayments	(85,959)	(114,397)	(99,246)
Proceeds from sales of loans held for sale	101,935	101,098	92,845
Bank-owned life insurance income	(1,871)	(1,861)	(1,614)
Amortization of indemnification asset			15,878
Gain on the sale of other real estate owned, net	(4,150)	(4,383)	(2,776)
Impairment on other real estate owned	766	298	1,580
Impairment on fixed assets related to banking center consolidations			1,411
Loss (gain) on sale of fixed assets	(2,853)	(1,981)	(28)
Bargain purchase gain			(1,048)
Stock-based compensation	3,648	3,492	3,349
Decrease in due to FDIC, net			(37,138)
(Increase) decrease in other assets	6,040	(4,721)	4,871
(Decrease) increase in other liabilities	9,434	(9,430)	7,879
Net cash provided by (used in) operating activities	58,139	(3,936)	(37,628)
Cash flows from investing activities:
Purchase of FHLB stock	(7,448)	(5,544)
Proceeds from redemption of FHLB stock	6,877	7,670	493
Proceeds from redemption of FRB stock		4,964	5,320
Proceeds from maturities of investment securities held-to-maturity	71,105	91,376	104,683
Proceeds from maturities of investment securities available-for-sale	224,336	275,448	314,271
Proceeds from sales of investment securities available-for-sale			29,747
Proceeds from maturities of non-marketable securities	490	490
Purchase of investment securities available-for-sale	(202,694)	(4,872)
Purchase of investment securities held-to-maturity			(6,225)
Net increase in loans	(314,008)	(270,585)	(334,798)
Sales (purchases) of premises and equipment, net	(5,617)	690	(5,081)
Purchase of bank-owned life insurance		(10,344)
Proceeds from sales of loans	38,087	9,231	17,204
Proceeds from sales of other real estate owned	10,355	16,105	15,566
Decrease (increase) in FDIC indemnification asset			18,331
Net cash activity from acquisitions			22,832
Net cash provided by (used in) investing activities	(178,517)	114,629	182,343
Cash flows from financing activities:
Net increase (decrease) in deposits	113,796	27,972	(55,654)
Increase (decrease) in repurchase agreements	38,452	(44,512)	2,971
Advances from FHLB	263,129	218,629
FHLB payoffs	(172,679)	(219,964)
Issuance of stock under purchase and equity compensation plans	(8,395)	(6,201)	(952)
Proceeds from exercise of stock options	104		160
Settlement of warrants			(368)
Payment of dividends	(9,401)	(6,400)	(6,711)
Repurchase of shares		(93,573)	(175,048)
Net cash proivded by (used in) financing activities	225,006	(124,049)	(235,602)
Increase (decrease) in cash and cash equivalents	104,628	(13,356)	(90,887)
Cash and cash equivalents at beginning of the year	152,736	166,092	256,979
Cash and cash equivalents at end of year	257,364	152,736	166,092
Supplemental disclosure of cash flow information during the period:
Cash paid for interest	17,312	14,154	13,751
Net tax (refunds) payments	127	2,193	(7,420)
Supplemental schedule of non-cash investing activities:
Loans transferred to other real estate owned at fair value	1,800	6,868	4,576
Loans purchased but not settled	25,118	(4,873)	(102)
Transfer of Loans Held-for-sale to Portfolio Loans	$ 5,736	$ 5,285	$ 218

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Basis of Presentation

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

NATIONAL BANK HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017, 2016 and 2015

Note 1 Basis of Presentation

National Bank Holdings Corporation ("NBHC" or the "Company") is a bank holding company that was incorporated in the State of Delaware in 2009 with the intent to acquire and operate financial services franchises and other complementary businesses in targeted markets. The Company is headquartered immediately south of Denver, in Greenwood Village, Colorado, and its primary operations are conducted through its wholly owned subsidiary, NBH Bank, (the "Bank"), a Colorado state-chartered bank and a member of the Federal Reserve System. The Company provides a variety of banking products to both commercial and consumer clients through a network of 85 banking centers as of December 31, 2017, located in Colorado and the greater Kansas City region, and through online and mobile banking products and services.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, NBH Bank. The accompanying consolidated financial statements have been prepared in accordance with GAAP and where applicable, with general practices in the banking industry or guidelines prescribed by bank regulatory agencies. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results presented. All such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications of prior years' amounts are made whenever necessary to conform to current period presentation. All amounts are in thousands, except share data, or as otherwise noted.

The Company's significant accounting policies followed in the preparation of the consolidated financial statements are disclosed in note 2. GAAP requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. By their nature, estimates are based on judgment and available information. Management has made significant estimates in certain areas, such as the amount and timing of expected cash flows from assets, the valuation of OREO, the fair value adjustments on assets acquired and liabilities assumed, the valuation of core deposit intangible assets, the valuation of investment securities for other-than-temporary impairment (“OTTI”), the valuation of stock-based compensation, the fair values of financial instruments, the ALL, and contingent liabilities. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 Summary of Significant Accounting Policies

a) Acquisition activities—The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets acquired exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. Fair values are subject to refinement for up to a maximum of one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Adjustments recorded to the acquired assets and liabilities assumed are applied prospectively in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss; therefore, the related ALL is not carried forward at the time of acquisition.

Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). Deposit liabilities and the related depositor relationship intangible assets, known as the core deposit intangible assets, may be exchanged in observable exchange transactions. As a result, the core deposit intangible asset is considered identifiable, because the separability criterion has been met.

b) Cash and cash equivalents—Cash and cash equivalents include cash, cash items, amounts due from other banks, amounts due from the Federal Reserve Bank of Kansas City, federal funds sold, and interest-bearing bank deposits and segregated cash held for the acquisition of Peoples, Inc. Refer to note 24 – Subsequent Events of our consolidated financial statements for additional details related to the acquisition.

c) Investment securities—Investment securities may be classified in three categories: trading, available-for-sale or held-to-maturity. Management determines the appropriate classification at the time of purchase and reevaluates the classification at each reporting period. Any sales of available-for-sale securities are for the purpose of executing the Company’s asset/liability management strategy, reducing borrowings, funding loan growth, providing liquidity, or eliminating a perceived credit risk in a specific security. Held-to-maturity securities are carried at amortized cost and the available-for-sale securities are carried at estimated fair value. Unrealized gains or losses on securities available-for-sale are reported as accumulated other comprehensive income (loss) (“AOCI”), a component of shareholders’ equity, net of income tax. Gains and losses realized upon sales of securities are calculated using the specific identification method. Premiums and discounts are amortized to interest income over the estimated lives of the securities. Prepayment experience is periodically evaluated and a determination made regarding the appropriate estimate of the future rates of prepayment. When a change in a bond’s estimated remaining life is necessary, a corresponding adjustment is made in the related premium amortization or discount accretion. Purchases and sales of securities, including any corresponding gains or losses, are recognized on a trade-date basis and a receivable or payable is recognized for pending transaction settlements.

Management evaluates all investments for OTTI on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Impairment is considered to be other-than-temporary if it is likely that all amounts contractually due will not be received for debt securities and when there is no positive evidence indicating that an investment’s carrying amount is recoverable in the near term for equity securities. When impairment is considered other-than-temporary, the cost basis of the security is written down to fair value, with the impairment charge related to credit included in earnings, while the impairment charge related to all other factors is recognized in OCI. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the entire amount of the OTTI is recorded in earnings. In evaluating whether the impairment is temporary or other than temporary, the Company considers, among other things, the severity and duration of the unrealized loss position; adverse conditions specifically related to the security; changes in expected future cash flows; downgrades in the rating of the security by a rating agency; the failure of the issuer to make scheduled interest or principal payments; whether the Company has the intent to sell the security; and whether it is more likely than not that the Company will be required to sell the security.

d) Non-marketable securities—Non-marketable securities include Federal Reserve Bank ("FRB") stock and Federal Home Loan Bank ("FHLB") stock. These securities have been acquired for debt facility or regulatory purposes and are carried at cost.

e) Loans receivable—Loans receivable include loans originated by the Company and loans that are acquired through acquisitions. Loans originated by the Company are carried at the principal amount outstanding, net of premiums, discounts, unearned income, and deferred loan fees and costs. Loan fees and certain costs of originating loans are deferred and the net amount is amortized over the contractual life of the related loans. Acquired loans are initially recorded at fair value and are accounted for under either ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (see additional information below) or ASC Topic 310, Receivables. Non-refundable loan origination and commitment fees, net of direct costs of originating or acquiring loans, and fair value adjustments for acquired loans, are deferred and recognized over the remaining lives of the related loans in accordance with ASC 310-20.

Acquired loans are recorded at their estimated fair value at the time of acquisition and accounted for under either ASC 310-30 or ASC 310. Estimated fair values of acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, the expected timing of cash flows, classification status, fixed or variable interest rate, term of loan and whether or not the loan is amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Acquired 310-30 loans are grouped together according to similar characteristics such as type of loan, loan purpose, geography, risk rating and underlying collateral and are treated as distinct pools when applying various valuation techniques and, in certain circumstances, for the ongoing monitoring of the credit quality and performance of the pools. Each pool is accounted for as a single loan for which the integrity is maintained throughout the life of the asset. Discounts created when the loans are recorded at their estimated fair values at acquisition are accreted over the remaining term of the loan as an adjustment to the related loan’s yield. Similar to originated loans described below, the accrual of interest income on acquired loans that are not accounted for under ASC 310-30 is discontinued when the collection of principal or interest, in whole or in part, is doubtful.

Interest income on acquired loans that are accounted for under ASC Topic 310 and interest income on loans originated by the Company is accrued and credited to income as it is earned using the interest method based on daily balances of the principal amount outstanding. However, interest is generally not accrued on loans 90 days or more past due, unless they are well secured and in the process of collection. Additionally, in certain situations, loans that are not contractually past due may be placed on non-accrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors, such as insufficient collateral value or deficient primary and secondary sources of repayment. Accrued interest receivable is reversed when a loan is placed on non-accrual status and payments received generally reduce the carrying value of the loan. Interest is not accrued while a loan is on non-accrual status and interest income is generally recognized on a cash basis only after payment in full of the past due principal and collection of principal outstanding is reasonably assured. A loan may be placed back on accrual status if all contractual payments have been received, or sooner under certain conditions and collection of future principal and interest payments is no longer doubtful.

In the event of borrower default, the Company may seek recovery in compliance with state lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying or restructuring a loan from its original terms, for economic or legal reasons, to provide a concession to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Such restructured loans are considered “troubled debt restructurings” and are identified in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Under this guidance, modifications to loans that fall within the scope of ASC 310-30 are not considered troubled debt restructurings, regardless of otherwise meeting the definition of a troubled debt restructuring.

Loans receivable accounted for under ASC 310-30

The Company accounts for and evaluates acquired loans in accordance with the provisions of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. When loans exhibit evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all principal and interest payments in accordance with the terms of the loan agreement, the expected shortfall in future cash flows, as compared to the contractual amount due, is recognized as a non-accretable difference. Any excess of expected cash flows over the acquisition date fair value is known as the accretable yield, and is recognized as accretion income over the life of each pool. Contractual fees not expected to be collected are not included in ASC 310-30 contractual cash flows. Should fees be subsequently collected, the cash flows are accounted for as non 310-30 fee income in the period they are received. Loans that are accounted for under ASC 310-30 that meet the criteria for non-accrual of interest or are accounted for on the cost recovery method at the time of acquisition or subsequent to acquisition, may be considered performing, regardless of whether the client is contractually delinquent, if thetiming and expected cash flows on the loan pool in which the loan is included can be otherwise reasonably estimated and if collection of the new carrying value of such pool is expected.

The expected cash flows of individual loans accounted for under ASC 310-30 are periodically remeasured utilizing the same cash flow methodology used at the time of acquisition and subsequent decreases to the expected cash flows will generally result in a provision for loan losses charge in the Company’s consolidated statements of operations. Any increases to the loan cash flow projections are recognized within the loan’s respective loan pools on a prospective basis through an increase to the pool’s accretion income over its remaining life once any previously recorded provision expense has been reversed. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

f) Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The Company estimates fair value based on quoted market prices for similar loans in the secondary market. Gains or losses are recognized upon sale and are included as a component of gain on sale of mortgages, net in the consolidated statements of operations. Loans held for sale have primarily been fixed rate single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within 45 days. These loans are generally sold with the mortgage servicing rights released. Under limited circumstances, buyers may have recourse to return a purchased loan to the Company. Recourse conditions may include early payoff, early payment default, breach of representations or warranties, or documentation deficiencies.

The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both "best efforts" and "mandatory delivery" forward loan sale commitments to mitigate the risk of potential increases or decreases in the values of loans that would result from the change in market rates for such loans. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities. They are carried on the consolidated statements of financial condition within other assets or other liabilities and changes in fair value are recorded as a component of gain on sale of mortgages, net in the consolidated statements of operations. The gross gains on loan sales are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

g) Allowance for loan losses—The allowance for loan losses represents management’s estimate of probable credit losses inherent in loans, including acquired loans to the extent necessary, as of the balance sheet date. The determination of the ALL takes into consideration, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan losses, the estimated loss emergence period, estimated default rates, any declines in cash flow assumptions from acquisition, loan structures, growth factors and other elements that warrant recognition. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the ALL. Such agencies may require the Company to recognize additions to the ALL or increases to adversely graded classified loans based on their judgments about information available to them at the time of their examinations.

The Company uses an internal risk rating system to indicate credit quality in the loan portfolio. The risk rating system is applied to all loans and uses a series of grades, which reflect management’s assessment of the risk attributable to loans based on an analysis of the borrower’s financial condition and ability to meet contractual debt service requirements. Loans that management perceives to have acceptable risk are categorized as “Pass” loans. The “Special Mention” loans represent loans that have potential credit weaknesses that deserve management’s close attention. Special mention loans include borrowers that have potential weaknesses or unwarranted risks that, unless corrected, may threaten the borrower’s ability to meet debt requirements. However, these borrowers are still believed to have the ability to respond to and resolve the financial issues that threaten their financial situation. Loans classified as “Substandard” are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. “Doubtful” loans are loans that management believes the collection of payments in accordance with the terms of the loan agreement is highly questionable and improbable. Loans accounted for under ASC 310-30, despite being 90 days or more past due or internally adversely classified, may be classified as performing upon and subsequent to acquisition, regardless of whether the client is contractually delinquent, if the timing and expected cash flows on the loan pool can be reasonably estimated and if collection of the carrying value of the loan pool loans is reasonably expected. Interest accrual is discontinued on doubtful loans and certain substandard loans that are excluded from ASC 310-30, as is more fully discussed in note 7.

The Company routinely evaluates adversely risk-rated credits for impairment. Impairment, if any, is typically measured for each loan based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flows, the loan’s estimated fair value, or the estimated fair value of the underlying collateral less costs of disposition for collateral dependent loans. General allowances are established for loans with similar characteristics. In this process, general allowance factors are based on an analysis of historical loss and recovery experience, if any, related to originated and acquired loans, as well as certain industry experience, with adjustments made for qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical experience. To the extent that the data supporting such factors has limitations, management’s judgment and experience play a key role in determining the allowance estimates.

Additions to the ALL are made by provisions for loan losses that are charged to operations. The allowance is decreased by charge-offs due to losses and is increased by provisions for loan losses and recoveries. When it is determined that specific loans, or portions thereof, are uncollectible, these amounts are charged off against the ALL. If repayment of the loan is collateral dependent, the fair value of the collateral, less cost to sell, is used to determine charge-off amounts.

The Company maintains an ALL for loans accounted for under ASC 310-30 as a result of impairment to loan pools arising from the periodic re-measurement of these loans. Any impairment in the individual pool is generally recognized in the current period as provision for loan losses. Any improvement in the estimated cash flows, is generally not recognized immediately, but is instead reflected as an adjustment to the related loan pools yield on a prospective basis once any previously recorded impairment has been recaptured.

h) Premises and equipment—With the exception of premises and equipment acquired through business combinations, which are initially measured and recorded at fair value, purchased land is stated at cost, and buildings and equipment are carried at cost, including capitalized interest when appropriate, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. The Company generally assigns depreciable lives of 39 years for buildings, 7 to 15 years for building improvements, and 3 to 7 years for equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or remaining lease terms. Maintenance and repairs are charged to non-interest expense as incurred. The Company reviews premises and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposal is less than its carrying amount. In the case of a property that is subject to an operating lease that the Company no longer expects to use, a liability is recorded at the cease-use date equal to the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property, even if the entity does not intend to enter into a sublease. A ratable portion of the sublease allocation is then expensed until the property is subleased. Property and equipment that meet the held-for-sale criteria is recorded at the lower of its carrying amount or fair value less cost to sell and depreciation is ceased.

i) Goodwill and intangible assets—Goodwill is established and recorded if the consideration given during an acquisition transaction exceeds the fair value of the net assets received. Goodwill has an indefinite useful life and is not amortized, but is evaluated annually for potential impairment, or when events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Such events or circumstances may include deterioration in general economic conditions, deterioration in industry or market conditions, an increased competitive environment, a decline in market-dependent multiples or metrics, declining financial performance, entity-specific events or circumstances or a sustained decrease in share price (either in absolute terms or relative to peers). If the Company determines, based upon the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount no additional procedures are performed; however, if the Company determines that it is more likely than not that the fair value of the reporting unit is less than the carrying amount the Company will compare the fair value of the reporting unit to its carrying amount. Any excess of the carrying amount over fair value would indicate a potential impairment and the Company would proceed to perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment.

Intangible assets that have finite useful lives, such as core deposit intangibles, are amortized over their estimated useful lives. The Company’s core deposit intangible assets represent the value of the anticipated future cost savings that will result from the acquired core deposit relationships versus an alternative source of funding.

Judgment may be used in assessing goodwill and intangible assets for impairment. Estimates of fair value are based on projections of revenues, operating costs and cash flows of the reporting unit considering historical and anticipated future results, general economic and market conditions, as well as the impact of planned business or operational strategies. The valuations use a combination of present value techniques to measure fair value considering market factors. Additionally, judgment is used in determining the useful lives of finite-lived intangible assets. Adverse changes in the economic environment, operations of the reporting unit, or changes in judgments and projections could result in a significantly different estimate of the fair value of the reporting unit and could result in an impairment of goodwill and/or intangible assets.

j) Other real estate owned—OREO consists of property that has been foreclosed on or repossessed by deed in lieu of foreclosure. The assets are initially recorded at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ALL. Subsequent downward valuation adjustments, if any, in addition to gains and losses realized on sales and net operating expenses, are recorded in non-interest expense, while any subsequent write-ups are recorded in non-interest income. Costs associated with maintaining property, such as utilities and maintenance, are charged to expense in the period in which they occur, while costs relating to the development and improvement of property are capitalized to the extent the balance does not exceed fair value. All OREO acquired through acquisition is recorded at fair value, less cost to sell, at the date of acquisition.

k) Bank-owned life insurance—The Company purchased or acquired bank-owned life insurance ("BOLI") policies on certain associates of the Company. The Company is the owner and beneficiary of these policies. The BOLI is carried at net realizable value with changes in net realizable value recorded in non-interest income.

l) Securities purchased under agreements to resell and securities sold under agreements to repurchase—The Company periodically enters into purchases or sales of securities under agreements to resell or repurchase as of a specified future date. The securities purchased under agreements to resell are accounted for as collateralized financing transactions and are reflected as an asset in the consolidated statements of financial condition. The securities pledged by the counterparties are held by a third party custodian and valued daily. The Company may require additional collateral to ensure full collateralization for these transactions. The repurchase agreements are considered financing agreements and the obligation to repurchase assets sold is reflected as a liability in the consolidated statements of financial condition of the Company. The repurchase agreements are collateralized by debt securities that are under the control of the Company.

m) Stock-based compensation—The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation as amended by ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. The Company grants stock-based awards including stock options, restricted stock and performance stock units. Stock option grants are for a fixed number of common shares and are issued at exercise prices which are not less than the fair value of a share of stock at the date of grant. The options vest over a time period stated in each option agreement and may be subject to other performance vesting conditions, which require the related compensation expense to be recorded ratably over the requisite service period starting when such conditions become probable. Restricted stock is granted for a fixed number of shares, the transferability of which is restricted until such shares become vested according to the terms in the award agreement. Restricted shares may have multiple vesting qualifications, which can include time vesting of a set portion of the restricted shares and performance criterion, such as market criteria that are tied to specified market conditions of the Company’s common stock price and performance targets tied to the Company’s earnings per share.

The fair value of stock options is measured using a Black-Scholes model. The fair value of time-based restricted stock awards and performance stock units with performance based vesting criteria is based on the Company’s stock price on the date of grant. The fair value of performance stock units with market based vesting criteria is measured using a Monte Carlo simulation model. Compensation expense for the portion of the awards that contain performance and service vesting conditions is recognized over the requisite service period based on the fair value of the awards on the grant date. Compensation expense for the portion of the awards that contain a market vesting condition is recognized over the derived service period based on the fair value of the awards on the grant date. The amortization of stock-based compensation reflects any estimated forfeitures, and the expense realized in subsequent periods may be adjusted to reflect the actual forfeitures realized. The outstanding stock options primarily carry a maximum contractual term of ten years. To the extent that any award is forfeited, surrendered, terminated, expires, or lapses without being vested or exercised, the shares of stock subject to such award not delivered as a result thereof are again made available for awards under the Plan.

The Company accounts for all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized in the consolidated statements of operations as a component of income tax expense or benefit and are classified as an operating activity within the Company’s consolidated statements of cash flows. The tax effects of exercised, expired or vested awards are treated as discrete items in the reporting period in which they occur and may result in increased volatility in our effective tax rate. Cash paid by the Company when directly withholding shares for tax withholding purposes is classified as a financing activity in the consolidated statements of cash flows.

Prior to the Company’s adoption of ASU 2016-09 during 2016, excess tax benefits were recognized in additional paid-in capital and tax deficiencies were recognized either as an offset to accumulated excess tax benefits, if any, or in the consolidated statements of operations. Excess tax benefits were not recognized until the deduction reduced taxes payable.

n) Warrants—The Company issued warrants to certain lead investors in 2009 and 2010. During 2015, the outstanding warrant contracts were modified and recorded at fair value as of the modification date using a Black-Scholes model with the change in fair value reported in the statement of operations as non-interest expense. The awards were classified as equity in the Company’s consolidated statements of financial condition. Prior to the modification, the exercise price and the number of warrants were subject to certain down-round provisions, whereby certain subsequent equity issuances at a price below the existing exercise price would result in a downward adjustment to the exercise price and an increase in the number of warrants, and as a result, the warrants were historically classified as a liability in the Company’s consolidated statements of financial condition with changes in the fair value each period reported in the statements of operations as non-interest expense.

During the first quarter of 2017, the remaining issued warrants were exercised in a non-cash transaction. Refer to the consolidated statements of changes in shareholders’ equity for additional details. 

o) Income taxes—The Company and its subsidiaries file U.S. federal and certain state income tax returns on a consolidated basis. Additionally, the Company and its subsidiaries file separate state income tax returns with various state jurisdictions. The provision for income taxes includes the income tax balances of the Company and all of its subsidiaries.

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Deferred tax assets and liabilities are adjusted for the effects of changes in tax rates in the period of change. The Company establishes a valuation allowance when management believes, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized.

The Company recognizes and measures income tax benefits based upon a two-step model: 1) a tax position must be more likely than not to be sustained based solely on its technical merits in order to be recognized; and 2) the benefit is measured as the largest dollar amount of that position that is more likely than not to be sustained upon settlement. The difference between the benefit recognized for a position in this model and the tax benefit claimed on a tax return is treated as an unrecognized tax benefit. The Company recognizes income tax related interest and penalties in other non-interest expense.

p) Income per share—The Company applies the two-class method of computing income per share as certain of the Company's restricted shares are entitled to non-forfeitable dividends and are therefore considered to be a class of participating securities. The two-class method allocates income according to dividends declared and participation rights in undistributed income. Basic income per share is computed by dividing income allocated to common shareholders by the weighted average number of common shares outstanding during each period. Diluted income per common share is computed by dividing income allocated to common shareholders by the weighted average common shares outstanding during the period, plus amounts representing the dilutive effect of stock options outstanding, certain unvested restricted shares, warrants to issue common stock, or other contracts to issue common shares (“common stock equivalents”) using the treasury stock method. Common stock equivalents are excluded from the computation of diluted earnings per common share in periods in which they have an anti-dilutive effect.

q) Interest Rate Swap Derivatives—The Company carries all derivatives on the statement of financial condition at fair value. All derivative instruments are recognized as either assets or liabilities depending on the rights or obligations under the contracts. All gains and losses on the derivatives due to changes in fair value are recognized in earnings each period.

The Company offers interest rate swap products to certain of its clients to manage potential changes in interest rates. Each contract between the Company and a client is offset with a contract between the Company and an institutional counterparty, thus minimizing the Company's exposure to rate changes. The Company's portfolio consists of a “matched book,” and as such, changes in fair value of the swap pairs will largely offset in earnings. In accordance with applicable accounting guidance, if certain conditions are met, a derivative may be designated as (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability, or of an unrecognized firm commitment, that are attributable to a particular risk (referred to as a fair value hedge) or (2) a hedge of the exposure to variability in the cash flows of a recognized asset or liability, or of a forecasted transaction, that is attributable to a particular risk (referred to as a cash flow hedge). The Company documents all hedging relationships at the inception of each hedging relationship and uses industry accepted methodologies and ranges to determine the effectiveness of each hedge. The fair value of the hedged item is calculated using the estimated future cash flows of the hedged item and applying discount rates equal to the market interest rate for the hedged item at the inception of the hedging relationship (inception benchmark interest rate plus an inception credit spread), adjusted for changes in the designated benchmark interest rate thereafter.

r) Treasury stock —When the Company acquires treasury stock, the sum of the consideration paid and direct transaction costs after tax is recognized as a deduction from equity. The cost basis for the reissuance of treasury stock is determined using a first-in, first-out basis. To the extent that the reissuance price is more than the cost basis (gain), the excess is recorded as an increase to additional paid-in capital in the consolidated statements of financial condition. If the reissuance price is less than the cost basis (loss), the difference is recorded to additional paid-in capital to the extent there is a cumulative treasury stock paid-in capital balance. Any loss in excess of the cumulative treasury stock paid-in capital balance is charged to retained earnings.

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Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

Recent Accounting Pronouncements

Note 3 Recent Accounting Pronouncements

Revenue from Contracts with Customers—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This update supersedes revenue recognition requirements in ASC Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification. The new guidance stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides specific steps that entities should apply in order to achieve this principle. The amendments are effective for interim and annual periods beginning after December 15, 2017, with early application permitted for interim and annual periods beginning after December 15, 2016. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption.

The new guidance does not apply to revenue associated with financial assets and liabilities including loans, leases, securities, and derivatives that are accounted for under other GAAP. Accordingly, the majority of the Company’s revenues will not be affected. The Company has completed its review of revenue streams and contracts with customers and has determined certain service charges, bank card fees and real estate sales are within the scope of the ASU, but has not identified changes to the timing or amount of revenue recognition. The Company adopted ASU No. 2014-09 on January 1, 2018 utilizing the modified retrospective approach. Accounting policies and procedures did not change materially since the principals of revenue recognition from the ASU are largely consistent with existing guidance and current practices applied by the Company. The Company continues to assess the expanded revenue disclosure requirements under the new standard.

Leases—In February 2016, the FASB issued ASU 2016-02, Leases. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statements. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the amendments in the update is permitted. The Company expects to adopt ASU 2016-02 in the first quarter of 2019 and is currently in the process of evaluating the impact of the ASU's adoption on the Company's consolidated financial statements.  

Financial Instruments - Credit Losses—In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This update replaces the current incurred loss methodology for recognizing credit losses with a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This amendment broadens the information that an entity must consider in developing its expected credit loss estimates. Additionally, the update amends the accounting for credit losses for available-for-sale debt securities and purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. This update requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s loan portfolio. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption in fiscal years beginning after December 15, 2018 is permitted. The amendment requires the use of the modified retrospective approach for adoption. The Company is in the process of evaluating the impact of the ASU’s adoption on the Company’s consolidated financial statements.

Statement of Cash Flows – Restricted Cash—In November 2016, the FASB issued ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), whichaddresses classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires an entity’s reconciliation of the beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include in cash and cash equivalents amounts general described as restricted cash and restricted cash equivalents. The ASU does not define restricted cash or restricted cash equivalents, but an entity will need to disclose the nature of the restrictions. The ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Entities should apply this ASU using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 on January 1, 2018 with no material impact to the consolidated financial statements. 

Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities—In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted, including in an interim period. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated statements of financial condition as of the date of adoption. The Company is in the process of evaluating the impact of the ASU’s adoption on the Company’s consolidated financial statements; however, the impact is not expected to be material. 

Reclassification of Certain Tax Effects—In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments eliminate the stranded tax effects that were created as a result of the reduction of historical U.S. federal corporate income tax rate to the newly enacted U.S. federal corporate income tax rate. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company early adopted ASU 2018-02 in the first quarter of 2018, resulting in a $1.5 million reclassification from accumulated other comprehensive income to retained earnings on the consolidated statement of financial condition and the consolidated statement of changes in shareholders’ equity.

The Company reviewed ASU 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825), ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments and ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment and ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) and does not expect the adoption of these pronouncements to have a material impact on its financial statements.

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Investment Securities

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 4 Investment Securities

The Company’s investment securities portfolio is comprised of available-for-sale and held-to-maturity investment securities. These investment securities totaled $1.1 billion at December 31, 2017 and included $0.8 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities. At December 31, 2016, investment securities totaled $1.2 billion and included $0.9 billion of available-for-sale securities and $0.3 billion of held-to-maturity securities.

Available-for-sale

At December 31, 2017 and 2016, the Company held $855.3 million and $884.2 million of available-for-sale investment securities, respectively. Available-for-sale securities are summarized as follows as of the dates indicated:

	December 31, 2017
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	167,269	$	2,371	$	(992)	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		702,107		351		(17,228)		685,230
Municipal securities		1,054		—		(6)		1,048
Other securities		419		—		—		419
Total investment securities available-for-sale	$	870,849	$	2,722	$	(18,226)	$	855,345

	December 31, 2016
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	223,781	$	3,909	$	(530)	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		666,616		2,124		(16,001)		652,739
Municipal securities		3,921		—		(7)		3,914
Other securities		419		—		—		419
Total investment securities available-for-sale	$	894,737	$	6,033	$	(16,538)	$	884,232

At December 31, 2017 and 2016, mortgage-backed securities represented primarily all of the Company’s available-for-sale investment portfolio and all mortgage-backed securities were backed by government sponsored enterprises (“GSE”) collateral such as Federal Home Loan Mortgage Corporation (“FHLMC”) and Federal National Mortgage Association (“FNMA”), and the government sponsored agency Government National Mortgage Association (“GNMA”).

The tables below summarize the available-for-sale securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	62,178	$	(408)	$	36,086	$	(584)	$	98,264	$	(992)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		162,346		(830)		412,967		(16,398)		575,313		(17,228)
Municipal securities		514		(6)		—		—		514		(6)
Total	$	225,038	$	(1,244)	$	449,053	$	(16,982)	$	674,091	$	(18,226)

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	100,898	$	(530)	$	—	$	—	$	100,898	$	(530)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		137,576		(2,976)		385,707		(13,025)		523,283		(16,001)
Municipal securities		3,058		(7)		—		—		3,058		(7)
Total	$	241,532	$	(3,513)	$	385,707	$	(13,025)	$	627,239	$	(16,538)

The unrealized losses in the Company’s investments portfolio at December 31, 2017 were caused by changes in interest rates. The portfolio included 87 securities, having an aggregate fair value of $674.1 million, which were in an unrealized loss position at December 31, 2017. During the twelve months ended December 31, 2017, the Company recorded $0.2 million of other-than-temporary impairment (OTTI) included in other non-interest expense on the consolidated statements of operations. The OTTI charge was on a single municipal security, with an aggregated fair value of $0.3 million at December 31, 2017.

The unrealized losses in the Company’s investment portfolio at December 31, 2016 were caused by changes in interest rates. The portfolio included 61 securities, with an aggregate fair value of $627.2 million, which were in an unrealized loss position at December 31, 2016.

Management evaluated all of the available-for-sale securities in an unrealized loss position and concluded no OTTI existed at December 31, 2017 and 2016. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

Certain securities are pledged as collateral for public deposits, securities sold under agreements to repurchase and to secure borrowing capacity at the Federal Reserve Bank, and Federal Home Loan Bank (“FHLB”), if needed. The fair value of available-for-sale investment securities pledged as collateral totaled $334.6 million and $373.7 million at December 31, 2017 and 2016, respectively. Certain investment securities may also be pledged as collateral for the line of credit at the FHLB; at December 31, 2017 or December 31, 2016, no securities were pledged for this purpose.

Mortgage-backed securities do not have a single maturity date and actual maturities may differ from contractual maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average life of the available-for-sale mortgage-backed securities portfolio was 3.4 years and 3.4 years at December 31, 2017 and 2016, respectively. This estimate is based on assumptions and actual results may differ. At December 31, 2017 and 2016, the duration of the total available-for-sale investment portfolio was 3.1 years and 3.2 years, respectively.

As of December 31, 2017, municipal securities with an amortized cost and fair value of $0.3 million were due in one year, municipal securities with an amortized cost and fair value of $0.2 million were due after one year through five years, while municipal securities with an amortized cost and fair value of $0.5 million were due after five years through ten years. Other securities of $0.4 million as of December 31, 2017, have no stated contractual maturity date.

Held-to-maturity

At December 31, 2017 and 2016, the Company held $258.7 million and $332.5 million of held-to-maturity investment securities, respectively. Held-to-maturity investment securities are summarized as follows as of the dates indicated:

	December 31, 2017
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	204,352	$	151	$	(455)	$	204,048
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		54,378		—		(1,655)		52,723
Total investment securities held-to-maturity	$	258,730	$	151	$	(2,110)	$	256,771

	December 31, 2016
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	263,411	$	1,685	$	(234)	$	264,862
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		69,094		16		(1,399)		67,711
Total investment securities held-to-maturity	$	332,505	$	1,701	$	(1,633)	$	332,573

The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	149,182	$	(220)	$	17,506	$	(235)	$	166,688	$	(455)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		6,460		(65)		46,264		(1,590)		52,724		(1,655)
Total	$	155,642	$	(285)	$	63,770	$	(1,825)	$	219,412	$	(2,110)

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	27,799	$	(234)	$	—	$	—	$	27,799	$	(234)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		26,992		(357)		32,146		(1,042)		59,138		(1,399)
Total	$	54,791	$	(591)	$	32,146	$	(1,042)	$	86,937	$	(1,633)

The held-to-maturity portfolio included 36 securities, having an aggregate fair value of $219.4 million, which were in an unrealized loss position at December 31, 2017, compared to 15 securities, with a fair value of $86.9 million, at December 31, 2016.

Management evaluated all of the held-to-maturity securities in an unrealized loss position and concluded that no OTTI existed at December 31, 2017 or December 31, 2016. The unrealized losses in the Company's investments at December 31, 2017, were caused by changes in interest rates. The Company has no intention to sell these securities before recovery of their amortized cost and believes it will not be required to sell the securities before the recovery of their amortized cost.

The carrying value of held-to-maturity investment securities pledged as collateral totaled $142.0 million and $119.2 million at December 31, 2017 and 2016, respectively.

Actual maturities of mortgage-backed securities may differ from scheduled maturities depending on the repayment characteristics and experience of the underlying financial instruments. The estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio as of December 31, 2017 and 2016 was 3.1 years and 3.5 years, respectively. This estimate is based on assumptions and actual results may differ. The duration of the total held-to-maturity investment portfolio was 2.8 years and 3.2 years as of December 31, 2017 and 2016, respectively.

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Non-marketable Securities

12 Months Ended

Dec. 31, 2017

Disclosure Non Marketable Securities Narrative [Abstract]

Non-marketable Securities

Note 5 Non-marketable Securities

Non-marketable securities include Federal Reserve Bank stock and FHLB stock. At December 31, 2017, the Company held $9.2 million of Federal Reserve Bank stock and $5.8 million of FHLB stock for regulatory or debt facility purposes. At December 31, 2016, the Company held $9.2 million of Federal Reserve Bank stock, $5.2 million of FHLB stock and $0.5 million of non-negotiable certificates of deposit acquired from the Pine River acquisition.

These are restricted securities which, lacking a market, are carried at cost. There have been no identified events or changes in circumstances that may have an adverse effect on the investments carried at cost. Management evaluated all of the non-marketable securities and concluded that no OTTI existed at December 31, 2017 or December 31, 2016.

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Loans

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loans

Note 6 Loans

The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.

The tables below show the loan portfolio composition including carrying value by segment of loans accounted for under ASC 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality, and loans not accounted for under this guidance, which includes our originated loans, as of the dates shown.  The carrying value of loans is net of discounts on loans excluded from ASC 310-30, and fees and costs of $4.3 million and $6.3 million at December 31, 2017 and 2016, respectively. At December 31, 2016, $14.4 million of non 310-30 loans were held-for-sale, most of which were in the residential real estate segment. The sale of these loans was completed in connection with the four banking center divestitures in the second quarter of 2017.

	December 31, 2017
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	29,475	$	1,845,130	$	1,874,605	59.0%
Commercial real estate non-owner occupied		77,908		485,141		563,049	17.7%
Residential real estate		12,759		703,478		716,237	22.5%
Consumer		481		24,575		25,056	0.8%
Total	$	120,623	$	3,058,324	$	3,178,947	100.0%

	December 31, 2016
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	39,280	$	1,521,150	$	1,560,430	54.6%
Commercial real estate non-owner occupied		89,150		437,642		526,792	18.4%
Residential real estate		16,524		728,361		744,885	26.0%
Consumer		898		27,916		28,814	1.0%
Total	$	145,852	$	2,715,069	$	2,860,921	100.0%

Delinquency for loans excluded from ASC 310-30 is shown in the following tables at December 31, 2017 and 2016:

	December 31, 2017
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days  past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	554	$	117	$	1,389	$	2,060	$	1,373,962	$	1,376,022	$	150	$	7,767
Owner occupied commercial real estate		696		—		1,983		2,679		270,074		272,753		—		3,478
Agriculture		585		—		701		1,286		137,609		138,895		—		2,003
Energy		—		—		1,645		1,645		55,815		57,460		—		1,645
Total commercial		1,835		117		5,718		7,670		1,837,460		1,845,130		150		14,893
Commercial real estate non-owner occupied:
Construction		—		—		179		179		107,502		107,681		—		179
Acquisition/development		1,097		—		—		1,097		13,318		14,415		—		—
Multifamily		—		—		—		—		26,947		26,947		—		—
Non-owner occupied		56		—		574		630		335,468		336,098		—		605
Total commercial real estate		1,153		—		753		1,906		483,235		485,141		—		784
Residential real estate:
Senior lien		1,167		885		1,396		3,448		643,034		646,482		—		4,724
Junior lien		233		91		41		365		56,631		56,996		—		459
Total residential real estate		1,400		976		1,437		3,813		699,665		703,478		—		5,183
Consumer		157		6		5		168		24,407		24,575		—		140
Total loans excluded from ASC 310-30	$	4,545	$	1,099	$	7,913	$	13,557	$	3,044,767	$	3,058,324	$	150	$	21,000

	December 31, 2016
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	3,134	$	4,009	$	1,078	$	8,221	$	1,066,475	$	1,074,696	$	—	$	8,688
Owner occupied commercial real estate		583		216		56		855		220,689		221,544		—		2,056
Agriculture		501		—		—		501		134,136		134,637		—		1,905
Energy		2		—		6,548		6,550		83,723		90,273		—		12,645
Total commercial		4,220		4,225		7,682		16,127		1,505,023		1,521,150		—		25,294
Commercial real estate non-owner occupied:
Construction		—		—		—		—		90,314		90,314		—		—
Acquisition/development		—		—		—		—		13,306		13,306		—		—
Multifamily		—		—		—		—		24,954		24,954		—		—
Non-owner occupied		—		—		28		28		309,040		309,068		—		66
Total commercial real estate		—		—		28		28		437,614		437,642		—		66
Residential real estate:
Senior lien		888		645		1,458		2,991		672,699		675,690		—		4,522
Junior lien		115		61		22		198		52,473		52,671		—		654
Total residential real estate		1,003		706		1,480		3,189		725,172		728,361		—		5,176
Consumer		83		8		—		91		27,825		27,916		—		181
Total loans excluded from ASC 310-30	$	5,306	$	4,939	$	9,190	$	19,435	$	2,695,634	$	2,715,069	$	—	$	30,717

Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Pooled loans accounted for under ASC 310-30 that are 90 days or more past due and still accreting are generally considered to be performing and therefore are not included in the tables above. Non-accrual loans include troubled debt restructurings on non-accrual status.

Non-accrual loans excluded from the scope of ASC 310-30 totaled $21.0 million at December 31, 2017, representing a decrease of $9.7 million, or 31.6%, from December 31, 2016, due to charge-offs of two energy loans totaling $7.5 million and one commercial and industrial loan totaling $2.5 million. In addition, one previously identified energy loan of $2.2 million at December 31, 2017 was placed back on accrual during the third quarter of 2017. These decreases were partially offset by one commercial and industrial loan totaling $3.7 million placed on non-accrual during the fourth quarter of 2017.

Credit exposure for all loans as determined by the Company’s internal risk rating system was as follows at December 31, 2017 and 2016:

	December 31, 2017
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,349,116	$	10,829	$	14,824	$	1,253	$	1,376,022
Owner occupied commercial real estate		250,224		17,030		5,424		75		272,753
Agriculture		118,068		18,824		1,870		133		138,895
Energy		55,814		—		1,646		—		57,460
Total commercial		1,773,222		46,683		23,764		1,461		1,845,130
Commercial real estate non-owner occupied:
Construction		107,502		—		179		—		107,681
Acquisition/development		14,415		—		—		—		14,415
Multifamily		24,817		—		2,130		—		26,947
Non-owner occupied		333,225		1,396		1,477		—		336,098
Total commercial real estate		479,959		1,396		3,786		—		485,141
Residential real estate:
Senior lien		641,294		91		5,097		—		646,482
Junior lien		56,172		—		824		—		56,996
Total residential real estate		697,466		91		5,921		—		703,478
Consumer		24,432		1		142		—		24,575
Total loans excluded from ASC 310-30	$	2,975,079	$	48,171	$	33,613	$	1,461	$	3,058,324
Loans accounted for under ASC 310-30:
Commercial	$	23,954	$	1,070	$	4,451	$	—	$	29,475
Commercial real estate non-owner occupied		50,537		883		26,488		—		77,908
Residential real estate		10,072		1,055		1,632		—		12,759
Consumer		327		9		145		—		481
Total loans accounted for under ASC 310-30	$	84,890	$	3,017	$	32,716	$	—	$	120,623
Total loans	$	3,059,969	$	51,188	$	66,329	$	1,461	$	3,178,947

	December 31, 2016
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,041,326	$	7,243	$	25,636	$	491	$	1,074,696
Owner occupied commercial real estate		202,036		9,371		10,137		—		221,544
Agriculture		123,809		8,922		1,906		—		134,637
Energy		77,619		—		7,811		4,843		90,273
Total commercial		1,444,790		25,536		45,490		5,334		1,521,150
Commercial real estate non-owner occupied:
Construction		90,099		—		215		—		90,314
Acquisition/development		10,758		2,548		—		—		13,306
Multifamily		22,495		238		2,221		—		24,954
Non-owner occupied		300,922		5,895		2,251		—		309,068
Total commercial real estate		424,274		8,681		4,687		—		437,642
Residential real estate:
Senior lien		669,148		1,215		5,316		11		675,690
Junior lien		51,250		178		1,243		—		52,671
Total residential real estate		720,398		1,393		6,559		11		728,361
Consumer		27,669		59		188		—		27,916
Total loans excluded from ASC 310-30	$	2,617,131	$	35,669	$	56,924	$	5,345	$	2,715,069
Loans accounted for under ASC 310-30:
Commercial	$	27,436	$	610	$	11,234	$	—	$	39,280
Commercial real estate non-owner occupied		38,895		967		45,520		3,768		89,150
Residential real estate		12,477		1,327		2,720		—		16,524
Consumer		721		17		160		—		898
Total loans accounted for under ASC 310-30	$	79,529	$	2,921	$	59,634	$	3,768	$	145,852
Total loans	$	2,696,660	$	38,590	$	116,558	$	9,113	$	2,860,921

Non 310-30 special mention loans increased $12.5 million from December 31, 2016 due to upgrades from substandard and doubtful within the commercial and industrial sector and downgrades from pass within the commercial and industrial sector, partially offset by payoffs in the commercial and industrial and owner-occupied commercial real estate sectors. Non 310-30 substandard loans decreased $23.3 million from December 31, 2016 primarily due to paydowns and upgrades to special mention and pass within the commercial and industrial, owner-occupied commercial real estate and energy sectors. Non 310-30 doubtful loans decreased $3.9 million from December 31, 2016 due to energy loan charge-offs during the period.

Impaired Loans

Loans are considered to be impaired when it is probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan agreement. Impaired loans are comprised of loans excluded from ASC 310-30 on non-accrual status, loans in bankruptcy, and troubled debt restructurings (“TDRs”) described below. If a specific allowance is warranted based on the borrower’s overall financial condition, the specific allowance is calculated based on discounted cash flows using the loan’s initial contractual effective interest rate or the fair value of the collateral less selling costs for collateral dependent loans. At December 31, 2017, the Company measured $20.3 million of impaired loans based on the fair value of the collateral less selling costs and $2.3 million of impaired loans using discounted cash flows and the loan’s initial contractual effective interest rate.  Impaired loans totaling $8.3 million that individually were less than $250 thousand each, were measured through the general ALL reserves due to their relatively small size.

At December 31, 2017 and 2016, the Company’s recorded investment in impaired loans were $30.9 million and $38.3 million, respectively, of which $8.5 million and $5.8 million, respectively, were accruing TDRs. Impaired loans at December 31, 2017 were primarily comprised of seven relationships totaling $14.1 million. Four of the relationships were in the commercial and industrial sector totaling $9.0 million, two of the relationships were in the energy sector totaling $3.9 million and one relationship was in the agriculture sector totaling $1.2 million. Impaired loans had a collective related allowance for loan losses allocated to them of $1.5 million and $2.4 million at December 31, 2017 and 2016, respectively.

Additional information regarding impaired loans at December 31, 2017 and 2016 is set forth in the table below:

	December 31, 2017						December 31, 2016
					Allowance						Allowance
	Unpaid				for loan		Unpaid				for loan
	principal		Recorded		losses		principal		Recorded		losses
	balance		investment		allocated		balance		investment		allocated
With no related allowance recorded:
Commercial:
Commercial and industrial	$	6,481	$	5,055	$	—	$	8,671	$	7,495	$	—
Owner occupied commercial real estate		4,186		3,934		—		3,350		3,197		—
Agriculture		1,502		1,245		—		2,044		1,987		—
Energy		8,661		3,861		—		17,142		6,105		—
Total commercial		20,830		14,095		—		31,207		18,784		—
Commercial real estate non-owner occupied:
Construction		215		179		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		29		29		—		33		33		—
Non-owner occupied		901		853		—		394		343		—
Total commercial real estate		1,145		1,061		—		427		376		—
Residential real estate:
Senior lien		333		309		—		1,551		1,426		—
Junior lien		—		—		—		54		51		—
Total residential real estate		333		309		—		1,605		1,477		—
Consumer		—		—		—		4		4		—
Total impaired loans with no related allowance recorded	$	22,308	$	15,465	$	—	$	33,243	$	20,641	$	—
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,919	$	5,339	$	1,329	$	3,495	$	3,464	$	492
Owner occupied commercial real estate		873		713		4		957		642		2
Agriculture		2,122		2,083		133		—		—		—
Energy		—		—		—		11,216		6,548		1,866
Total commercial		10,914		8,135		1,466		15,668		10,654		2,360
Commercial real estate non-owner occupied:
Construction		—		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		207		200		1		261		255		1
Total commercial real estate		207		200		1		261		255		1
Residential real estate:
Senior lien		6,481		5,753		24		5,646		5,016		31
Junior lien		1,295		1,179		8		1,781		1,532		14
Total residential real estate		7,776		6,932		32		7,427		6,548		45
Consumer		146		141		1		188		184		2
Total impaired loans with a related allowance recorded	$	19,043	$	15,408	$	1,500	$	23,544	$	17,641	$	2,408
Total impaired loans	$	41,351	$	30,873	$	1,500	$	56,787	$	38,282	$	2,408

The table below shows additional information regarding the average recorded investment and interest income recognized on impaired loans for the periods presented:

	For the years ended
	December 31, 2017				December 31, 2016				December 31, 2015
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	5,609	$	152	$	7,909	$	252	$	5,049	$	266
Owner occupied commercial real estate		4,155		80		3,249		92		2,221		83
Agriculture		1,422		244		1,830		—		1,961		—
Energy		8,004		156		12,565		—		5,679		—
Total Commercial		19,190		632		25,553		344		14,910		349
Commercial real estate non-owner occupied:
Construction		—		—		—		—		188		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		878		22		368		22		157		—
Total commercial real estate		878		22		368		22		345		—
Residential real estate:
Senior lien		326		—		1,466		19		956		15
Junior lien		—		—		54		2		113		—
Total residential real estate		326		—		1,520		21		1,069		15
Consumer		—		—		4		—		—		—
Total impaired loans with no related allowance recorded	$	20,394	$	654	$	27,445	$	387	$	16,324	$	363
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,331	$	—	$	3,545	$	198	$	6,273	$	1
Owner occupied commercial real estate		747		20		703		20		1,230		27
Agriculture		2,092		5		162		5		276		4
Energy		—		—		10,008		—		3,092		—
Total Commercial		10,170		25		14,418		223		10,871		32
Commercial real estate non-owner occupied:
Construction		188		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		30		1		34		2		60		1
Non-owner occupied		213		9		268		13		1,667		48
Total commercial real estate		431		10		302		15		1,727		49
Residential real estate:
Senior lien		5,986		67		5,200		88		5,911		119
Junior lien		1,225		42		1,600		56		1,725		51
Total residential real estate		7,211		109		6,800		144		7,636		170
Consumer		163		—		196		—		92		1
Total impaired loans with a related allowance recorded	$	17,975	$	144	$	21,716	$	382	$	20,326	$	252
Total impaired loans	$	38,369	$	798	$	49,161	$	769	$	36,650	$	615

Interest income recognized on impaired loans noted in the table above, primarily represents interest earned on accruing troubled debt restructurings. Interest income recognized on impaired loans during the years ended December 31, 2017, 2016 and 2015 was $0.8 million, $0.8 million and $0.6 million, respectively. 

Troubled debt restructurings

The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include restructuring a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Additionally, if a borrower’s repayment obligation has been discharged by a court, and that debt has not been reaffirmed by the borrower, regardless of past due status, the loan is considered to be a TDR.

Non-accruing TDRs at December 31, 2017 and 2016 totaled $7.3 million and $16.7 million, respectively.

During 2017, the Company restructured eleven loans with a recorded investment of $2.1 million at December 31, 2017 to facilitate repayment. All of the loan modifications were a reduction of the principal payment, a reduction in interest rate, or an extension of term. Loan modifications to loans accounted for under ASC 310-30 are not considered TDRs. The tables below provide additional information related to accruing TDRs at December 31, 2017 and 2016:

	December 31, 2017
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	6,595	$	7,308	$	7,171	$	2,041
Commercial real estate non-owner occupied		455		489		500		—
Residential real estate		1,409		1,461		1,420		2
Consumer		1		3		1		—
Total	$	8,460	$	9,261	$	9,092	$	2,043

	December 31, 2016
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	3,302	$	3,440	$	3,464	$	100
Commercial real estate non-owner occupied		538		572		590		—
Residential real estate		1,920		1,996		1,969		2
Consumer		7		9		7		—
Total	$	5,767	$	6,017	$	6,030	$	102

The following table summarizes the Company’s carrying value of non-accrual TDRs as of December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Commercial	$	5,808	$	15,265
Commercial real estate non-owner occupied		—		—
Residential real estate		1,336		1,301
Consumer		111		142
Total non-accruing TDRs	$	7,255	$	16,708

At December 31, 2017 and 2016, the Company had $8.5 million and $5.8 million, respectively, of accruing TDRs that had been restructured from the original terms in order to facilitate repayment. Accrual of interest is resumed on loans that were on non-accrual only after the loan has performed sufficiently. The Company had three TDRs that were modified within the past twelve months and had defaulted on their restructured terms. The defaulted TDRs consisted of two commercial loans totaling $3.2 million, and one small residential loan. Non-accruing TDRs decreased $9.4 million from December 31, 2016 due to charge-offs within the commercial loan segment. The allowance for loan losses related to troubled debt restructurings on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as troubled debt restructurings.

During 2016, the Company had five TDRs that were modified within the past twelve months and had defaulted on their restructured terms. The defaulted TDRs consisted of two commercial loans totaling $6.4 million and three residential loans totaling $0.4 million. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due on principal or interest.

Loans accounted for under ASC 310-30

Loan pools accounted for under ASC Topic 310-30 are periodically re-measured to determine expected future cash flows. In determining the expected cash flows, the timing of cash flows and prepayment assumptions for smaller homogeneous loans are based on statistical models that take into account factors such as the loan interest rate, credit profile of the borrowers, the years in which the loans were originated, and whether the loans are fixed or variable rate loans. Prepayments may be assumed on loans if circumstances specific to that loan warrant a prepayment assumption. The re-measurement of loans accounted for under ASC 310-30 resulted in the following changes in the carrying amount of accretable yield during 2017 and 2016:

	December 31, 2017		December 31, 2016
Accretable yield beginning balance	$	60,476	$	84,194
Reclassification from non-accretable difference		11,398		14,316
Reclassification to non-accretable difference		(2,801)		(4,778)
Accretion		(22,505)		(33,256)
Accretable yield ending balance	$	46,568	$	60,476

Below is the composition of the net book value for loans accounted for under ASC 310-30 at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Contractual cash flows	$	489,892	$	537,611
Non-accretable difference		(322,701)		(331,283)
Accretable yield		(46,568)		(60,476)
Loans accounted for under ASC 310-30	$	120,623	$	145,852

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Allowance for Loan Losses

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Allowance for Loan Losses

Note 7 Allowance for Loan Losses

The tables below detail the Company’s allowance for loan losses and recorded investment in loans as of and for the years ended December 31, 2017 and 2016:

	Year ended December 31, 2017
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Non 310-30 beginning balance		18,821		5,422		4,387		319		28,949
Charge-offs		(10,342)		—		(236)		(737)		(11,315)
Recoveries		99		20		129		185		433
Provision		12,762		141		(315)		538		13,126
Non 310-30 ending balance		21,340		5,583		3,965		305		31,193
ASC 310-30 beginning balance		—		220		—		5		225
Charge-offs		—		—		—		—		—
Recoveries		—		—		—		—		—
Provision (recoupment)		45		(194)		—		(5)		(154)
ASC 310-30 ending balance		45		26		—		—		71
Ending balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	1,466	$	2	$	32	$	1	$	1,501
Non 310-30 loans collectively evaluated for impairment		19,874		5,581		3,933		304		29,692
ASC 310-30 loans		45		26		—		—		71
Total ending allowance balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Loans:
Non 310-30 individually evaluated for impairment	$	22,232	$	1,260	$	7,240	$	141	$	30,873
Non 310-30 collectively evaluated for impairment		1,822,898		483,881		696,238		24,434		3,027,451
ASC 310-30 loans		29,475		77,908		12,759		481		120,623
Total loans	$	1,874,605	$	563,049	$	716,237	$	25,056	$	3,178,947

	Year ended December 31, 2016
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	17,261	$	4,166	$	5,281	$	411	$	27,119
Non 310-30 beginning balance		16,473		3,939		5,245		385		26,042
Charge-offs		(20,684)		(280)		(408)		(771)		(22,143)
Recoveries		89		123		108		274		594
Provision		22,943		1,640		(558)		431		24,456
Non 310-30 ending balance		18,821		5,422		4,387		319		28,949
ASC 310-30 beginning balance		788		227		36		26		1,077
Charge-offs		—		(41)		—		(6)		(47)
Recoveries		—		—		—		—		—
(Recoupment) provision		(788)		34		(36)		(15)		(805)
ASC 310-30 ending balance		—		220		—		5		225
Ending balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	2,360	$	1	$	46	$	2	$	2,409
Non 310-30 loans collectively evaluated for impairment		16,461		5,421		4,341		317		26,540
ASC 310-30 loans		—		220		—		5		225
Total ending allowance balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Loans:
Non 310-30 individually evaluated for impairment	$	29,411	$	631	$	7,346	$	188	$	37,576
Non 310-30 collectively evaluated for impairment		1,491,739		437,011		721,015		27,728		2,677,493
ASC 310-30 loans		39,280		89,150		16,524		898		145,852
Total loans	$	1,560,430	$	526,792	$	744,885	$	28,814	$	2,860,921

In evaluating the loan portfolio for an appropriate ALL level, non-impaired loans that were not accounted for under ASC 310-30 were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of applying loss ratios and determining applicable subjective adjustments to the ALL. The application of subjective adjustments was based upon qualitative risk factors, including economic trends and conditions, industry conditions, asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

Net charge-offs on non 310-30 loans during 2017 were $10.9 million. Management’s evaluation of credit quality resulted in a provision for loan losses on the non 310-30 loans of $13.1 million during 2017. During 2016, the Company had $21.6 million of net charge-offs on non 310-30 loans, of which $19.1 million were from the energy portfolio, and recorded a provision for loan losses on non 310-30 loans of $24.5 million, or which $18.9 million were from the energy portfolio.

During 2017 and 2016, the Company re-estimated the expected cash flows of the loan pools accounted for under ASC 310-30. The re-measurement in 2017 resulted in a net recoupment of $154 thousand, due to a $194 thousand recoupment in the non-owner occupied commercial real estate segment. The re-measurement in 2016 resulted in a net recoupment of $805 thousand, which was comprised primarily of a $788 thousand recoupment in the commercial segment.

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Premises and Equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Premises and Equipment

Note 8 Premises and Equipment

Premises and equipment consisted of the following at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Land	$	28,698	$	29,864
Buildings and improvements		73,703		69,980
Equipment		46,091		42,067
Total premises and equipment, at cost		148,492		141,911
Less: accumulated depreciation and amortization		(54,784)		(46,240)
Premises and equipment, net	$	93,708	$	95,671

The Company incurred $7.6 million, $8.7 million and $10.1 million of depreciation expense during 2017, 2016 and 2015, respectively, as a component of occupancy and equipment expense in the consolidated statements of operations. The Company disposed of $2.3 million, $3.5 million and $0.1 million of premises and equipment, net, during 2017, 2016 and 2015, respectively.

During 2017, the Company consolidated two banking centers and completed the divestiture of four banking centers, resulting in a gain of $2.9 million included in non-interest income in the consolidate statements of operations. The divestiture included buildings classified as held-for-sale, which were adjusted to the lower of the carrying amount or fair value less cost to sell and totaled $1.6 million at December 31, 2016.

During 2016, the Company consolidated seven banking centers resulting in certain buildings classified as held-for-sale, which were adjusted to the lower of the carrying amount or fair value less cost to sell. The adjustment totaled $1.4 million and is included in the consolidated statements of operations at December 31, 2015.

Space in certain facilities is leased under operating leases. Below is a summary of future minimum lease payments as of December 31, 2017:

Years ending December 31,	Amount
2018	$	3,158
2019		3,092
2020		2,981
2021		3,091
2022		3,052
Thereafter		12,210
Total	$	27,584

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Other Real Estate Owned

12 Months Ended

Dec. 31, 2017

FDIC Loss-Sharing Related

Other Real Estate Owned

Note 9 Other Real Estate Owned

A summary of the activity in the OREO balances during 2017 and 2016 is as follows:

	For the years ended December 31,
	2017		2016
Beginning balance	$	15,662	$	20,814
Transfers from loan portfolio, at fair value		1,800		6,868
Impairments		(766)		(298)
Sales, net		(6,205)		(11,722)
Ending balance	$	10,491	$	15,662

The OREO balances excluded $0.7 million and $1.6 million at December 31, 2017 and 2016, respectively, of the Company’s minority interests in OREO, which are held by outside banks where the Company was not the lead bank and does not have a controlling interest. The Company maintains a receivable in other assets for these minority interests. Included in Sales, net are gains of $4.2 million and $4.4 million for the years ended December 31, 2017 and 2016, respectively.

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 10 Goodwill and Intangible Assets

In connection with our acquisitions, the Company recorded goodwill of $59.6 million and core deposit intangible assets of $38.4 million. The Company is amortizing the core deposit intangibles on a straight line basis over 7 years from the date of the respective acquisitions, which represents the expected useful life of the assets. The Company recognized core deposit intangible amortization expense of $5.3 million, $5.5 million and $5.4 million during 2017, 2016 and 2015, respectively. The following table shows the estimated future amortization expense as of December 31, 2017:

Years ending December 31,		Amount
2018	$	1,122
2019		135
2020		135
2021		135
2022		79

The accumulated amortization of the core deposit intangible assets was $36.8 million and $31.5 million at December 31, 2017 and 2016, respectively. At December 31, 2017, the core deposit intangible for the Bank Midwest and Hillcrest Bank acquisitions were fully amortized.

The Company had goodwill of $59.6 million at December 31, 2017 and 2016. The goodwill is measured as the excess of the fair value of consideration paid over the fair value of assets acquired. No goodwill impairment was recorded during 2017, 2016 or 2015.

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Deposits

12 Months Ended

Dec. 31, 2017

Deposits [Abstract]

Deposits

Note 11 Deposits

Total deposits were $4.0 billion and $3.9 billion at December 31, 2017 and 2016, respectively. Time deposits were $1.1 billion and $1.2 billion at December 31, 2017 and 2016, respectively. At December 31, 2016, deposits totaling $103.0 million were held-for-sale, including $51.6 million of time deposits. The following table summarizes the Company’s time deposits by remaining contractual maturity:

Years ending December 31,	Amount
2018	$	684,622
2019		308,139
2020		100,275
2021		7,044
2022		14,389
Thereafter		3,581
Total time deposits	$	1,118,050

The Company incurred interest expense on deposits as follows during the periods indicated:

	For the years ended December 31,
	2017		2016		2015
Interest bearing demand deposits	$	445	$	369	$	315
Money market accounts		4,077		3,600		3,372
Savings accounts		1,481		1,016		837
Time deposits		10,169		8,978		9,085
Total	$	16,172	$	13,963	$	13,609

The Federal Reserve System requires cash balances to be maintained at the Federal Reserve Bank based on certain deposit levels. There was no minimum reserve requirement for the Bank at December 31, 2017. The aggregate amount of certificates of deposit in denominations that meet or exceed the FDIC insurance limit was $140.7 million and $119.7 million at December 31, 2017 and 2016, respectively.

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Borrowings

12 Months Ended

Dec. 31, 2017

Disclosure of Repurchase Agreements [Abstract]

Borrowings

Note 12 Borrowings

The following table sets forth selected information regarding repurchase agreements during 2017, 2016 and 2015:

	As of and for the years ended December 31,
	2017		2016		2015
Maximum amount of outstanding agreements at any month end during the period	$	130,463	$	154,404	$	288,591
Average amount outstanding during the period	$	88,390	$	109,246	$	197,726
Weighted average interest rate for the period		0.19%		0.14%		0.09%

As of December 31, 2017, 2016 and 2015, the Company had pledged mortgage-backed securities with a fair value of approximately $136.1 million, $99.1 million and $205.7 million, respectively, for securities sold under agreements to repurchase. Additionally, there was $5.7 million, $7.0 million and $68.1 million of excess collateral pledged for repurchase agreements at December 31, 2017, 2016 and 2015, respectively.

The vast majority of the Company’s repurchase agreements are overnight transactions with clients that mature the day after the transaction. During 2017, 2016 and 2015, the overnight agreements had a weighted average interest rate of 0.19%,  0.14% and 0.09%, respectively. At December 31, 2017, 2016 and 2015, none of the Company’s repurchase agreements were for periods longer than one day. The repurchase agreements are subject to a master netting arrangement; however, the Company has not offset any of the amounts shown in the consolidated financial statements.

As a member of the FHLB, the Bank has access to a line of credit and term financing from the FHLB with total available credit of $806.7 million at December 31, 2017. At December 31, 2017, 2016 and 2015, the Bank had $129.1 million, $25.0 million and $25.0 million in term advances from the FHLB, respectively. All of the outstanding advances have fixed interest rates between 1.31% - 2.33%, with maturity dates of 2018 - 2020. The Bank had investment securities pledged as collateral for FHLB advances in the amount of $28.1 million, $28.8 million and $41.7 million at December 31, 2017, 2016 and 2015, respectively. Interest expense related to FHLB advances totaled $1.8 million, $0.7 million and $0.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

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Regulatory Capital

12 Months Ended

Dec. 31, 2017

FDIC Loss-Sharing Related

Regulatory Capital

Note 13 Regulatory Capital 

As a bank holding company, the Company is subject to the regulatory capital adequacy requirements implemented by the Federal Reserve. The federal banking agencies have risk-based capital adequacy regulations intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations. Under these regulations, assets are assigned to one of several risk categories, and nominal dollar amounts of assets and credit equivalent amounts of off-balance-sheet items are multiplied by a risk adjustment percentage for the category.

The Basel III Capital rules, effective January 1, 2015, changed the components of regulatory capital, changed the way in which risk ratings are assigned to various categories of bank assets and defined a new Tier 1 common risk-based ratio. In addition, a capital conservative buffer requirement, designed to strengthen an institution’s financial resilience during economic cycles through the restriction of capital distributions and other payments, became effective in 2016, with full phase-in beginning January 1, 2019. When fully phased-in, the capital conservation buffer adds a 2.5% capital requirement above existing regulatory minimum ratios.

Under the Basel III requirements, at December 31, 2017 and 2016, the Company and the Bank met all capital requirements and the Bank had regulatory capital ratios in excess of the levels established for well-capitalized institutions, as detailed in the tables below.

	December 31, 2017
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	9.8%	$	470,877	N/A		N/A	4.0%	$	191,559
NBH Bank	8.1%		382,918	5.0%	$	237,772	4.0%		190,217
Common equity tier 1 risk-based capital:
Consolidated	12.9%	$	470,877	N/A		N/A	7.0%	$	335,228
NBH Bank	10.6%		382,918	6.5%	$	309,103	7.0%		332,881
Tier 1 risk-based capital ratio:
Consolidated	12.9%	$	470,877	N/A		N/A	8.5%	$	309,400
NBH Bank	10.6%		382,918	8.0%	$	289,022	8.5%		307,086
Total risk-based capital ratio:
Consolidated	13.8%	$	502,917	N/A		N/A	10.5%	$	382,200
NBH Bank	11.5%		414,958	10.0%	$	361,277	10.5%		379,341

	December 31, 2016
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	10.4%	$	470,259	N/A		N/A	4.0%	$	181,019
NBH Bank	8.6%		389,189	4.5%	$	202,903	4.0%		180,358
Common equity tier 1 risk-based capital:
Consolidated	14.2%	$	470,259	N/A		N/A	7.0%	$	316,784
NBH Bank	11.8%		389,189	6.5%	$	293,082	7.0%		315,627
Tier 1 risk-based capital ratio:
Consolidated	14.2%	$	470,259	N/A		N/A	8.5%	$	282,578
NBH Bank	11.8%		389,189	8.0%	$	264,596	8.5%		281,133
Total risk-based capital ratio:
Consolidated	15.0%	$	499,759	N/A		N/A	10.5%	$	349,067
NBH Bank	12.7%		418,689	10.0%	$	330,745	10.5%		347,282

(1) As of the fully phased-in date of January 1, 2019, including the capital conservation buffer.

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FDIC Loss-Sharing Related 10K

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

FDIC Loss-Sharing Related

Note 14 FDIC Loss-Sharing Related

During the fourth quarter of 2015, the Bank entered into an early termination agreement with the FDIC, terminating its loss-share agreements. The Bank paid consideration of $15.1 million to the FDIC for the termination of the agreements. Additionally, the Bank recorded a pre-tax gain of $4.9 million in the fourth quarter of 2015, which was recorded in FDIC loss-sharing related income in the consolidated statements of operations. FDIC related income during 2015 was $(15.6) million, mostly driven by FDIC indemnification asset amortization.

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Stock-based Compensation and Benefits

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation and Benefits

Note 15 Stock-based Compensation and Benefits

The Company provides stock-based compensation in accordance with shareholder-approved plans. During the second quarter of 2014, shareholders approved the 2014 Omnibus Incentive Plan (the "2014 Plan"). The 2014 Plan replaces the NBH Holdings Corp. 2009 Equity Incentive Plan (the "Prior Plan"), pursuant to which the Company granted equity awards prior to the approval of the 2014 Plan. Pursuant to the 2014 Plan, the Compensation Committee of the Board of Directors has the authority to grant, from time to time, awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, other stock-based awards, or any combination thereof to eligible persons.

As of December 31, 2017, the aggregate number of Class A common stock available for issuance under the 2014 Plan is 5,754,830 shares. Any shares that are subject to stock options or stock appreciation rights under the 2014 Plan will be counted against the amount available for issuance as one share for every one share granted, and any shares that are subject to awards under the 2014 Plan other than stock options or stock appreciation rights will be counted against the amount available for issuance as 3.25 shares for every one share granted. The 2014 Plan provides for recycling of shares from both the Prior Plan and the 2014 Plan, the terms of which are further described in the Company's Proxy Statement for its 2014 Annual Meeting of Shareholders. Upon an option exercise, it is the Company’s policy to issue shares from treasury stock.

To date, the Company has issued stock options, restricted stock and performance stock units under the plans. The Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of stock at the date of grant.

Stock options

The Company issued stock options during 2017, 2016 and 2015, which are primarily time-vesting with 1/3 vesting on each of the first, second and third anniversary of the date of grant or date of hire.

The expense associated with the awarded stock options was measured at fair value using a Black-Scholes option-pricing model. The outstanding option awards vest on a graded basis over 1-4 years of continuous service and have 7-10 year contractual terms.

Below are the weighted average assumptions used in the Black-Scholes option pricing model to determine fair value of the Company’s stock options granted in 2017, 2016 and 2015:

	2017		2016		2015
Weighted average fair value	$	7.84	$	4.24	$	4.37
Weighted average risk-free interest rate (1)		2.14%		1.47%		1.59%
Expected volatility (2)		21.61%		22.47%		23.87%
Expected term (years) (3)		6.09		6.09		6.01
Dividend yield (4)		0.83%		1.02%		1.05%

(1)	The risk-free rate for the expected term of the options was based on the U.S. Treasury yield curve at the date of grant and based on the expected term.
(2)	Expected volatility was calculated using a time-based weighted migration of the Company’s own stock price volatility coupled with those of a peer group of eight comparable publicly traded companies for a period commensurate with the expected term of the options.
(3)	The expected term was estimated to be the average of the contractual vesting term and time to expiration.
(4)	The dividend yield was assumed to be $0.05 per share per quarter through the third quarter of 2016, $0.07 per share per quarter through the first quarter of 2017 and $0.09 per share per quarter through the fourth quarter of 2017 in accordance with the Company’s dividend policy at the time of grant.

The Company issued stock options in accordance with the 2014 Plan during 2017. The following table summarizes stock option activity for 2017:

				Weighted
				average
		Weighted		remaining
		average		contractual	Aggregate
		exercise		term in	intrinsic
	Options	price		years	value
Outstanding at December 31, 2016	2,185,922	$	19.81	4.85	$	7,753
Granted	100,401		33.98
Exercised	(658,371)		19.91
Forfeited	(29,634)		19.82
Outstanding at December 31, 2017	1,598,318	$	20.62	4.07	$	19,017
Options exercisable at December 31, 2017	1,372,300	$	19.82	3.35	$	17,306
Options vested and expected to vest	1,581,184	$	20.54	4.02	$	18,924

Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $0.7 million, $0.7 million and $0.7 million for 2017, 2016 and 2015, respectively. At December 31, 2017, there was $0.5 million of total unrecognized compensation cost related to non-vested stock options granted under the plans. The cost is expected to be recognized over a weighted average period of 2.0 years.

The following table summarizes the Company’s outstanding stock options:

				Options outstanding				Options exercisable
					Weighted average
				Number	remaining contractual	Weighted average		Number	Weighted average
Range of exercise price				outstanding	life (years)	exercise price		exercisable	exercise price
$	18.00	-	18.99	129,327	5.85	$	18.55	129,145	$	18.55
$	19.00	-	19.99	243,649	7.78	$	19.38	115,278	$	19.31
$	20.00	-	20.99	1,126,549	2.61	$	20.01	1,125,577	$	20.01
$	21.00 and above			98,793	9.14	$	33.42	2,300	$	23.98

Restricted stock awards

The Company issued time based restricted stock awards during 2017, 2016 and 2015. The restricted stock awards vest over a range of a 1 – 3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.

No market-based stock awards were granted during 2017. During the year ended December 31, 2016, the Company granted market-based awards of 26,594 shares in accordance with the 2014 Plan. These shares have a five-year performance period and vest upon the later of the Company’s stock price achieving an established price goal during the performance period and the third anniversary of the date of grant. The $11.28 per share fair value of these awards was determined using a Monte Carlo Simulation at grant date. The market-based performance condition had been met for these awards and the total unrecognized compensation cost related to these non-vested awards totaled $0.1 million, and is expected to be recognized over a weighted average period of approximately 1.2 years.

Performance stock units

During the year ended December 31, 2017 and 2016, the Company granted 49,758 and 91,342 performance stock units in accordance with the 2014 Plan, respectively. These performance stock units granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares to be awarded at the end of the performance period will range from 0% - 150% of the initial target awards. 60% of the award is based on the Company’s cumulative earnings per share (EPS target) during the performance period, and 40% of the award is based on the Company’s cumulative total shareholder return (TSR target), or TSR, during the performance period. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the KBW Regional Index at the grant date to determine the shares awarded. The fair value of the EPS target portion of the award was determined based on the closing stock price of the Company’s common stock on the grant date. The fair value of the TSR target portion of the award was determined using a Monte Carlo Simulation at the grant date. The weighted-average grant date fair value per unit for awards granted during 2017 of the EPS target portion and the TSR target portion was $34.04 and $32.06, respectively.

The following table summarizes restricted stock and performance stock unit activity during 2017 and 2016:

		Weighted				Weighted
	Restricted	average grant-		Performance		average grant-
	stock shares	date fair value		stock units		date fair value
Unvested at December 31, 2015	836,031	$	15.42	—	$	—
Granted	122,992		19.15	91,342		18.22
Vested	(431,155)		15.78	—		—
Forfeited	(28,597)		18.95	(6,047)		18.22
Unvested at December 31, 2016	499,271		15.82	85,295		18.22
Granted	66,471		33.43	49,758		33.22
Vested	(380,956)		15.40	—		—
Forfeited	(21,229)		18.73	(9,971)		21.78
Unvested at December 31, 2017	163,557	$	22.60	125,082	$	23.90

As of December 31, 2017, the total unrecognized compensation cost related to the non-vested restricted stock awards and performance stock units totaled $1.5 million and $1.6 million, respectively, and is expected to be recognized over a weighted average period of approximately 1.8 years and 1.8 years, respectively. Expense related to non-vested restricted stock awards totaled $2.2 million, $2.4 million and $2.6 million during 2017, 2016 and 2015, respectively. Expense related to non-vested performance stock units totaled $0.8 million, $0.4 million and $0.0 million during 2017, 2016 and 2015, respectively. Expense related to non-vested restricted stock awards and units is a component of salaries and benefits in the Company’s consolidated statements of operations.

Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan (“ESPP”) is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ESPP. Under the ESPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 355,159 were available for issuance.

Under the ESPP, employees purchased 11,178 shares and 19,178 shares during 2017 and 2016, respectively.

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Warrants

12 Months Ended

Dec. 31, 2017

Warrants and Rights Note Disclosure [Abstract]

Warrants

Note 16 Warrants

During 2017 and 2016,  250,750 and 475,000 warrants were exercised in a non-cash transaction, respectively, representing the remaining outstanding warrants. The warrants were granted to certain lead investors of the Company at the time of the Company’s initial capital raise (2009-2010), all with an exercise price of $20.00 per share. Refer to the consolidated statements of changes in shareholders’ equity for additional detail.

During 2015, the Company modified its remaining warrant agreements resulting in the reclassification of $3.1 million to additional paid-in capital included in the consolidated statements of financial condition at December 31, 2015. Refer to the consolidated statements of changes in shareholders’ equity for additional detail.

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Common Stock

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Common Stock

Note 17 Common Stock

The Company had 26,875,585 and 26,386,583 shares of Class A common stock outstanding at December 31, 2017 and 2016, respectively. Additionally, the Company had 163,557 and 499,271 shares outstanding at December 31, 2017 and 2016, respectively, of restricted Class A common stock issued but not yet vested under the 2014 Omnibus Incentive Plan and the Prior Plan that are not included in shares outstanding until such time that they are vested; however, these shares do have voting and certain dividend rights during the vesting period.

On August 5, 2016, the Board of Directors authorized a share repurchase program for up to $50.0 million from time to time in either the open market or through privately negotiated transactions. The remaining authorization under this program at December 31, 2017 was $12.6 million.

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Income Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Income Per Share

Note 18 Income Per Share

The Company calculates income per share under the two-class method, as certain non-vested share awards contain non-forfeitable rights to dividends. As such, these awards are considered securities that participate in the earnings of the Company. Non-vested shares are discussed further in note 15.

The Company had 26,875,585 and 26,386,583 shares of Class A commons stock outstanding as of December 31, 2017 and 2016, respectively, exclusive of issued non-vested restricted shares. Certain stock options and non-vested restricted shares are potentially dilutive securities, but are not included in the calculation of diluted income per share because to do so would have been anti-dilutive for 2017, 2016 and 2015.

The following table illustrates the computation of basic and diluted income per share for 2017, 2016 and 2015:

	For the years ended December 31,
	2017		2016		2015
Net income	$	14,579	$	23,060	$	4,881
Less: income allocated to participating securities		(56)		(52)		(53)
Income allocated to common shareholders	$	14,523	$	23,008	$	4,828
Weighted average shares outstanding for basic income per common share		26,928,763		28,313,061		34,349,996
Dilutive effect of equity awards		772,392		704,831		9,321
Dilutive effect of warrants		8,504		73,451		4,170
Weighted average shares outstanding for diluted income per common share		27,709,659		29,091,343		34,363,487
Basic income per share	$	0.54	$	0.81	$	0.14
Diluted income per share	$	0.53	$	0.79	$	0.14

The Company had 1,598,318,  2,185,922 and 2,596,251 outstanding stock options to purchase common stock at weighted average exercise prices of $20.62,  $19.81 and $19.84 per share at December 31, 2017, 2016 and 2015, respectively, which have time-vesting criteria, and as such, any dilution is derived only for the time frame in which the vesting criteria had been met and where the inclusion of those stock options is dilutive. Additionally, 250,750 warrants were exercised in a non-cash transaction during 2017, representing the remaining outstanding warrants to purchase shares of the Company’s common stock. The warrants had an exercise price of $20.00. The Company had 288,639,  499,271 and 836,031 unvested restricted shares and units issued as of December 31, 2017, 2016 and 2015, respectively, which have performance, market and/or time-vesting criteria, and as such, any dilution is derived only for the time frame in which the vesting criteria had been met and where the inclusion of those restricted shares and units is dilutive.

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 19 Income Taxes

Income tax expense attributable to income before taxes was $21.3 million, $2.9 million and $3.0 million for 2017, 2016 and 2015, respectively. During the fourth quarter of 2017, the Company re-measured its deferred tax asset as a result of the enactment of “H.R.1”, known as the “Tax Cuts and Jobs Act”, which among other items reduces the federal corporate tax rate to 21% effective January 1, 2018. Income tax expense recorded in 2017 included an $18.5 million non-cash one-time charge primarily related to this re-measurement. The re-measurement was based on reasonable estimates using information that was known and available from the Tax Cuts and Jobs Act as it related to our temporary differences. As additional details and technical corrections arise related to the Tax Cuts and Jobs Act, the re-measurement estimates may be subject to future adjustment.

(a) Income taxes

Total income taxes for 2017, 2016 and 2015 were allocated as follows:

	For the years ended December 31,
	2017		2016		2015
Current expense:
U.S. federal	$	1,230	$	1,868	$	3,536
State and local		169		117		311
Total current income tax expense		1,399		1,985		3,847
Deferred expense (benefit):
U.S. federal		17,639		626		(710)
State and local		2,245		336		(93)
Total deferred income tax expense (benefit)		19,884		962		(803)
Income tax expense	$	21,283	$	2,947	$	3,044

(b) Tax Rate Reconciliation

The reconciliation between the income tax expenses and the amounts computed by applying the U.S. federal income tax rate to pretax income is as follows:

	For the years ended December 31,
	2017		2016		2015
Income tax at federal statutory rate (35%)	$	12,550	$	9,103	$	2,774
State income taxes, net of federal benefits		265		295		142
Tax-exempt loan interest income		(5,380)		(3,798)		(2,568)
Bank-owned life insurance income		(813)		(724)		(576)
Stock-based compensation		(3,998)		(2,002)		3,520
Federal and state deferred tax rate change		18,457		—		—
Warrant valuation		—		—		37
Bargain purchase gain		—		—		(367)
Other		202		73		82
Income tax expense	$	21,283	$	2,947	$	3,044

(c) Significant Components of Deferred Taxes

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below:

	December 31, 2017		December 31, 2016
Deferred tax assets:
Excess tax basis of acquired loans over carrying value	$	1,887	$	5,865
Allowance for loan losses		7,354		11,063
Intangible assets		6,367		12,279
Other real estate owned		228		—
Accrued stock-based compensation		3,098		7,429
Accrued compensation		2,431		3,296
Capitalized start-up costs		2,488		4,554
Accrued expenses		1,227		2,218
Net deferred loan fees		622		1,198
Net operating loss		1,027		2,177
Federal tax credits		5,891		1,888
Net unrealized losses on investment securities		2,307		1,082
Other		993		1,526
Total deferred tax assets		35,920		54,575
Deferred tax liabilities:
Premises and equipment		(113)		(937)
Other real estate owned		—		(426)
Prepaid expenses		(177)		(402)
Total deferred tax liabilities		(290)		(1,765)
Net deferred tax asset	$	35,630	$	52,810

At December 31, 2017, the Company has federal and state net operating loss carryovers (NOLs) of $4.0 million and $8.9 million, respectively, which are available to offset future taxable income. The federal NOLs expire in varying amounts through 2037, and the state NOLs expire in varying amounts between 2026 and 2037. The Company also has a minimum tax credit carryover of $5.9 million that under the recently enacted tax law, the minimum tax credit is available to reduce income tax obligations in future periods without limitation and eventually becomes refundable regardless of the Company’s tax liability. The minimum tax credit is available to reduce income tax obligations in future periods to the extent they exceed the calculated alternative minimum tax. The Company does not expect any tax attribute carryovers to expire before they are utilized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, if any (including the impact of available carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. For the years ended December 31, 2017 and 2016, management believes a valuation allowance on the deferred tax asset is not necessary based on the current and future projected earnings of the Company. The Company has no ASC 740-10 unrecognized tax benefits recorded as of December 31, 2017 and 2016 and does not expect the total amount of unrecognized tax benefits to significantly increase within the next 12 months. The Company and its subsidiary bank are subject to income tax by federal, state and local government taxing authorities. The Company’s tax returns for the years ended December 31, 2014 through 2017 remain subject to examination for U.S. federal income tax authorities. The years open to examination by state and local government authorities vary by jurisdiction.

The Company has unvested stock-based compensation awards outstanding at December 31, 2017, including stock options, restricted stock and performance stock units. The strike prices for options range from $18.09 to $34.16, with a large portion of the awards having strike prices of $20.00. The restricted stock vest over a range of 1-3 year period. The performance stock units cliff vest over a range of 2-3 years and the number of shares issued is determined by the final performance results. Depending on the movement in our stock price, these stock-based compensation awards may create either an excess tax benefit or tax deficiency depending on the relationship between the fair value at the time of vesting or exercise and the estimated fair value recorded at the time of grant. During 2017 and 2016, the Company recorded $4.2 million and $2.1 million, respectively, of excess tax benefit related to the settlement of awards during the period as a component of income tax expense in the consolidated statements of operations. During 2015, the Company recorded a tax deficiency of $3.7 million in income tax expense resulting from expired or exercised awards. As of December 31, 2017, the Company had a $3.1 million deferred tax asset related to stock-based compensation, $2.3 million of which is associated with executive officers still employed by the Company.

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Derivatives

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Note 20 Derivatives

Risk management objective of using derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company has established policies that neither carrying value nor fair value at risk should exceed established guidelines. The Company has designed strategies to confine these risks within the established limits and identify appropriate trade-offs in the financial structure of its balance sheet. These strategies include the use of derivative financial instruments to help achieve the desired balance sheet repricing structure while meeting the desired objectives of its clients. Currently the Company employs certain interest rate swaps that are designated as fair value hedges as well as economic hedges. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

Fair values of derivative instruments on the balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of financial condition as of December 31, 2017 and 2016.

Information about the valuation methods used to measure fair value is provided in note 22.

		Asset derivatives fair value					Liability derivatives fair value
	Balance Sheet	December 31,		December 31,		Balance Sheet	December 31,		December 31,
	location	2017		2016		location	2017		2016
Derivatives designated as hedging instruments:
Interest rate products	Other assets	$	10,489	$	9,528	Other liabilities	$	1,167	$	1,381
Total derivatives designated as hedging instruments		$	10,489	$	9,528		$	1,167	$	1,381
Derivatives not designated as hedging instruments:
Interest rate products	Other assets	$	2,483	$	1,900	Other liabilities	$	2,584	$	1,898
Interest rate lock commitments	Other assets		128		149	Other liabilities		—		6
Forward contracts	Other assets		5		138	Other liabilities		7		20
Total derivatives not designated as hedging instruments		$	2,616	$	2,187		$	2,591	$	1,924

Fair value hedges

Interest rate swaps designated as fair value hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of December 31, 2017, the Company had 61 interest rate swaps with a notional amount of $417.7 million that were designated as fair value hedges of interest rate risk associated with the Company’s fixed-rate loans. The Company had 42 outstanding interest rate swaps with a notional amount of $313.0 million that were designated as fair value hedges as of December 31, 2016.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. During 2017, the Company recognized a net loss of $995 thousand in non-interest income related to hedge ineffectiveness. During 2016, the Company recognized a net gain of $293 thousand in non-interest income related to hedge ineffectiveness.

Non-designated hedges

Derivatives not designated as hedges are not speculative and consist of interest rate swaps with commercial banking clients that facilitate their respective risk management strategies. Interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client swaps and the offsetting swaps are recognized directly in earnings. As of December 31, 2017, the Company had 44 matched interest rate swap transactions with an aggregate notional amount of $202.2 million related to this program. As of December 31, 2016, the Company had 36 matched interest rate swap transactions with an aggregate notional amount of $132.6 million related to this program. 

As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Company then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs ("best efforts") or commits to deliver the locked loan in a binding ("mandatory") delivery program with an investor. Fair value changes of certain loans under interest rate lock commitments are hedged with forward sales contracts of MBS. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in non-interest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded.

Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Company does not expect any counterparty to any MBS contract to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Company fails to deliver the loans subject to interest rate risk lock commitments, it will still be obligated to “pair off” MBS to the counterparty. Should this be required, the Company could incur significant costs in acquiring replacement loans and such costs could have an adverse effect on the consolidated financial statements.

The fair value of the mortgage banking derivative is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.

The Company had 31 interest rate lock commitments with a notional value of $8.0 million and six forward contracts with a notional value of $9.0 million at December 31, 2017. The Company had 78 interest rate lock commitments with a notional value of $13.8 million and 11 forward contracts with a notional value of $11.8 million at December 31, 2016.

Effect of derivative instruments on the consolidated statements of operations

The tables below present the effect of the Company’s derivative financial instruments in the consolidated statements of operations for 2017 and 2016:

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives in fair value	recognized in income on	For the years ended December 31,
hedging relationships	derivatives	2017		2016
Interest rate products	Other non-interest income	$	1,177	$	8,183
Total		$	1,177	$	8,183

	Location of gain (loss)	Amount of gain or (loss) recognized in income on hedged items
	recognized in income on	For the years ended December 31,
Hedged items	hedged items	2017		2016
Interest rate products	Other non-interest income	$	(2,172)	$	(7,890)
Total		$	(2,172)	$	(7,890)

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives not designated	recognized in income on	For the years ended December 31,
as hedging instruments	derivatives	2017		2016
Interest rate products	Other non-interest expense	$	104	$	129
Interest rate lock commitments	Gain on sale of mortgages, net		(13)		142
Forward contracts	Gain on sale of mortgages, net		(120)		118
Total		$	(29)	$	389

Credit-risk-related contingent features

The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness for reasons other than an error or omission of an administrative or operational nature, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty has the right to terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of December 31, 2017, the termination value of derivatives in a net liability position related to these agreements was $0.5 million, which includes accrued interest but excludes any adjustment for nonperformance risk. The Company has minimum collateral posting thresholds with certain of its derivative counterparties and as of December 31, 2017, the Company had posted $0.5 million in eligible collateral. If the Company had breached any of these provisions at December 31, 2017, it could have been required to settle its obligations under the agreements at the termination value.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 21 Commitments and Contingencies

In the normal course of business, the Company enters into various off-balance sheet commitments to help meet the financing needs of clients. These financial instruments include commitments to extend credit, commercial and consumer lines of credit and standby letters of credit. The same credit policies are applied to these commitments as the loans on the consolidated statements of financial condition; however, these commitments involve varying degrees of credit risk in excess of the amount recognized in the consolidated statements of financial condition. At December 31, 2017 and 2016, the Company had loan commitments totaling $680.8 million and $602.2 million, respectively, and standby letters of credit that totaled $7.2 million and $13.5 million, respectively. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements, as commitments often expire without being drawn upon. However, the contractual amount of these commitments, offset by any additional collateral pledged, represents the Company’s potential credit loss exposure.

Total unfunded commitments at December 31, 2017 and 2016 were as follows:

	December 31, 2017		December 31, 2016
Commitments to fund loans	$	181,904	$	149,391
Unfunded commitments under lines of credit		498,857		452,851
Commercial and standby letters of credit		7,185		13,532
Total unfunded commitments	$	687,946	$	615,774

Commitments to fund loans—Commitments to fund loans are legally binding agreements to lend to clients in accordance with predetermined contractual provisions providing there have been no violations of any conditions specified in the contract. These commitments are generally at variable interest rates and are for specific periods or contain termination clauses and may require the payment of a fee. The total amounts of unused commitments are not necessarily representative of future credit exposure or cash requirements, as commitments often expire without being drawn upon.

Unfunded commitments under lines of credit—In the ordinary course of business, the Company extends revolving credit to its clients. These arrangements may require the payment of a fee.

Commercial and standby letters of credit—As a provider of financial services, the Company routinely issues commercial and standby letters of credit, which may be financial standby letters of credit or performance standby letters of credit. These are various forms of “back-up” commitments to guarantee the performance of a client to a third party. While these arrangements represent a potential cash outlay for the Company, the majority of these letters of credit will expire without being drawn upon. Letters of credit are subject to the same underwriting and credit approval process as traditional loans, and as such, many of them have various forms of collateral securing the commitment, which may include real estate, personal property, receivables or marketable securities.

Contingencies

In the ordinary course of business, the Company and the Bank may be subject to litigation. Based upon the available information and advice from the Company’s legal counsel, management does not believe that any potential, threatened or pending litigation to which it is a party will have a material adverse effect on the Company’s liquidity, financial condition or results of operations.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 22 Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For disclosure purposes, the Company groups its financial and non-financial assets and liabilities into three different levels based on the nature of the instrument and the availability and reliability of the information that is used to determine fair value. The three levels are defined as follows:

· Level 1—Includes assets or liabilities in which the inputs to the valuation methodologies are based on unadjusted quoted prices in active markets for identical assets or liabilities.

· Level 2—Includes assets or liabilities in which the inputs to the valuation methodologies are based on similar assets or liabilities in inactive markets, quoted prices for identical or similar assets or liabilities in inactive markets, and inputs other than quoted prices that are observable, such as interest rates, yield curves, volatilities, prepayment speeds, and other inputs obtained from observable market input.

· Level 3—Includes assets or liabilities in which the inputs to the valuation methodology are based on at least one significant assumption that is not observable in the marketplace. These valuations may rely on management’s judgment and may include internally-developed model-based valuation techniques.

Level 1 inputs are considered to be the most transparent and reliable and level 3 inputs are considered to be the least transparent and reliable. The Company assumes the use of the principal market to conduct a transaction of each particular asset or liability being measured and then considers the assumptions that market participants would use when pricing the asset or liability. Whenever possible, the Company first looks for quoted prices for identical assets or liabilities in active markets (level 1 inputs) to value each asset or liability. However, when inputs from identical assets or liabilities on active markets are not available, the Company utilizes market observable data for similar assets and liabilities. The Company maximizes the use of observable inputs and limits the use of unobservable inputs to occasions when observable inputs are not available. The need to use unobservable inputs generally results from the lack of market liquidity of the actual financial instrument or of the underlying collateral. Although, in some instances, third party price indications may be available, limited trading activity can challenge the observability of these quotations.

Changes in the valuation inputs used for measuring the fair value of financial instruments may occur due to changes in current market conditions or other factors. Such changes may necessitate a transfer of the financial instruments to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfer occurs. During 2017 and 2016, there were no transfers of financial instruments between the hierarchy levels.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of each instrument under the valuation hierarchy:

Fair Value of Financial Instruments Measured on a Recurring Basis

Investment securities available-for-sale—Investment securities available-for-sale are carried at fair value on a recurring basis. To the extent possible, observable quoted prices in an active market are used to determine fair value and, as such, these securities are classified as level 1. At December 31, 2017 and 2016, the Company did not hold any level 1 securities. When quoted market prices in active markets for identical assets or liabilities are not available, quoted prices of securities with similar characteristics, discounted cash flows or other pricing characteristics are used to estimate fair values and the securities are then classified as level 2.

Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The Company estimates fair value based on quoted market prices for similar loans in the secondary market and is classified as level 2.

Interest rate swap derivatives—The Company's derivative instruments are limited to interest rate swaps that may be accounted for as fair value hedges or non-designated hedges. The fair values of the swaps incorporate credit valuation adjustments in order to appropriately reflect nonperformance risk in the fair value measurements. The credit valuation adjustment is the dollar amount of the fair value adjustment related to credit risk and utilizes a probability weighted calculation to quantify the potential loss over the life of the trade. The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying the respective counterparties’ credit spreads to the exposure offset by marketable collateral posted, if any. Certain derivative transactions are executed with counterparties who are large financial institutions ("dealers"). International Swaps and Derivative Association Master Agreements ("ISDA") and Credit Support Annexes ("CSA") are employed for all contracts with dealers. These contracts contain bilateral collateral arrangements. The fair value inputs of these financial instruments are determined using discounted cash flow analysis through the use of third-party models whose significant inputs are readily observable market parameters, primarily yield curves, with appropriate adjustments for liquidity and credit risk, and are classified as level 2.

Mortgage banking derivatives—The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.

The tables below present the financial instruments measured at fair value on a recurring basis as of December 31, 2017 and 2016, on the consolidated statements of financial condition utilizing the hierarchy structure described above:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	168,648	$	—	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		685,230		—		685,230
Municipal securities		—		829		—		829
Loans held for sale		—		4,629		—		4,629
Interest rate swap derivatives		—		12,972		—		12,972
Mortgage banking derivatives		—		—		133		133
Total assets at fair value	$	—	$	872,308	$	133	$	872,441
Liabilities:
Interest rate swap derivatives	$	—	$	3,751	$	—	$	3,751
Mortgage banking derivatives		—		—		7		7
Total liabilities at fair value	$	—	$	3,751	$	7	$	3,758

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	227,160	$	—	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		652,739		—		652,739
Municipal securities		—		3,648		—		3,648
Loans held for sale		—		24,187		—		24,187
Interest rate swap derivatives		—		11,428		—		11,428
Mortgage banking derivatives		—		—		287		287
Total assets at fair value	$	—	$	919,162	$	287	$	919,449
Liabilities:
Interest rate swap derivatives	$	—	$	3,279	$	—	$	3,279
Mortgage banking derivatives		—		—		26		26
Total liabilities at fair value	$	—	$	3,279	$	26	$	3,305

The table below details the changes in level 3 financial instruments during 2017:

		Mortgage banking
		derivatives, net
Balance at December 31, 2016	$	261
Loss included in earnings, net		(135)
Net change in Level 3		(135)
Balance at December 31, 2017	$	126

Fair Value of Financial Instruments Measured on a Non-recurring Basis

Certain assets may be recorded at fair value on a non-recurring basis as conditions warrant. These non-recurring fair value measurements typically result from the application of lower of cost or fair value accounting or a write-down occurring during the period.

The Company records collateral dependent loans that are considered to be impaired at their estimated fair value. A loan is considered impaired when it is probable that the Company will be unable to collect all contractual amounts due in accordance with the terms of the loan agreement. Collateral dependent impaired loans are measured based on the fair value of the collateral. The Company relies on third-party appraisals and internal assessments, utilizing a discount rate in the range of 0% - 25%, in determining the estimated fair values of these loans. The inputs used to determine the fair values of loans are considered level 3 inputs in the fair value hierarchy. At December 31, 2017, the Company measured seven loans not accounted for under ASC 310-30 at fair value on a non-recurring basis with a carrying balance of $7.1 million and specific reserve balance of $1.5 million. At December 31, 2016, the Company measured three loans not accounted for under ASC 310-30 at fair value on a non-recurring basis with a carrying balance of $10.5 million and a specific reserve balance of $2.4 million.

OREO is recorded at the lower of the cost basis or the fair value of the collateral less estimated selling costs. The estimated fair values of OREO are updated periodically and further write-downs may be taken to reflect a new basis. The Company recognized $0.8 million and $0.3 million of OREO impairments in its consolidated statements of operations during 2017 and 2016, respectively. The fair values of OREO are derived from third party price opinions or appraisals that generally use an income approach or a market value approach. If reasonable comparable appraisals are not available, then the Company may use internally developed models to determine fair values. The inputs used to determine the fair values of OREO are considered level 3 inputs in the fair value hierarchy.

The Company may be required to record fair value adjustments on other available-for-sale and municipal securities valued at par on a non-recurring basis.

The tables below provide information regarding the assets recorded at fair value on a non-recurring basis at December 31, 2017 and 2016:

	December 31, 2017
	Total		Losses from fair value changes
Other real estate owned	$	10,491	$	766
Impaired loans		30,873		11,099

	December 31, 2016
	Total		Losses from fair value changes
Other real estate owned	$	15,662	$	154
Impaired loans		38,282		15,200

The Company did not record any liabilities measured at fair value on a non-recurring basis during 2017 and 2016.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 23 Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is determined based upon quoted market prices to the extent possible; however, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques that may be significantly impacted by the assumptions used, including the discount rate and estimates of future cash flows. Changes in any of these assumptions could significantly affect the fair value estimates. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements.

The fair value of financial instruments at December 31, 2017 and 2016, including methods and assumptions utilized for determining fair value of financial instruments, are set forth below:

	Level in fair value	December 31, 2017				December 31, 2016
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	257,364	$	257,364	$	152,736	$	152,736
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		168,648		168,648		227,160		227,160
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		685,230		685,230		652,739		652,739
Municipal securities	Level 2		829		829		3,648		3,648
Municipal securities	Level 3		219		219		265		265
Other available-for-sale securities	Level 3		419		419		419		419
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		204,352		204,048		263,411		264,862
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		54,378		52,723		69,094		67,711
Non-marketable securities	Level 2		15,030		15,030		14,949		14,949
Loans receivable	Level 3		3,178,947		3,167,508		2,860,921		2,879,860
Loans held for sale	Level 2		4,629		4,629		24,187		24,187
Accrued interest receivable	Level 2		14,255		14,255		12,562		12,562
Interest rate swap derivatives	Level 2		12,972		12,972		11,428		11,428
Mortgage banking derivatives	Level 3		133		133		287		287
LIABILITIES
Deposit transaction accounts	Level 2		2,861,509		2,861,509		2,696,603		2,696,603
Time deposits	Level 2		1,118,050		1,118,050		1,172,046		1,172,046
Securities sold under agreements to repurchase	Level 2		130,463		130,463		92,011		92,011
Federal Home Loan Bank advances	Level 2		129,115		130,300		38,665		39,324
Accrued interest payable	Level 2		5,776		5,776		4,973		4,973
Interest rate swap derivatives	Level 2		3,751		3,751		3,279		3,279
Mortgage banking derivatives	Level 3		7		7		187		187

Cash and cash equivalents

Cash and cash equivalents have a short-term nature and the estimated fair value is equal to the carrying value.

Investment securities

The estimated fair value of investment securities is based on quoted market prices or bid quotations received from securities dealers. Other investment securities, including securities that are held for regulatory purposes are carried at cost, less any other than temporary impairment.

Loans receivable

The estimated fair value of the loan portfolio is estimated using a discounted cash flow analysis using a discount rate based on interest rates offered at the respective measurement dates for loans with similar terms to borrowers of similar credit quality. The allowance for loan losses is considered a reasonable estimate of any required adjustment to fair value to reflect the impact of credit risk. The estimates of fair value do not incorporate the exit-price concept prescribed by ASC Topic 820, Fair Value Measurements and Disclosures.

Loans held-for-sale

Loans held-for-sale are carried at an estimated fair value. The portfolio consists primarily of fixed rate residential mortgage loans that are sold within 45 days. The estimated fair value is based on quoted market prices for similar loans in the secondary market and is classified as level 2.

Accrued interest receivable

Accrued interest receivable is of a short-term nature and the estimated fair value is equal to the carrying value.

Deposits

The estimated fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings, NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of interest-bearing time deposits is based on the discounted value of contractual cash flows of such deposits, taking into account the option for early withdrawal. The discount rate is estimated using the rates offered by the Company, at the respective measurement dates, for deposits of similar remaining maturities. The fair value of time deposits has a floor equal to the carrying value as the amount payable on demand would approximate the carrying value.

Derivative assets and liabilities

Fair values for derivative assets and liabilities are fully described in note 20 of the consolidated financial statements.

Securities sold under agreements to repurchase

The vast majority of the Company’s repurchase agreements are overnight transactions that mature the day after the transaction, and as a result of this short-term nature, the estimated fair value is equal to the carrying value.

Accrued interest payable

Accrued interest payable is of a short-term nature and the estimated fair value is equal to the carrying value.

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Subsequent Event

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Note 24 Subsequent Events

On January 1, 2018, the Company completed its acquisition of Peoples, Inc., the bank holding company of Colorado-based Peoples National Bank and Kansas-based Peoples Bank. Immediately following the completion of the acquisition, Peoples National Bank and Peoples Bank merged into NBH Bank. Pursuant to the merger agreement executed in June 2017, the Company paid $36.2 million of cash consideration and 3,398,477 shares of the Company’s Class A common stock in exchange for all of the outstanding common stock of Peoples. Cash paid included $10.0 million placed in escrow for certain potential liabilities the Company is indemnified for pursuant to the merger agreement. The cash paid is included in cash and due from banks in the Company’s consolidated statements of financial condition at December 31, 2017. The transaction has a value of $146.4 million in the aggregate, based on the Company’s closing price of $32.43 on the acquisition date. Acquisition related costs of $2.7 million were included in the Company’s consolidated statements of operations for the year ended December 31, 2017.

The Company determined that this acquisition constitutes a business combination as defined in ASC Topic 805, Business Combinations. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired and liabilities assumed at fair value. The Company determined fair values in accordance with the guidance provided in ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is established by discounting the expected future cash flows with a market discount rate for like maturities and risk instruments. The estimation of expected future cash flows, market conditions and other future events and actual results could differ materially. The determination of the fair values of fixed assets, loans, OREO, core deposit intangible, mortgage servicing rights and mortgage repurchase reserve involves a high degree of judgment and complexity. The Company has made the determination of provisional fair values using the best information available at the time; however, purchase accounting is not complete and the assumptions used are subject to change and, if changed, could have a material effect on the Company's financial position and results of operations.

The table below summarizes the provisional net assets acquired (at fair value) and consideration transferred in connection with the Peoples acquisition:

Assets:
Cash and due from banks	$	105,173
Investment securities available-for-sale		118,553
Non-marketable securities		4,846
Loans		544,233
Loans held for sale		54,260
Other real estate owned		1,436
Premises and equipment		17,931
Core deposit intangible asset		9,839
Mortgage servicing rights		4,233
Other assets		15,740
Total assets acquired	$	876,244
Liabilities:
Total deposits		729,911
Other liabilities		55,973
Total liabilities assumed	$	785,884
Identifiable net assets acquired	$	90,360
Consideration:
NBHC common stock paid at January 1, 2018, closing price of $32.43	$	110,213
Cash		36,189
Total	$	146,402
Estimated goodwill created	$	56,042

In connection with the Peoples acquisition, the Company estimates it will record $56.0 million of goodwill, a $9.8 million core deposit intangible asset, a $4.2 million mortgage servicing rights intangible asset and a $3.8 million mortgage repurchase reserve, included in other liabilities. The core deposit intangible will be amortized straight-line over ten years and the mortgage servicing rights intangible is amortized in proportion to and over the period of the estimated net servicing income. 

The following unaudited pro forma information combines the historical results of Peoples and the Company. The unaudited pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors. The unaudited pro forma information below reflects adjustments made to exclude acquisition-related expenses of the Company and Peoples of $13.1 million during the year ended 2017, estimated amortization and accretion of purchase discounts and premiums of $0.9 million and $0.9 million and estimated amortization of acquired identifiable intangibles of $1.1 million and $1.1 million during the years ended December 31, 2017 and 2016, respectively. The unaudited pro forma information is theoretical in nature and not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations which would have resulted had the Company acquired Peoples during the periods presented.

If the Peoples acquisition had been completed on January 1, 2016, unaudited pro forma total revenue for the Company would have been approximately $263.0 million and $268.1 million for the years ended December 31, 2017 and 2016, respectively. Unaudited pro forma net income for the Company would have been approximately $22.6 million and $34.7 million, respectively, for the same periods. Unaudited pro forma basic and dilutive earnings per share for the Company would have been $0.75 and $0.73 for the year ended December 31, 2017, respectively, and $1.09 and $1.07 for the year ended December 31, 2016, respectively.

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Parent Company Only Financial Statements

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Parent Company Only Financial Statements

Note 25 Parent Company Only Financial Statements

Parent company only financial information for National Bank Holdings Corporation is summarized as follows:

Condensed Statements of Financial Condition

	December 31, 2017		December 31, 2016
ASSETS
Cash and cash equivalents	$	73,873	$	64,691
Investment in subsidiaries		444,445		455,120
Other assets		14,414		16,996
Total assets	$	532,732	$	536,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other liabilities	$	325	$	618
Total liabilities		325		618
Shareholders’ equity		532,407		536,189
Total liabilities and shareholders’ equity	$	532,732	$	536,807

Condensed Statements of Operations

	For the years ended December 31,
	2017		2016		2015
Income
Interest income	$	45	$	24	$	—
Undistributed equity from subsidiaries		(11,192)		(129,956)		(74,131)
Distributions from subsidiaries		28,903		155,353		86,000
Other income		—		—		1,048
Total income		17,756		25,421		12,917
Expenses
Salaries and benefits		3,680		3,529		3,349
Other expenses		3,587		3,578		3,597
Total expenses		7,267		7,107		6,946
Income before income taxes		10,489		18,314		5,971
Income tax (benefit) expense		(4,090)		(4,746)		1,090
Net income	$	14,579	$	23,060	$	4,881

Condensed Statements of Cash Flows

	For the years ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	14,579	$	23,060	$	4,881
Undistributed equity from subsidiaries		11,192		(25,388)		(11,869)
Stock-based compensation expense		3,648		3,492		3,349
Net excess tax (benefit) deficit on stock-based compensation		(4,225)		(2,078)		3,677
Other		6,680		418		(1,042)
Net cash provided by (used in) operating activities		31,874		(496)		(1,004)
Cash flows from investing activities:
Outlay for business combinations		—		—		(9,482)
Dividend payment from subsidiary equity		—		15,353		—
Return of capital from investments in subsidiaries		—		140,000		86,000
Net cash provided by investing activities		—		155,353		76,518
Cash flows from financing activities:
Capital contribution		(5,000)		—		—
Issuance of stock under purchase and equity compensation plans		(8,395)		(6,201)		(952)
Proceeds from exercise of stock options		104		—		160
Settlement of warrants		—		—		(368)
Payment of dividends		(9,401)		(6,131)		(6,711)
Repurchase of shares		—		(93,573)		(175,048)
Net cash used in financing activities		(22,692)		(105,905)		(182,919)
Net increase (decrease) in cash and cash equivalents		9,182		48,952		(107,405)
Cash and cash equivalents at beginning of the year		64,691		15,739		123,144
Cash and cash equivalents at end of the year	$	73,873	$	64,691	$	15,739

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Quarterly Results of Operations

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results of Operations

Note 26 Quarterly Results of Operations (unaudited)

The following is a summary of quarterly results:

	December 31, 2017
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	41,889	$	42,579	$	41,213	$	38,740	$	164,421
Interest expense		4,976		4,681		4,440		4,018		18,115
Net interest income before provision for loan losses		36,913		37,898		36,773		34,722		146,306
Provision for loan losses		3,272		3,880		4,025		1,795		12,972
Net interest income after provision for loan losses		33,641		34,018		32,748		32,927		133,334
Non-interest income		8,883		9,551		12,075		8,696		39,205
Non-interest expense		34,028		34,605		33,439		34,605		136,677
Income before income taxes		8,496		8,964		11,384		7,018		35,862
Income tax expense (benefit)		18,615		1,733		2,175		(1,240)		21,283
Net (loss) income	$	(10,119)	$	7,231	$	9,209	$	8,258	$	14,579
(Loss) income per share-basic	$	(0.37)	$	0.27	$	0.34	$	0.31	$	0.54
(Loss) income per share-diluted	$	(0.37)	$	0.26	$	0.33	$	0.30	$	0.53

	December 31, 2016
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	39,658	$	40,764	$	38,472	$	41,554	$	160,448
Interest expense		3,873		3,700		3,719		3,516		14,808
Net interest income before provision for loan losses		35,785		37,064		34,753		38,038		145,640
Provision for loan losses		1,282		5,293		6,457		10,619		23,651
Net interest income after provision for loan losses		34,503		31,771		28,296		27,419		121,989
Non-interest income		9,992		11,608		10,504		7,923		40,027
Non-interest expense		34,423		33,370		33,314		34,902		136,009
Income before income taxes		10,072		10,009		5,486		440		26,007
Income tax expense		81		1,695		982		189		2,947
Net income	$	9,991	$	8,314	$	4,504	$	251	$	23,060
Income per share-basic	$	0.38	$	0.30	$	0.15	$	0.01	$	0.81
Income per share-diluted	$	0.36	$	0.30	$	0.15	$	0.01	$	0.79

	December 31, 2015
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	43,492	$	42,311	$	42,517	$	43,087	$	171,407
Interest expense		3,563		3,629		3,662		3,608		14,462
Net interest income before provision for loan losses		39,929		38,682		38,855		39,479		156,945
Provision for loan losses		5,423		3,710		1,858		1,453		12,444
Net interest income after provision for loan losses		34,506		34,972		36,997		38,026		144,501
Non-interest income		15,419		3,761		2,747		(479)		21,448
Non-interest expense		42,230		38,677		40,393		36,724		158,024
Income (loss) before income taxes		7,695		56		(649)		823		7,925
Income tax expense (benefit)		4,355		(1,580)		692		(423)		3,044
Net income (loss)	$	3,340	$	1,636	$	(1,341)	$	1,246	$	4,881
Income (loss) per share-basic	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14
Income (loss) per share-diluted	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Acquisition activities

a) Acquisition activities—The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets acquired exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. Fair values are subject to refinement for up to a maximum of one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Adjustments recorded to the acquired assets and liabilities assumed are applied prospectively in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss; therefore, the related ALL is not carried forward at the time of acquisition.

Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). Deposit liabilities and the related depositor relationship intangible assets, known as the core deposit intangible assets, may be exchanged in observable exchange transactions. As a result, the core deposit intangible asset is considered identifiable, because the separability criterion has been met.

Cash and cash equivalents

b) Cash and cash equivalents—Cash and cash equivalents include cash, cash items, amounts due from other banks, amounts due from the Federal Reserve Bank of Kansas City, federal funds sold, and interest-bearing bank deposits and segregated cash held for the acquisition of Peoples, Inc. Refer to note 24 – Subsequent Events of our consolidated financial statements for additional details related to the acquisition.

Investment securities

c) Investment securities—Investment securities may be classified in three categories: trading, available-for-sale or held-to-maturity. Management determines the appropriate classification at the time of purchase and reevaluates the classification at each reporting period. Any sales of available-for-sale securities are for the purpose of executing the Company’s asset/liability management strategy, reducing borrowings, funding loan growth, providing liquidity, or eliminating a perceived credit risk in a specific security. Held-to-maturity securities are carried at amortized cost and the available-for-sale securities are carried at estimated fair value. Unrealized gains or losses on securities available-for-sale are reported as accumulated other comprehensive income (loss) (“AOCI”), a component of shareholders’ equity, net of income tax. Gains and losses realized upon sales of securities are calculated using the specific identification method. Premiums and discounts are amortized to interest income over the estimated lives of the securities. Prepayment experience is periodically evaluated and a determination made regarding the appropriate estimate of the future rates of prepayment. When a change in a bond’s estimated remaining life is necessary, a corresponding adjustment is made in the related premium amortization or discount accretion. Purchases and sales of securities, including any corresponding gains or losses, are recognized on a trade-date basis and a receivable or payable is recognized for pending transaction settlements.

Management evaluates all investments for OTTI on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Impairment is considered to be other-than-temporary if it is likely that all amounts contractually due will not be received for debt securities and when there is no positive evidence indicating that an investment’s carrying amount is recoverable in the near term for equity securities. When impairment is considered other-than-temporary, the cost basis of the security is written down to fair value, with the impairment charge related to credit included in earnings, while the impairment charge related to all other factors is recognized in OCI. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the entire amount of the OTTI is recorded in earnings. In evaluating whether the impairment is temporary or other than temporary, the Company considers, among other things, the severity and duration of the unrealized loss position; adverse conditions specifically related to the security; changes in expected future cash flows; downgrades in the rating of the security by a rating agency; the failure of the issuer to make scheduled interest or principal payments; whether the Company has the intent to sell the security; and whether it is more likely than not that the Company will be required to sell the security.

Non-marketable securities

d) Non-marketable securities—Non-marketable securities include Federal Reserve Bank ("FRB") stock and Federal Home Loan Bank ("FHLB") stock. These securities have been acquired for debt facility or regulatory purposes and are carried at cost.

Loans receivable

e) Loans receivable—Loans receivable include loans originated by the Company and loans that are acquired through acquisitions. Loans originated by the Company are carried at the principal amount outstanding, net of premiums, discounts, unearned income, and deferred loan fees and costs. Loan fees and certain costs of originating loans are deferred and the net amount is amortized over the contractual life of the related loans. Acquired loans are initially recorded at fair value and are accounted for under either ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (see additional information below) or ASC Topic 310, Receivables. Non-refundable loan origination and commitment fees, net of direct costs of originating or acquiring loans, and fair value adjustments for acquired loans, are deferred and recognized over the remaining lives of the related loans in accordance with ASC 310-20.

Acquired loans are recorded at their estimated fair value at the time of acquisition and accounted for under either ASC 310-30 or ASC 310. Estimated fair values of acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, the expected timing of cash flows, classification status, fixed or variable interest rate, term of loan and whether or not the loan is amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Acquired 310-30 loans are grouped together according to similar characteristics such as type of loan, loan purpose, geography, risk rating and underlying collateral and are treated as distinct pools when applying various valuation techniques and, in certain circumstances, for the ongoing monitoring of the credit quality and performance of the pools. Each pool is accounted for as a single loan for which the integrity is maintained throughout the life of the asset. Discounts created when the loans are recorded at their estimated fair values at acquisition are accreted over the remaining term of the loan as an adjustment to the related loan’s yield. Similar to originated loans described below, the accrual of interest income on acquired loans that are not accounted for under ASC 310-30 is discontinued when the collection of principal or interest, in whole or in part, is doubtful.

Interest income on acquired loans that are accounted for under ASC Topic 310 and interest income on loans originated by the Company is accrued and credited to income as it is earned using the interest method based on daily balances of the principal amount outstanding. However, interest is generally not accrued on loans 90 days or more past due, unless they are well secured and in the process of collection. Additionally, in certain situations, loans that are not contractually past due may be placed on non-accrual status due to the continued failure to adhere to contractual payment terms by the borrower coupled with other pertinent factors, such as insufficient collateral value or deficient primary and secondary sources of repayment. Accrued interest receivable is reversed when a loan is placed on non-accrual status and payments received generally reduce the carrying value of the loan. Interest is not accrued while a loan is on non-accrual status and interest income is generally recognized on a cash basis only after payment in full of the past due principal and collection of principal outstanding is reasonably assured. A loan may be placed back on accrual status if all contractual payments have been received, or sooner under certain conditions and collection of future principal and interest payments is no longer doubtful.

In the event of borrower default, the Company may seek recovery in compliance with state lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying or restructuring a loan from its original terms, for economic or legal reasons, to provide a concession to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. Such restructured loans are considered “troubled debt restructurings” and are identified in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Under this guidance, modifications to loans that fall within the scope of ASC 310-30 are not considered troubled debt restructurings, regardless of otherwise meeting the definition of a troubled debt restructuring.

Loans receivable accounted for under ASC 310-30

The Company accounts for and evaluates acquired loans in accordance with the provisions of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. When loans exhibit evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all principal and interest payments in accordance with the terms of the loan agreement, the expected shortfall in future cash flows, as compared to the contractual amount due, is recognized as a non-accretable difference. Any excess of expected cash flows over the acquisition date fair value is known as the accretable yield, and is recognized as accretion income over the life of each pool. Contractual fees not expected to be collected are not included in ASC 310-30 contractual cash flows. Should fees be subsequently collected, the cash flows are accounted for as non 310-30 fee income in the period they are received. Loans that are accounted for under ASC 310-30 that meet the criteria for non-accrual of interest or are accounted for on the cost recovery method at the time of acquisition or subsequent to acquisition, may be considered performing, regardless of whether the client is contractually delinquent, if thetiming and expected cash flows on the loan pool in which the loan is included can be otherwise reasonably estimated and if collection of the new carrying value of such pool is expected.

The expected cash flows of individual loans accounted for under ASC 310-30 are periodically remeasured utilizing the same cash flow methodology used at the time of acquisition and subsequent decreases to the expected cash flows will generally result in a provision for loan losses charge in the Company’s consolidated statements of operations. Any increases to the loan cash flow projections are recognized within the loan’s respective loan pools on a prospective basis through an increase to the pool’s accretion income over its remaining life once any previously recorded provision expense has been reversed. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

Loans held for sale

f) Loans held for sale—The Company has elected to record loans originated and intended for sale in the secondary market at estimated fair value. The Company estimates fair value based on quoted market prices for similar loans in the secondary market. Gains or losses are recognized upon sale and are included as a component of gain on sale of mortgages, net in the consolidated statements of operations. Loans held for sale have primarily been fixed rate single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within 45 days. These loans are generally sold with the mortgage servicing rights released. Under limited circumstances, buyers may have recourse to return a purchased loan to the Company. Recourse conditions may include early payoff, early payment default, breach of representations or warranties, or documentation deficiencies.

The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both "best efforts" and "mandatory delivery" forward loan sale commitments to mitigate the risk of potential increases or decreases in the values of loans that would result from the change in market rates for such loans. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities. They are carried on the consolidated statements of financial condition within other assets or other liabilities and changes in fair value are recorded as a component of gain on sale of mortgages, net in the consolidated statements of operations. The gross gains on loan sales are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

Allowance for loan losses

g) Allowance for loan losses—The allowance for loan losses represents management’s estimate of probable credit losses inherent in loans, including acquired loans to the extent necessary, as of the balance sheet date. The determination of the ALL takes into consideration, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan losses, the estimated loss emergence period, estimated default rates, any declines in cash flow assumptions from acquisition, loan structures, growth factors and other elements that warrant recognition. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the ALL. Such agencies may require the Company to recognize additions to the ALL or increases to adversely graded classified loans based on their judgments about information available to them at the time of their examinations.

The Company uses an internal risk rating system to indicate credit quality in the loan portfolio. The risk rating system is applied to all loans and uses a series of grades, which reflect management’s assessment of the risk attributable to loans based on an analysis of the borrower’s financial condition and ability to meet contractual debt service requirements. Loans that management perceives to have acceptable risk are categorized as “Pass” loans. The “Special Mention” loans represent loans that have potential credit weaknesses that deserve management’s close attention. Special mention loans include borrowers that have potential weaknesses or unwarranted risks that, unless corrected, may threaten the borrower’s ability to meet debt requirements. However, these borrowers are still believed to have the ability to respond to and resolve the financial issues that threaten their financial situation. Loans classified as “Substandard” are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. “Doubtful” loans are loans that management believes the collection of payments in accordance with the terms of the loan agreement is highly questionable and improbable. Loans accounted for under ASC 310-30, despite being 90 days or more past due or internally adversely classified, may be classified as performing upon and subsequent to acquisition, regardless of whether the client is contractually delinquent, if the timing and expected cash flows on the loan pool can be reasonably estimated and if collection of the carrying value of the loan pool loans is reasonably expected. Interest accrual is discontinued on doubtful loans and certain substandard loans that are excluded from ASC 310-30, as is more fully discussed in note 7.

The Company routinely evaluates adversely risk-rated credits for impairment. Impairment, if any, is typically measured for each loan based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flows, the loan’s estimated fair value, or the estimated fair value of the underlying collateral less costs of disposition for collateral dependent loans. General allowances are established for loans with similar characteristics. In this process, general allowance factors are based on an analysis of historical loss and recovery experience, if any, related to originated and acquired loans, as well as certain industry experience, with adjustments made for qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical experience. To the extent that the data supporting such factors has limitations, management’s judgment and experience play a key role in determining the allowance estimates.

Additions to the ALL are made by provisions for loan losses that are charged to operations. The allowance is decreased by charge-offs due to losses and is increased by provisions for loan losses and recoveries. When it is determined that specific loans, or portions thereof, are uncollectible, these amounts are charged off against the ALL. If repayment of the loan is collateral dependent, the fair value of the collateral, less cost to sell, is used to determine charge-off amounts.

The Company maintains an ALL for loans accounted for under ASC 310-30 as a result of impairment to loan pools arising from the periodic re-measurement of these loans. Any impairment in the individual pool is generally recognized in the current period as provision for loan losses. Any improvement in the estimated cash flows, is generally not recognized immediately, but is instead reflected as an adjustment to the related loan pools yield on a prospective basis once any previously recorded impairment has been recaptured.

Premises and equipment

h) Premises and equipment—With the exception of premises and equipment acquired through business combinations, which are initially measured and recorded at fair value, purchased land is stated at cost, and buildings and equipment are carried at cost, including capitalized interest when appropriate, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. The Company generally assigns depreciable lives of 39 years for buildings, 7 to 15 years for building improvements, and 3 to 7 years for equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or remaining lease terms. Maintenance and repairs are charged to non-interest expense as incurred. The Company reviews premises and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposal is less than its carrying amount. In the case of a property that is subject to an operating lease that the Company no longer expects to use, a liability is recorded at the cease-use date equal to the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property, even if the entity does not intend to enter into a sublease. A ratable portion of the sublease allocation is then expensed until the property is subleased. Property and equipment that meet the held-for-sale criteria is recorded at the lower of its carrying amount or fair value less cost to sell and depreciation is ceased.

Goodwill and intangible assets

i) Goodwill and intangible assets—Goodwill is established and recorded if the consideration given during an acquisition transaction exceeds the fair value of the net assets received. Goodwill has an indefinite useful life and is not amortized, but is evaluated annually for potential impairment, or when events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Such events or circumstances may include deterioration in general economic conditions, deterioration in industry or market conditions, an increased competitive environment, a decline in market-dependent multiples or metrics, declining financial performance, entity-specific events or circumstances or a sustained decrease in share price (either in absolute terms or relative to peers). If the Company determines, based upon the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount no additional procedures are performed; however, if the Company determines that it is more likely than not that the fair value of the reporting unit is less than the carrying amount the Company will compare the fair value of the reporting unit to its carrying amount. Any excess of the carrying amount over fair value would indicate a potential impairment and the Company would proceed to perform an additional test to determine whether goodwill has been impaired and calculate the amount of that impairment.

Intangible assets that have finite useful lives, such as core deposit intangibles, are amortized over their estimated useful lives. The Company’s core deposit intangible assets represent the value of the anticipated future cost savings that will result from the acquired core deposit relationships versus an alternative source of funding.

Judgment may be used in assessing goodwill and intangible assets for impairment. Estimates of fair value are based on projections of revenues, operating costs and cash flows of the reporting unit considering historical and anticipated future results, general economic and market conditions, as well as the impact of planned business or operational strategies. The valuations use a combination of present value techniques to measure fair value considering market factors. Additionally, judgment is used in determining the useful lives of finite-lived intangible assets. Adverse changes in the economic environment, operations of the reporting unit, or changes in judgments and projections could result in a significantly different estimate of the fair value of the reporting unit and could result in an impairment of goodwill and/or intangible assets.

Other real estate owned

j) Other real estate owned—OREO consists of property that has been foreclosed on or repossessed by deed in lieu of foreclosure. The assets are initially recorded at the fair value of the collateral less estimated costs to sell, with any initial valuation adjustments charged to the ALL. Subsequent downward valuation adjustments, if any, in addition to gains and losses realized on sales and net operating expenses, are recorded in non-interest expense, while any subsequent write-ups are recorded in non-interest income. Costs associated with maintaining property, such as utilities and maintenance, are charged to expense in the period in which they occur, while costs relating to the development and improvement of property are capitalized to the extent the balance does not exceed fair value. All OREO acquired through acquisition is recorded at fair value, less cost to sell, at the date of acquisition.

Bank-owned life insurance

k) Bank-owned life insurance—The Company purchased or acquired bank-owned life insurance ("BOLI") policies on certain associates of the Company. The Company is the owner and beneficiary of these policies. The BOLI is carried at net realizable value with changes in net realizable value recorded in non-interest income.

Securities purchased under agreements to resell and securities sold under agreements to repurchase

l) Securities purchased under agreements to resell and securities sold under agreements to repurchase—The Company periodically enters into purchases or sales of securities under agreements to resell or repurchase as of a specified future date. The securities purchased under agreements to resell are accounted for as collateralized financing transactions and are reflected as an asset in the consolidated statements of financial condition. The securities pledged by the counterparties are held by a third party custodian and valued daily. The Company may require additional collateral to ensure full collateralization for these transactions. The repurchase agreements are considered financing agreements and the obligation to repurchase assets sold is reflected as a liability in the consolidated statements of financial condition of the Company. The repurchase agreements are collateralized by debt securities that are under the control of the Company.

Stock-based compensation

m) Stock-based compensation—The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation as amended by ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. The Company grants stock-based awards including stock options, restricted stock and performance stock units. Stock option grants are for a fixed number of common shares and are issued at exercise prices which are not less than the fair value of a share of stock at the date of grant. The options vest over a time period stated in each option agreement and may be subject to other performance vesting conditions, which require the related compensation expense to be recorded ratably over the requisite service period starting when such conditions become probable. Restricted stock is granted for a fixed number of shares, the transferability of which is restricted until such shares become vested according to the terms in the award agreement. Restricted shares may have multiple vesting qualifications, which can include time vesting of a set portion of the restricted shares and performance criterion, such as market criteria that are tied to specified market conditions of the Company’s common stock price and performance targets tied to the Company’s earnings per share.

The fair value of stock options is measured using a Black-Scholes model. The fair value of time-based restricted stock awards and performance stock units with performance based vesting criteria is based on the Company’s stock price on the date of grant. The fair value of performance stock units with market based vesting criteria is measured using a Monte Carlo simulation model. Compensation expense for the portion of the awards that contain performance and service vesting conditions is recognized over the requisite service period based on the fair value of the awards on the grant date. Compensation expense for the portion of the awards that contain a market vesting condition is recognized over the derived service period based on the fair value of the awards on the grant date. The amortization of stock-based compensation reflects any estimated forfeitures, and the expense realized in subsequent periods may be adjusted to reflect the actual forfeitures realized. The outstanding stock options primarily carry a maximum contractual term of ten years. To the extent that any award is forfeited, surrendered, terminated, expires, or lapses without being vested or exercised, the shares of stock subject to such award not delivered as a result thereof are again made available for awards under the Plan.

The Company accounts for all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized in the consolidated statements of operations as a component of income tax expense or benefit and are classified as an operating activity within the Company’s consolidated statements of cash flows. The tax effects of exercised, expired or vested awards are treated as discrete items in the reporting period in which they occur and may result in increased volatility in our effective tax rate. Cash paid by the Company when directly withholding shares for tax withholding purposes is classified as a financing activity in the consolidated statements of cash flows.

Prior to the Company’s adoption of ASU 2016-09 during 2016, excess tax benefits were recognized in additional paid-in capital and tax deficiencies were recognized either as an offset to accumulated excess tax benefits, if any, or in the consolidated statements of operations. Excess tax benefits were not recognized until the deduction reduced taxes payable.

Warrants

n) Warrants—The Company issued warrants to certain lead investors in 2009 and 2010. During 2015, the outstanding warrant contracts were modified and recorded at fair value as of the modification date using a Black-Scholes model with the change in fair value reported in the statement of operations as non-interest expense. The awards were classified as equity in the Company’s consolidated statements of financial condition. Prior to the modification, the exercise price and the number of warrants were subject to certain down-round provisions, whereby certain subsequent equity issuances at a price below the existing exercise price would result in a downward adjustment to the exercise price and an increase in the number of warrants, and as a result, the warrants were historically classified as a liability in the Company’s consolidated statements of financial condition with changes in the fair value each period reported in the statements of operations as non-interest expense.

During the first quarter of 2017, the remaining issued warrants were exercised in a non-cash transaction. Refer to the consolidated statements of changes in shareholders’ equity for additional details.

Income taxes

o) Income taxes—The Company and its subsidiaries file U.S. federal and certain state income tax returns on a consolidated basis. Additionally, the Company and its subsidiaries file separate state income tax returns with various state jurisdictions. The provision for income taxes includes the income tax balances of the Company and all of its subsidiaries.

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Deferred tax assets and liabilities are adjusted for the effects of changes in tax rates in the period of change. The Company establishes a valuation allowance when management believes, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized.

The Company recognizes and measures income tax benefits based upon a two-step model: 1) a tax position must be more likely than not to be sustained based solely on its technical merits in order to be recognized; and 2) the benefit is measured as the largest dollar amount of that position that is more likely than not to be sustained upon settlement. The difference between the benefit recognized for a position in this model and the tax benefit claimed on a tax return is treated as an unrecognized tax benefit. The Company recognizes income tax related interest and penalties in other non-interest expense.

Income per share

p) Income per share—The Company applies the two-class method of computing income per share as certain of the Company's restricted shares are entitled to non-forfeitable dividends and are therefore considered to be a class of participating securities. The two-class method allocates income according to dividends declared and participation rights in undistributed income. Basic income per share is computed by dividing income allocated to common shareholders by the weighted average number of common shares outstanding during each period. Diluted income per common share is computed by dividing income allocated to common shareholders by the weighted average common shares outstanding during the period, plus amounts representing the dilutive effect of stock options outstanding, certain unvested restricted shares, warrants to issue common stock, or other contracts to issue common shares (“common stock equivalents”) using the treasury stock method. Common stock equivalents are excluded from the computation of diluted earnings per common share in periods in which they have an anti-dilutive effect.

Derivatives

q) Interest Rate Swap Derivatives—The Company carries all derivatives on the statement of financial condition at fair value. All derivative instruments are recognized as either assets or liabilities depending on the rights or obligations under the contracts. All gains and losses on the derivatives due to changes in fair value are recognized in earnings each period.

The Company offers interest rate swap products to certain of its clients to manage potential changes in interest rates. Each contract between the Company and a client is offset with a contract between the Company and an institutional counterparty, thus minimizing the Company's exposure to rate changes. The Company's portfolio consists of a “matched book,” and as such, changes in fair value of the swap pairs will largely offset in earnings. In accordance with applicable accounting guidance, if certain conditions are met, a derivative may be designated as (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability, or of an unrecognized firm commitment, that are attributable to a particular risk (referred to as a fair value hedge) or (2) a hedge of the exposure to variability in the cash flows of a recognized asset or liability, or of a forecasted transaction, that is attributable to a particular risk (referred to as a cash flow hedge). The Company documents all hedging relationships at the inception of each hedging relationship and uses industry accepted methodologies and ranges to determine the effectiveness of each hedge. The fair value of the hedged item is calculated using the estimated future cash flows of the hedged item and applying discount rates equal to the market interest rate for the hedged item at the inception of the hedging relationship (inception benchmark interest rate plus an inception credit spread), adjusted for changes in the designated benchmark interest rate thereafter.

Treasury stock

r) Treasury stock —When the Company acquires treasury stock, the sum of the consideration paid and direct transaction costs after tax is recognized as a deduction from equity. The cost basis for the reissuance of treasury stock is determined using a first-in, first-out basis. To the extent that the reissuance price is more than the cost basis (gain), the excess is recorded as an increase to additional paid-in capital in the consolidated statements of financial condition. If the reissuance price is less than the cost basis (loss), the difference is recorded to additional paid-in capital to the extent there is a cumulative treasury stock paid-in capital balance. Any loss in excess of the cumulative treasury stock paid-in capital balance is charged to retained earnings.

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Investment Securities - (Tables)

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

Available-for-sale securities are summarized as follows as of the dates indicated:

	December 31, 2017
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	167,269	$	2,371	$	(992)	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		702,107		351		(17,228)		685,230
Municipal securities		1,054		—		(6)		1,048
Other securities		419		—		—		419
Total investment securities available-for-sale	$	870,849	$	2,722	$	(18,226)	$	855,345

	December 31, 2016
	Amortized		Gross		Gross
	cost		unrealized gains		unrealized losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	223,781	$	3,909	$	(530)	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		666,616		2,124		(16,001)		652,739
Municipal securities		3,921		—		(7)		3,914
Other securities		419		—		—		419
Total investment securities available-for-sale	$	894,737	$	6,033	$	(16,538)	$	884,232

Summary of unrealized losses for available-for-sale securities

The tables below summarize the available-for-sale securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	62,178	$	(408)	$	36,086	$	(584)	$	98,264	$	(992)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		162,346		(830)		412,967		(16,398)		575,313		(17,228)
Municipal securities		514		(6)		—		—		514		(6)
Total	$	225,038	$	(1,244)	$	449,053	$	(16,982)	$	674,091	$	(18,226)

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	100,898	$	(530)	$	—	$	—	$	100,898	$	(530)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		137,576		(2,976)		385,707		(13,025)		523,283		(16,001)
Municipal securities		3,058		(7)		—		—		3,058		(7)
Total	$	241,532	$	(3,513)	$	385,707	$	(13,025)	$	627,239	$	(16,538)

Held-to-maturity Securities

Held-to-maturity investment securities are summarized as follows as of the dates indicated:

	December 31, 2017
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	204,352	$	151	$	(455)	$	204,048
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		54,378		—		(1,655)		52,723
Total investment securities held-to-maturity	$	258,730	$	151	$	(2,110)	$	256,771

	December 31, 2016
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	263,411	$	1,685	$	(234)	$	264,862
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		69,094		16		(1,399)		67,711
Total investment securities held-to-maturity	$	332,505	$	1,701	$	(1,633)	$	332,573

Summary of unrealized losses for held-to-maturity securities

The tables below summarize the held-to-maturity securities with unrealized losses as of the dates shown, along with the length of the impairment period:

	December 31, 2017
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	149,182	$	(220)	$	17,506	$	(235)	$	166,688	$	(455)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		6,460		(65)		46,264		(1,590)		52,724		(1,655)
Total	$	155,642	$	(285)	$	63,770	$	(1,825)	$	219,412	$	(2,110)

	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	27,799	$	(234)	$	—	$	—	$	27,799	$	(234)
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		26,992		(357)		32,146		(1,042)		59,138		(1,399)
Total	$	54,791	$	(591)	$	32,146	$	(1,042)	$	86,937	$	(1,633)

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Loans - (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loan Portfolio Composition Including Carrying Value by Segment of Loans Accounted for under ASC Topic 310-30 and Loans Covered by the FDIC Loss Sharing Agreements

At December 31, 2016, $14.4 million of non 310-30 loans were held-for-sale, most of which were in the residential real estate segment. The sale of these loans was completed in connection with the four banking center divestitures in the second quarter of 2017.

	December 31, 2017
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	29,475	$	1,845,130	$	1,874,605	59.0%
Commercial real estate non-owner occupied		77,908		485,141		563,049	17.7%
Residential real estate		12,759		703,478		716,237	22.5%
Consumer		481		24,575		25,056	0.8%
Total	$	120,623	$	3,058,324	$	3,178,947	100.0%

	December 31, 2016
	ASC 310-30 loans		Non 310-30 loans		Total loans		% of total
Commercial	$	39,280	$	1,521,150	$	1,560,430	54.6%
Commercial real estate non-owner occupied		89,150		437,642		526,792	18.4%
Residential real estate		16,524		728,361		744,885	26.0%
Consumer		898		27,916		28,814	1.0%
Total	$	145,852	$	2,715,069	$	2,860,921	100.0%

Past Due Financing Receivables

Delinquency for loans excluded from ASC 310-30 is shown in the following tables at December 31, 2017 and 2016:

	December 31, 2017
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days  past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	554	$	117	$	1,389	$	2,060	$	1,373,962	$	1,376,022	$	150	$	7,767
Owner occupied commercial real estate		696		—		1,983		2,679		270,074		272,753		—		3,478
Agriculture		585		—		701		1,286		137,609		138,895		—		2,003
Energy		—		—		1,645		1,645		55,815		57,460		—		1,645
Total commercial		1,835		117		5,718		7,670		1,837,460		1,845,130		150		14,893
Commercial real estate non-owner occupied:
Construction		—		—		179		179		107,502		107,681		—		179
Acquisition/development		1,097		—		—		1,097		13,318		14,415		—		—
Multifamily		—		—		—		—		26,947		26,947		—		—
Non-owner occupied		56		—		574		630		335,468		336,098		—		605
Total commercial real estate		1,153		—		753		1,906		483,235		485,141		—		784
Residential real estate:
Senior lien		1,167		885		1,396		3,448		643,034		646,482		—		4,724
Junior lien		233		91		41		365		56,631		56,996		—		459
Total residential real estate		1,400		976		1,437		3,813		699,665		703,478		—		5,183
Consumer		157		6		5		168		24,407		24,575		—		140
Total loans excluded from ASC 310-30	$	4,545	$	1,099	$	7,913	$	13,557	$	3,044,767	$	3,058,324	$	150	$	21,000

	December 31, 2016
					Greater						Total		Loans > 90
	30-59		60-89		than 90						non		days past
	days past		days past		days past		Total  past				310-30		due and		Non-
	due		due		due		due		Current		loans		still accruing		accrual
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	3,134	$	4,009	$	1,078	$	8,221	$	1,066,475	$	1,074,696	$	—	$	8,688
Owner occupied commercial real estate		583		216		56		855		220,689		221,544		—		2,056
Agriculture		501		—		—		501		134,136		134,637		—		1,905
Energy		2		—		6,548		6,550		83,723		90,273		—		12,645
Total commercial		4,220		4,225		7,682		16,127		1,505,023		1,521,150		—		25,294
Commercial real estate non-owner occupied:
Construction		—		—		—		—		90,314		90,314		—		—
Acquisition/development		—		—		—		—		13,306		13,306		—		—
Multifamily		—		—		—		—		24,954		24,954		—		—
Non-owner occupied		—		—		28		28		309,040		309,068		—		66
Total commercial real estate		—		—		28		28		437,614		437,642		—		66
Residential real estate:
Senior lien		888		645		1,458		2,991		672,699		675,690		—		4,522
Junior lien		115		61		22		198		52,473		52,671		—		654
Total residential real estate		1,003		706		1,480		3,189		725,172		728,361		—		5,176
Consumer		83		8		—		91		27,825		27,916		—		181
Total loans excluded from ASC 310-30	$	5,306	$	4,939	$	9,190	$	19,435	$	2,695,634	$	2,715,069	$	—	$	30,717

Credit Exposure for Loans as Determined by Company's Internal Risk Rating System

Credit exposure for all loans as determined by the Company’s internal risk rating system was as follows at December 31, 2017 and 2016:

	December 31, 2017
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,349,116	$	10,829	$	14,824	$	1,253	$	1,376,022
Owner occupied commercial real estate		250,224		17,030		5,424		75		272,753
Agriculture		118,068		18,824		1,870		133		138,895
Energy		55,814		—		1,646		—		57,460
Total commercial		1,773,222		46,683		23,764		1,461		1,845,130
Commercial real estate non-owner occupied:
Construction		107,502		—		179		—		107,681
Acquisition/development		14,415		—		—		—		14,415
Multifamily		24,817		—		2,130		—		26,947
Non-owner occupied		333,225		1,396		1,477		—		336,098
Total commercial real estate		479,959		1,396		3,786		—		485,141
Residential real estate:
Senior lien		641,294		91		5,097		—		646,482
Junior lien		56,172		—		824		—		56,996
Total residential real estate		697,466		91		5,921		—		703,478
Consumer		24,432		1		142		—		24,575
Total loans excluded from ASC 310-30	$	2,975,079	$	48,171	$	33,613	$	1,461	$	3,058,324
Loans accounted for under ASC 310-30:
Commercial	$	23,954	$	1,070	$	4,451	$	—	$	29,475
Commercial real estate non-owner occupied		50,537		883		26,488		—		77,908
Residential real estate		10,072		1,055		1,632		—		12,759
Consumer		327		9		145		—		481
Total loans accounted for under ASC 310-30	$	84,890	$	3,017	$	32,716	$	—	$	120,623
Total loans	$	3,059,969	$	51,188	$	66,329	$	1,461	$	3,178,947

	December 31, 2016
			Special
	Pass		mention		Substandard		Doubtful		Total
Loans excluded from ASC 310-30:
Commercial:
Commercial and industrial	$	1,041,326	$	7,243	$	25,636	$	491	$	1,074,696
Owner occupied commercial real estate		202,036		9,371		10,137		—		221,544
Agriculture		123,809		8,922		1,906		—		134,637
Energy		77,619		—		7,811		4,843		90,273
Total commercial		1,444,790		25,536		45,490		5,334		1,521,150
Commercial real estate non-owner occupied:
Construction		90,099		—		215		—		90,314
Acquisition/development		10,758		2,548		—		—		13,306
Multifamily		22,495		238		2,221		—		24,954
Non-owner occupied		300,922		5,895		2,251		—		309,068
Total commercial real estate		424,274		8,681		4,687		—		437,642
Residential real estate:
Senior lien		669,148		1,215		5,316		11		675,690
Junior lien		51,250		178		1,243		—		52,671
Total residential real estate		720,398		1,393		6,559		11		728,361
Consumer		27,669		59		188		—		27,916
Total loans excluded from ASC 310-30	$	2,617,131	$	35,669	$	56,924	$	5,345	$	2,715,069
Loans accounted for under ASC 310-30:
Commercial	$	27,436	$	610	$	11,234	$	—	$	39,280
Commercial real estate non-owner occupied		38,895		967		45,520		3,768		89,150
Residential real estate		12,477		1,327		2,720		—		16,524
Consumer		721		17		160		—		898
Total loans accounted for under ASC 310-30	$	79,529	$	2,921	$	59,634	$	3,768	$	145,852
Total loans	$	2,696,660	$	38,590	$	116,558	$	9,113	$	2,860,921

Schedule Of Impaired Financing Receivable With And Without Related Allowance

Additional information regarding impaired loans at December 31, 2017 and 2016 is set forth in the table below:

	December 31, 2017						December 31, 2016
					Allowance						Allowance
	Unpaid				for loan		Unpaid				for loan
	principal		Recorded		losses		principal		Recorded		losses
	balance		investment		allocated		balance		investment		allocated
With no related allowance recorded:
Commercial:
Commercial and industrial	$	6,481	$	5,055	$	—	$	8,671	$	7,495	$	—
Owner occupied commercial real estate		4,186		3,934		—		3,350		3,197		—
Agriculture		1,502		1,245		—		2,044		1,987		—
Energy		8,661		3,861		—		17,142		6,105		—
Total commercial		20,830		14,095		—		31,207		18,784		—
Commercial real estate non-owner occupied:
Construction		215		179		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		29		29		—		33		33		—
Non-owner occupied		901		853		—		394		343		—
Total commercial real estate		1,145		1,061		—		427		376		—
Residential real estate:
Senior lien		333		309		—		1,551		1,426		—
Junior lien		—		—		—		54		51		—
Total residential real estate		333		309		—		1,605		1,477		—
Consumer		—		—		—		4		4		—
Total impaired loans with no related allowance recorded	$	22,308	$	15,465	$	—	$	33,243	$	20,641	$	—
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,919	$	5,339	$	1,329	$	3,495	$	3,464	$	492
Owner occupied commercial real estate		873		713		4		957		642		2
Agriculture		2,122		2,083		133		—		—		—
Energy		—		—		—		11,216		6,548		1,866
Total commercial		10,914		8,135		1,466		15,668		10,654		2,360
Commercial real estate non-owner occupied:
Construction		—		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		207		200		1		261		255		1
Total commercial real estate		207		200		1		261		255		1
Residential real estate:
Senior lien		6,481		5,753		24		5,646		5,016		31
Junior lien		1,295		1,179		8		1,781		1,532		14
Total residential real estate		7,776		6,932		32		7,427		6,548		45
Consumer		146		141		1		188		184		2
Total impaired loans with a related allowance recorded	$	19,043	$	15,408	$	1,500	$	23,544	$	17,641	$	2,408
Total impaired loans	$	41,351	$	30,873	$	1,500	$	56,787	$	38,282	$	2,408

Schedule of Impaired Financing Receivable, Average Recorded Investment and Interest Income Recognized

The table below shows additional information regarding the average recorded investment and interest income recognized on impaired loans for the periods presented:

	For the years ended
	December 31, 2017				December 31, 2016				December 31, 2015
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	5,609	$	152	$	7,909	$	252	$	5,049	$	266
Owner occupied commercial real estate		4,155		80		3,249		92		2,221		83
Agriculture		1,422		244		1,830		—		1,961		—
Energy		8,004		156		12,565		—		5,679		—
Total Commercial		19,190		632		25,553		344		14,910		349
Commercial real estate non-owner occupied:
Construction		—		—		—		—		188		—
Acquisition/development		—		—		—		—		—		—
Multifamily		—		—		—		—		—		—
Non-owner occupied		878		22		368		22		157		—
Total commercial real estate		878		22		368		22		345		—
Residential real estate:
Senior lien		326		—		1,466		19		956		15
Junior lien		—		—		54		2		113		—
Total residential real estate		326		—		1,520		21		1,069		15
Consumer		—		—		4		—		—		—
Total impaired loans with no related allowance recorded	$	20,394	$	654	$	27,445	$	387	$	16,324	$	363
With a related allowance recorded:
Commercial:
Commercial and industrial	$	7,331	$	—	$	3,545	$	198	$	6,273	$	1
Owner occupied commercial real estate		747		20		703		20		1,230		27
Agriculture		2,092		5		162		5		276		4
Energy		—		—		10,008		—		3,092		—
Total Commercial		10,170		25		14,418		223		10,871		32
Commercial real estate non-owner occupied:
Construction		188		—		—		—		—		—
Acquisition/development		—		—		—		—		—		—
Multifamily		30		1		34		2		60		1
Non-owner occupied		213		9		268		13		1,667		48
Total commercial real estate		431		10		302		15		1,727		49
Residential real estate:
Senior lien		5,986		67		5,200		88		5,911		119
Junior lien		1,225		42		1,600		56		1,725		51
Total residential real estate		7,211		109		6,800		144		7,636		170
Consumer		163		—		196		—		92		1
Total impaired loans with a related allowance recorded	$	17,975	$	144	$	21,716	$	382	$	20,326	$	252
Total impaired loans	$	38,369	$	798	$	49,161	$	769	$	36,650	$	615

Additional Information Related to Accruing TDR's

The tables below provide additional information related to accruing TDRs at December 31, 2017 and 2016:

	December 31, 2017
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	6,595	$	7,308	$	7,171	$	2,041
Commercial real estate non-owner occupied		455		489		500		—
Residential real estate		1,409		1,461		1,420		2
Consumer		1		3		1		—
Total	$	8,460	$	9,261	$	9,092	$	2,043

	December 31, 2016
	Recorded		Average year-to-date		Unpaid		Unfunded commitments
	investment		recorded investments		principal balance		to fund TDRs
Commercial	$	3,302	$	3,440	$	3,464	$	100
Commercial real estate non-owner occupied		538		572		590		—
Residential real estate		1,920		1,996		1,969		2
Consumer		7		9		7		—
Total	$	5,767	$	6,017	$	6,030	$	102

Summary of Company's Carrying Value of Non-Accrual TDR's

The following table summarizes the Company’s carrying value of non-accrual TDRs as of December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Commercial	$	5,808	$	15,265
Commercial real estate non-owner occupied		—		—
Residential real estate		1,336		1,301
Consumer		111		142
Total non-accruing TDRs	$	7,255	$	16,708

Re-Measurement of Loans Accounted for Under ASC Topic 310-30 Resulting in Changes in Carrying Amount of Accretable Yield

The re-measurement of loans accounted for under ASC 310-30 resulted in the following changes in the carrying amount of accretable yield during 2017 and 2016:

	December 31, 2017		December 31, 2016
Accretable yield beginning balance	$	60,476	$	84,194
Reclassification from non-accretable difference		11,398		14,316
Reclassification to non-accretable difference		(2,801)		(4,778)
Accretion		(22,505)		(33,256)
Accretable yield ending balance	$	46,568	$	60,476

Composition of Net Book Value for Loans Accounted for under ASC Topic 310-30

Below is the composition of the net book value for loans accounted for under ASC 310-30 at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Contractual cash flows	$	489,892	$	537,611
Non-accretable difference		(322,701)		(331,283)
Accretable yield		(46,568)		(60,476)
Loans accounted for under ASC 310-30	$	120,623	$	145,852

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Allowance for Loan Losses - (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Summary of Company's Allowance for Loan Losses ("ALL") and Recorded Investment in Loans

The tables below detail the Company’s allowance for loan losses and recorded investment in loans as of and for the years ended December 31, 2017 and 2016:

	Year ended December 31, 2017
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Non 310-30 beginning balance		18,821		5,422		4,387		319		28,949
Charge-offs		(10,342)		—		(236)		(737)		(11,315)
Recoveries		99		20		129		185		433
Provision		12,762		141		(315)		538		13,126
Non 310-30 ending balance		21,340		5,583		3,965		305		31,193
ASC 310-30 beginning balance		—		220		—		5		225
Charge-offs		—		—		—		—		—
Recoveries		—		—		—		—		—
Provision (recoupment)		45		(194)		—		(5)		(154)
ASC 310-30 ending balance		45		26		—		—		71
Ending balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	1,466	$	2	$	32	$	1	$	1,501
Non 310-30 loans collectively evaluated for impairment		19,874		5,581		3,933		304		29,692
ASC 310-30 loans		45		26		—		—		71
Total ending allowance balance	$	21,385	$	5,609	$	3,965	$	305	$	31,264
Loans:
Non 310-30 individually evaluated for impairment	$	22,232	$	1,260	$	7,240	$	141	$	30,873
Non 310-30 collectively evaluated for impairment		1,822,898		483,881		696,238		24,434		3,027,451
ASC 310-30 loans		29,475		77,908		12,759		481		120,623
Total loans	$	1,874,605	$	563,049	$	716,237	$	25,056	$	3,178,947

	Year ended December 31, 2016
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	17,261	$	4,166	$	5,281	$	411	$	27,119
Non 310-30 beginning balance		16,473		3,939		5,245		385		26,042
Charge-offs		(20,684)		(280)		(408)		(771)		(22,143)
Recoveries		89		123		108		274		594
Provision		22,943		1,640		(558)		431		24,456
Non 310-30 ending balance		18,821		5,422		4,387		319		28,949
ASC 310-30 beginning balance		788		227		36		26		1,077
Charge-offs		—		(41)		—		(6)		(47)
Recoveries		—		—		—		—		—
(Recoupment) provision		(788)		34		(36)		(15)		(805)
ASC 310-30 ending balance		—		220		—		5		225
Ending balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Ending allowance balance attributable to:
Non 310-30 loans individually evaluated for impairment	$	2,360	$	1	$	46	$	2	$	2,409
Non 310-30 loans collectively evaluated for impairment		16,461		5,421		4,341		317		26,540
ASC 310-30 loans		—		220		—		5		225
Total ending allowance balance	$	18,821	$	5,642	$	4,387	$	324	$	29,174
Loans:
Non 310-30 individually evaluated for impairment	$	29,411	$	631	$	7,346	$	188	$	37,576
Non 310-30 collectively evaluated for impairment		1,491,739		437,011		721,015		27,728		2,677,493
ASC 310-30 loans		39,280		89,150		16,524		898		145,852
Total loans	$	1,560,430	$	526,792	$	744,885	$	28,814	$	2,860,921

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of Premises and Equipment

Premises and equipment consisted of the following at December 31, 2017 and 2016:

	December 31, 2017		December 31, 2016
Land	$	28,698	$	29,864
Buildings and improvements		73,703		69,980
Equipment		46,091		42,067
Total premises and equipment, at cost		148,492		141,911
Less: accumulated depreciation and amortization		(54,784)		(46,240)
Premises and equipment, net	$	93,708	$	95,671

Summary of Future Minimum Lease Payments

Below is a summary of future minimum lease payments as of December 31, 2017:

Years ending December 31,	Amount
2018	$	3,158
2019		3,092
2020		2,981
2021		3,091
2022		3,052
Thereafter		12,210
Total	$	27,584

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Other Real Estate Owned - (Tables)

12 Months Ended

Dec. 31, 2017

FDIC Loss-Sharing Related

Summary of Activity in OREO Balances

A summary of the activity in the OREO balances during 2017 and 2016 is as follows:

	For the years ended December 31,
	2017		2016
Beginning balance	$	15,662	$	20,814
Transfers from loan portfolio, at fair value		1,800		6,868
Impairments		(766)		(298)
Sales, net		(6,205)		(11,722)
Ending balance	$	10,491	$	15,662

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Goodwill and Intangible Assets - (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of estimated future amortization expense

The following table shows the estimated future amortization expense as of December 31, 2017:

Years ending December 31,		Amount
2018	$	1,122
2019		135
2020		135
2021		135
2022		79

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Deposits - (Tables)

12 Months Ended

Dec. 31, 2017

Deposits [Abstract]

Summary of Time Deposits Based Upon Contractual Maturity

The following table summarizes the Company’s time deposits by remaining contractual maturity:

Years ending December 31,	Amount
2018	$	684,622
2019		308,139
2020		100,275
2021		7,044
2022		14,389
Thereafter		3,581
Total time deposits	$	1,118,050

Schedule of Interest Expense on Deposits

The Company incurred interest expense on deposits as follows during the periods indicated:

	For the years ended December 31,
	2017		2016		2015
Interest bearing demand deposits	$	445	$	369	$	315
Money market accounts		4,077		3,600		3,372
Savings accounts		1,481		1,016		837
Time deposits		10,169		8,978		9,085
Total	$	16,172	$	13,963	$	13,609

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Repurchase Agreements [Abstract]

Schedule of Selected Information Regarding Repurchase Agreements

The following table sets forth selected information regarding repurchase agreements during 2017, 2016 and 2015:

	As of and for the years ended December 31,
	2017		2016		2015
Maximum amount of outstanding agreements at any month end during the period	$	130,463	$	154,404	$	288,591
Average amount outstanding during the period	$	88,390	$	109,246	$	197,726
Weighted average interest rate for the period		0.19%		0.14%		0.09%

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Regulatory Capital - (Tables)

12 Months Ended

Dec. 31, 2017

Dec. 31, 2016

FDIC Loss-Sharing Related

Capital Ratio Requirements under Prompt Corrective Action or Other Regulatory Requirements

	December 31, 2017
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	9.8%	$	470,877	N/A		N/A	4.0%	$	191,559
NBH Bank	8.1%		382,918	5.0%	$	237,772	4.0%		190,217
Common equity tier 1 risk-based capital:
Consolidated	12.9%	$	470,877	N/A		N/A	7.0%	$	335,228
NBH Bank	10.6%		382,918	6.5%	$	309,103	7.0%		332,881
Tier 1 risk-based capital ratio:
Consolidated	12.9%	$	470,877	N/A		N/A	8.5%	$	309,400
NBH Bank	10.6%		382,918	8.0%	$	289,022	8.5%		307,086
Total risk-based capital ratio:
Consolidated	13.8%	$	502,917	N/A		N/A	10.5%	$	382,200
NBH Bank	11.5%		414,958	10.0%	$	361,277	10.5%		379,341

	December 31, 2016
				Required to be			Required to be
				well capitalized under			considered
				prompt corrective			adequately
	Actual			action provisions			capitalized(1)
	Ratio	Amount		Ratio	Amount		Ratio	Amount
Tier 1 leverage ratio:
Consolidated	10.4%	$	470,259	N/A		N/A	4.0%	$	181,019
NBH Bank	8.6%		389,189	4.5%	$	202,903	4.0%		180,358
Common equity tier 1 risk-based capital:
Consolidated	14.2%	$	470,259	N/A		N/A	7.0%	$	316,784
NBH Bank	11.8%		389,189	6.5%	$	293,082	7.0%		315,627
Tier 1 risk-based capital ratio:
Consolidated	14.2%	$	470,259	N/A		N/A	8.5%	$	282,578
NBH Bank	11.8%		389,189	8.0%	$	264,596	8.5%		281,133
Total risk-based capital ratio:
Consolidated	15.0%	$	499,759	N/A		N/A	10.5%	$	349,067
NBH Bank	12.7%		418,689	10.0%	$	330,745	10.5%		347,282

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Stock-based Compensation and Benefits - (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of weighted average assumptions using Black-Scholes option-pricing model

Below are the weighted average assumptions used in the Black-Scholes option pricing model to determine fair value of the Company’s stock options granted in 2017, 2016 and 2015:

	2017		2016		2015
Weighted average fair value	$	7.84	$	4.24	$	4.37
Weighted average risk-free interest rate (1)		2.14%		1.47%		1.59%
Expected volatility (2)		21.61%		22.47%		23.87%
Expected term (years) (3)		6.09		6.09		6.01
Dividend yield (4)		0.83%		1.02%		1.05%

(1)	The risk-free rate for the expected term of the options was based on the U.S. Treasury yield curve at the date of grant and based on the expected term.
(2)	Expected volatility was calculated using a time-based weighted migration of the Company’s own stock price volatility coupled with those of a peer group of eight comparable publicly traded companies for a period commensurate with the expected term of the options.
(3)	The expected term was estimated to be the average of the contractual vesting term and time to expiration.
(4)	The dividend yield was assumed to be $0.05 per share per quarter through the third quarter of 2016, $0.07 per share per quarter through the first quarter of 2017 and $0.09 per share per quarter through the fourth quarter of 2017 in accordance with the Company’s dividend policy at the time of grant.

Summary of Option Activity

The following table summarizes stock option activity for 2017:

				Weighted
				average
		Weighted		remaining
		average		contractual	Aggregate
		exercise		term in	intrinsic
	Options	price		years	value
Outstanding at December 31, 2016	2,185,922	$	19.81	4.85	$	7,753
Granted	100,401		33.98
Exercised	(658,371)		19.91
Forfeited	(29,634)		19.82
Outstanding at December 31, 2017	1,598,318	$	20.62	4.07	$	19,017
Options exercisable at December 31, 2017	1,372,300	$	19.82	3.35	$	17,306
Options vested and expected to vest	1,581,184	$	20.54	4.02	$	18,924

Summary of outstanding stock options

The following table summarizes the Company’s outstanding stock options:

				Options outstanding				Options exercisable
					Weighted average
				Number	remaining contractual	Weighted average		Number	Weighted average
Range of exercise price				outstanding	life (years)	exercise price		exercisable	exercise price
$	18.00	-	18.99	129,327	5.85	$	18.55	129,145	$	18.55
$	19.00	-	19.99	243,649	7.78	$	19.38	115,278	$	19.31
$	20.00	-	20.99	1,126,549	2.61	$	20.01	1,125,577	$	20.01
$	21.00 and above			98,793	9.14	$	33.42	2,300	$	23.98

Summary of Restricted Stock Activity

The following table summarizes restricted stock and performance stock unit activity during 2017 and 2016:

		Weighted				Weighted
	Restricted	average grant-		Performance		average grant-
	stock shares	date fair value		stock units		date fair value
Unvested at December 31, 2015	836,031	$	15.42	—	$	—
Granted	122,992		19.15	91,342		18.22
Vested	(431,155)		15.78	—		—
Forfeited	(28,597)		18.95	(6,047)		18.22
Unvested at December 31, 2016	499,271		15.82	85,295		18.22
Granted	66,471		33.43	49,758		33.22
Vested	(380,956)		15.40	—		—
Forfeited	(21,229)		18.73	(9,971)		21.78
Unvested at December 31, 2017	163,557	$	22.60	125,082	$	23.90

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Income Per Share - (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Income (Loss) Per Share

The following table illustrates the computation of basic and diluted income per share for 2017, 2016 and 2015:

	For the years ended December 31,
	2017		2016		2015
Net income	$	14,579	$	23,060	$	4,881
Less: income allocated to participating securities		(56)		(52)		(53)
Income allocated to common shareholders	$	14,523	$	23,008	$	4,828
Weighted average shares outstanding for basic income per common share		26,928,763		28,313,061		34,349,996
Dilutive effect of equity awards		772,392		704,831		9,321
Dilutive effect of warrants		8,504		73,451		4,170
Weighted average shares outstanding for diluted income per common share		27,709,659		29,091,343		34,363,487
Basic income per share	$	0.54	$	0.81	$	0.14
Diluted income per share	$	0.53	$	0.79	$	0.14

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

Total income taxes for 2017, 2016 and 2015 were allocated as follows:

	For the years ended December 31,
	2017		2016		2015
Current expense:
U.S. federal	$	1,230	$	1,868	$	3,536
State and local		169		117		311
Total current income tax expense		1,399		1,985		3,847
Deferred expense (benefit):
U.S. federal		17,639		626		(710)
State and local		2,245		336		(93)
Total deferred income tax expense (benefit)		19,884		962		(803)
Income tax expense	$	21,283	$	2,947	$	3,044

Components of Tax Rate Reconciliation

The reconciliation between the income tax expenses and the amounts computed by applying the U.S. federal income tax rate to pretax income is as follows:

	For the years ended December 31,
	2017		2016		2015
Income tax at federal statutory rate (35%)	$	12,550	$	9,103	$	2,774
State income taxes, net of federal benefits		265		295		142
Tax-exempt loan interest income		(5,380)		(3,798)		(2,568)
Bank-owned life insurance income		(813)		(724)		(576)
Stock-based compensation		(3,998)		(2,002)		3,520
Federal and state deferred tax rate change		18,457		—		—
Warrant valuation		—		—		37
Bargain purchase gain		—		—		(367)
Other		202		73		82
Income tax expense	$	21,283	$	2,947	$	3,044

Significant Components of Deferred Taxes

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below:

	December 31, 2017		December 31, 2016
Deferred tax assets:
Excess tax basis of acquired loans over carrying value	$	1,887	$	5,865
Allowance for loan losses		7,354		11,063
Intangible assets		6,367		12,279
Other real estate owned		228		—
Accrued stock-based compensation		3,098		7,429
Accrued compensation		2,431		3,296
Capitalized start-up costs		2,488		4,554
Accrued expenses		1,227		2,218
Net deferred loan fees		622		1,198
Net operating loss		1,027		2,177
Federal tax credits		5,891		1,888
Net unrealized losses on investment securities		2,307		1,082
Other		993		1,526
Total deferred tax assets		35,920		54,575
Deferred tax liabilities:
Premises and equipment		(113)		(937)
Other real estate owned		—		(426)
Prepaid expenses		(177)		(402)
Total deferred tax liabilities		(290)		(1,765)
Net deferred tax asset	$	35,630	$	52,810

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Derivatives - (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

Information about the valuation methods used to measure fair value is provided in note 22.

		Asset derivatives fair value					Liability derivatives fair value
	Balance Sheet	December 31,		December 31,		Balance Sheet	December 31,		December 31,
	location	2017		2016		location	2017		2016
Derivatives designated as hedging instruments:
Interest rate products	Other assets	$	10,489	$	9,528	Other liabilities	$	1,167	$	1,381
Total derivatives designated as hedging instruments		$	10,489	$	9,528		$	1,167	$	1,381
Derivatives not designated as hedging instruments:
Interest rate products	Other assets	$	2,483	$	1,900	Other liabilities	$	2,584	$	1,898
Interest rate lock commitments	Other assets		128		149	Other liabilities		—		6
Forward contracts	Other assets		5		138	Other liabilities		7		20
Total derivatives not designated as hedging instruments		$	2,616	$	2,187		$	2,591	$	1,924

Derivative Instruments, Gain (Loss)

The tables below present the effect of the Company’s derivative financial instruments in the consolidated statements of operations for 2017 and 2016:

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives in fair value	recognized in income on	For the years ended December 31,
hedging relationships	derivatives	2017		2016
Interest rate products	Other non-interest income	$	1,177	$	8,183
Total		$	1,177	$	8,183

	Location of gain (loss)	Amount of gain or (loss) recognized in income on hedged items
	recognized in income on	For the years ended December 31,
Hedged items	hedged items	2017		2016
Interest rate products	Other non-interest income	$	(2,172)	$	(7,890)
Total		$	(2,172)	$	(7,890)

	Location of gain (loss)	Amount of gain or (loss) recognized in income on derivatives
Derivatives not designated	recognized in income on	For the years ended December 31,
as hedging instruments	derivatives	2017		2016
Interest rate products	Other non-interest expense	$	104	$	129
Interest rate lock commitments	Gain on sale of mortgages, net		(13)		142
Forward contracts	Gain on sale of mortgages, net		(120)		118
Total		$	(29)	$	389

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Total Unfunded Commitments

Total unfunded commitments at December 31, 2017 and 2016 were as follows:

	December 31, 2017		December 31, 2016
Commitments to fund loans	$	181,904	$	149,391
Unfunded commitments under lines of credit		498,857		452,851
Commercial and standby letters of credit		7,185		13,532
Total unfunded commitments	$	687,946	$	615,774

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Fair Value Measurements - (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Tables of Financial Instruments Measured At Fair Value on Recurring Basis

The tables below present the financial instruments measured at fair value on a recurring basis as of December 31, 2017 and 2016, on the consolidated statements of financial condition utilizing the hierarchy structure described above:

	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	168,648	$	—	$	168,648
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		685,230		—		685,230
Municipal securities		—		829		—		829
Loans held for sale		—		4,629		—		4,629
Interest rate swap derivatives		—		12,972		—		12,972
Mortgage banking derivatives		—		—		133		133
Total assets at fair value	$	—	$	872,308	$	133	$	872,441
Liabilities:
Interest rate swap derivatives	$	—	$	3,751	$	—	$	3,751
Mortgage banking derivatives		—		—		7		7
Total liabilities at fair value	$	—	$	3,751	$	7	$	3,758

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities available-for-sale:
Mortgage-backed securities (“MBS”):
Residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises	$	—	$	227,160	$	—	$	227,160
Other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises		—		652,739		—		652,739
Municipal securities		—		3,648		—		3,648
Loans held for sale		—		24,187		—		24,187
Interest rate swap derivatives		—		11,428		—		11,428
Mortgage banking derivatives		—		—		287		287
Total assets at fair value	$	—	$	919,162	$	287	$	919,449
Liabilities:
Interest rate swap derivatives	$	—	$	3,279	$	—	$	3,279
Mortgage banking derivatives		—		—		26		26
Total liabilities at fair value	$	—	$	3,279	$	26	$	3,305

Table of Changes in Level 3 Financial Instruments

The table below details the changes in level 3 financial instruments during 2017:

		Mortgage banking
		derivatives, net
Balance at December 31, 2016	$	261
Loss included in earnings, net		(135)
Net change in Level 3		(135)
Balance at December 31, 2017	$	126

Table of assets recorded at fair value on a non-recurring basis

The tables below provide information regarding the assets recorded at fair value on a non-recurring basis at December 31, 2017 and 2016:

	December 31, 2017
	Total		Losses from fair value changes
Other real estate owned	$	10,491	$	766
Impaired loans		30,873		11,099

	December 31, 2016
	Total		Losses from fair value changes
Other real estate owned	$	15,662	$	154
Impaired loans		38,282		15,200

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Fair Value of Financial Instruments - (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

The fair value of financial instruments at December 31, 2017 and 2016, including methods and assumptions utilized for determining fair value of financial instruments, are set forth below:

	Level in fair value	December 31, 2017				December 31, 2016
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	257,364	$	257,364	$	152,736	$	152,736
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		168,648		168,648		227,160		227,160
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		685,230		685,230		652,739		652,739
Municipal securities	Level 2		829		829		3,648		3,648
Municipal securities	Level 3		219		219		265		265
Other available-for-sale securities	Level 3		419		419		419		419
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		204,352		204,048		263,411		264,862
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		54,378		52,723		69,094		67,711
Non-marketable securities	Level 2		15,030		15,030		14,949		14,949
Loans receivable	Level 3		3,178,947		3,167,508		2,860,921		2,879,860
Loans held for sale	Level 2		4,629		4,629		24,187		24,187
Accrued interest receivable	Level 2		14,255		14,255		12,562		12,562
Interest rate swap derivatives	Level 2		12,972		12,972		11,428		11,428
Mortgage banking derivatives	Level 3		133		133		287		287
LIABILITIES
Deposit transaction accounts	Level 2		2,861,509		2,861,509		2,696,603		2,696,603
Time deposits	Level 2		1,118,050		1,118,050		1,172,046		1,172,046
Securities sold under agreements to repurchase	Level 2		130,463		130,463		92,011		92,011
Federal Home Loan Bank advances	Level 2		129,115		130,300		38,665		39,324
Accrued interest payable	Level 2		5,776		5,776		4,973		4,973
Interest rate swap derivatives	Level 2		3,751		3,751		3,279		3,279
Mortgage banking derivatives	Level 3		7		7		187		187

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Subsequent Events - (Tables) 10K

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Net Assets acquired (at fair value) and consideration transferred

Assets:
Cash and due from banks	$	105,173
Investment securities available-for-sale		118,553
Non-marketable securities		4,846
Loans		544,233
Loans held for sale		54,260
Other real estate owned		1,436
Premises and equipment		17,931
Core deposit intangible asset		9,839
Mortgage servicing rights		4,233
Other assets		15,740
Total assets acquired	$	876,244
Liabilities:
Total deposits		729,911
Other liabilities		55,973
Total liabilities assumed	$	785,884
Identifiable net assets acquired	$	90,360
Consideration:
NBHC common stock paid at January 1, 2018, closing price of $32.43	$	110,213
Cash		36,189
Total	$	146,402
Estimated goodwill created	$	56,042

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Parent Company Only Financial Statements (Tables)

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Statements of Financial Condition

Condensed Statements of Financial Condition

	December 31, 2017		December 31, 2016
ASSETS
Cash and cash equivalents	$	73,873	$	64,691
Investment in subsidiaries		444,445		455,120
Other assets		14,414		16,996
Total assets	$	532,732	$	536,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other liabilities	$	325	$	618
Total liabilities		325		618
Shareholders’ equity		532,407		536,189
Total liabilities and shareholders’ equity	$	532,732	$	536,807

Condensed Statements of Operations

	For the years ended December 31,
	2017		2016		2015
Income
Interest income	$	45	$	24	$	—
Undistributed equity from subsidiaries		(11,192)		(129,956)		(74,131)
Distributions from subsidiaries		28,903		155,353		86,000
Other income		—		—		1,048
Total income		17,756		25,421		12,917
Expenses
Salaries and benefits		3,680		3,529		3,349
Other expenses		3,587		3,578		3,597
Total expenses		7,267		7,107		6,946
Income before income taxes		10,489		18,314		5,971
Income tax (benefit) expense		(4,090)		(4,746)		1,090
Net income	$	14,579	$	23,060	$	4,881

Condensed Statements of Cash Flows

	For the years ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	14,579	$	23,060	$	4,881
Undistributed equity from subsidiaries		11,192		(25,388)		(11,869)
Stock-based compensation expense		3,648		3,492		3,349
Net excess tax (benefit) deficit on stock-based compensation		(4,225)		(2,078)		3,677
Other		6,680		418		(1,042)
Net cash provided by (used in) operating activities		31,874		(496)		(1,004)
Cash flows from investing activities:
Outlay for business combinations		—		—		(9,482)
Dividend payment from subsidiary equity		—		15,353		—
Return of capital from investments in subsidiaries		—		140,000		86,000
Net cash provided by investing activities		—		155,353		76,518
Cash flows from financing activities:
Capital contribution		(5,000)		—		—
Issuance of stock under purchase and equity compensation plans		(8,395)		(6,201)		(952)
Proceeds from exercise of stock options		104		—		160
Settlement of warrants		—		—		(368)
Payment of dividends		(9,401)		(6,131)		(6,711)
Repurchase of shares		—		(93,573)		(175,048)
Net cash used in financing activities		(22,692)		(105,905)		(182,919)
Net increase (decrease) in cash and cash equivalents		9,182		48,952		(107,405)
Cash and cash equivalents at beginning of the year		64,691		15,739		123,144
Cash and cash equivalents at end of the year	$	73,873	$	64,691	$	15,739

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Quarterly Results of Operations (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Summary of Quarterly Results

The following is a summary of quarterly results:

	December 31, 2017
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	41,889	$	42,579	$	41,213	$	38,740	$	164,421
Interest expense		4,976		4,681		4,440		4,018		18,115
Net interest income before provision for loan losses		36,913		37,898		36,773		34,722		146,306
Provision for loan losses		3,272		3,880		4,025		1,795		12,972
Net interest income after provision for loan losses		33,641		34,018		32,748		32,927		133,334
Non-interest income		8,883		9,551		12,075		8,696		39,205
Non-interest expense		34,028		34,605		33,439		34,605		136,677
Income before income taxes		8,496		8,964		11,384		7,018		35,862
Income tax expense (benefit)		18,615		1,733		2,175		(1,240)		21,283
Net (loss) income	$	(10,119)	$	7,231	$	9,209	$	8,258	$	14,579
(Loss) income per share-basic	$	(0.37)	$	0.27	$	0.34	$	0.31	$	0.54
(Loss) income per share-diluted	$	(0.37)	$	0.26	$	0.33	$	0.30	$	0.53

	December 31, 2016
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	39,658	$	40,764	$	38,472	$	41,554	$	160,448
Interest expense		3,873		3,700		3,719		3,516		14,808
Net interest income before provision for loan losses		35,785		37,064		34,753		38,038		145,640
Provision for loan losses		1,282		5,293		6,457		10,619		23,651
Net interest income after provision for loan losses		34,503		31,771		28,296		27,419		121,989
Non-interest income		9,992		11,608		10,504		7,923		40,027
Non-interest expense		34,423		33,370		33,314		34,902		136,009
Income before income taxes		10,072		10,009		5,486		440		26,007
Income tax expense		81		1,695		982		189		2,947
Net income	$	9,991	$	8,314	$	4,504	$	251	$	23,060
Income per share-basic	$	0.38	$	0.30	$	0.15	$	0.01	$	0.81
Income per share-diluted	$	0.36	$	0.30	$	0.15	$	0.01	$	0.79

	December 31, 2015
	Fourth		Third		Second		First
	quarter		quarter		quarter		quarter		Total
Interest and dividend income	$	43,492	$	42,311	$	42,517	$	43,087	$	171,407
Interest expense		3,563		3,629		3,662		3,608		14,462
Net interest income before provision for loan losses		39,929		38,682		38,855		39,479		156,945
Provision for loan losses		5,423		3,710		1,858		1,453		12,444
Net interest income after provision for loan losses		34,506		34,972		36,997		38,026		144,501
Non-interest income		15,419		3,761		2,747		(479)		21,448
Non-interest expense		42,230		38,677		40,393		36,724		158,024
Income (loss) before income taxes		7,695		56		(649)		823		7,925
Income tax expense (benefit)		4,355		(1,580)		692		(423)		3,044
Net income (loss)	$	3,340	$	1,636	$	(1,341)	$	1,246	$	4,881
Income (loss) per share-basic	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14
Income (loss) per share-diluted	$	0.11	$	0.05	$	(0.04)	$	0.03	$	0.14

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Basis of Presentation - (Details)	12 Months Ended
	Dec. 31, 2017 item
Accounting Policies [Abstract]
Number of full service banking offices	85

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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Significant Accounting Policies [Line Items]
Residential mortgage loans held for sale period													45 days
Income tax (benefit) expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	$ 21,283	$ 2,947	$ 3,044
Adjustments for New Accounting Principle, Early Adoption [Member]
Significant Accounting Policies [Line Items]
Income tax (benefit) expense													$ (4,200)	$ 2,100
Buildings [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of the asset													39 years
Maximum
Significant Accounting Policies [Line Items]
Fair values are subject to refinement maximum year													1 year
Maximum | Stock options [Member]
Significant Accounting Policies [Line Items]
Contractual term													10 years
Maximum | Building Improvements [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of the asset													15 years
Maximum | Equipment [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of the asset													7 years
Minimum | Building Improvements [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of the asset													7 years
Minimum | Equipment [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of the asset													3 years

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Investment Securities - (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) security	Dec. 31, 2016 USD ($) security
Investment securities total	$ 1,100,000	$ 1,200,000
Amortized cost	870,849	894,737
Available-for-sale securities	855,345	884,232
Held-to-maturity securities	$ 258,730	$ 332,505
Mortgage-backed securities as percentage of available-for-sale investment portfolio	100.00%
Number of securities | security	87	61
Fair value of available-for-sale securities in an unrealized loss position	$ 674,091	$ 627,239
Fair value of available-for-sale security with OTTI	300
Other than Temporary Impairment Losses, Investments	200
Fair value of available-for-sale investment securities pledged as collateral	$ 334,600	$ 373,700
Estimated weighted average life of the available-for-sale mortgage-backed securities portfolio	3 years 4 months 24 days	3 years 4 months 24 days
Life of the available-for-sale mortgage-backed securities portfolio	3 years 1 month 6 days	3 years 2 months 12 days
Other securities having no contractual maturity date	$ 400
Number of held-to-maturity securities in unrealized loss positions | security	36	15
Fair value of held-to-maturity securities in an unrealized loss position	$ 219,412	$ 86,937
Held-to-maturity investment securities pledged as collateral	$ 142,000	$ 119,200
Estimated weighted average expected life of the held-to-maturity mortgage-backed securities portfolio	3 years 1 month 6 days	3 years 6 months
Life of the held-to-maturity investment portfolio	2 years 9 months 18 days	3 years 2 months 12 days
Municiapl securities maturing witin one year Member
Amortized cost	$ 300
Available-for-sale securities	300
Municipal securities maturing within one to five years [Member]
Amortized cost	200
Available-for-sale securities	200
Municipal securities due within five to ten years [Member]
Amortized cost	500
Available-for-sale securities	500
Other Securities [Member]
Amortized cost	419	$ 419
Available-for-sale securities	$ 419	$ 419

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Investment Securities - (Summary of Available-for-Sale Investment Securities) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	$ 870,849	$ 894,737
Gross unrealized gains	2,722	6,033
Gross unrealized losses	(18,226)	(16,538)
Investment securities available-for-sale (at fair value)	855,345	884,232
Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	167,269	223,781
Gross unrealized gains	2,371	3,909
Gross unrealized losses	(992)	(530)
Investment securities available-for-sale (at fair value)	168,648	227,160
Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	702,107	666,616
Gross unrealized gains	351	2,124
Gross unrealized losses	(17,228)	(16,001)
Investment securities available-for-sale (at fair value)	685,230	652,739
Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	1,054	3,921
Gross unrealized losses	(6)	(7)
Investment securities available-for-sale (at fair value)	1,048	3,914
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	419	419
Investment securities available-for-sale (at fair value)	$ 419	$ 419

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Investment Securities - (Summary of Unrealized Losses) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months Fair Value	$ 225,038	$ 241,532
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(1,244)	(3,513)
12 months or more, Fair Value	449,053	385,707
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(16,982)	(13,025)
Total, Fair Value	674,091	627,239
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	(18,226)	(16,538)
Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months Fair Value	62,178	100,898
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(408)	(530)
12 months or more, Fair Value	36,086
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(584)
Total, Fair Value	98,264	100,898
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	(992)	(530)
Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months Fair Value	162,346	137,576
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(830)	(2,976)
12 months or more, Fair Value	412,967	385,707
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(16,398)	(13,025)
Total, Fair Value	575,313	523,283
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	(17,228)	(16,001)
Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months Fair Value	514	3,058
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(6)	(7)
Total, Fair Value	514	3,058
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	$ (6)	$ (7)

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Investment Securities - (Summary of Held-to-maturity Investment Securities) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities	$ 258,730	$ 332,505
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	151	1,701
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(2,110)	(1,633)
Fair value	256,771	332,573
Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities	204,352	263,411
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	151	1,685
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(455)	(234)
Fair value	204,048	264,862
Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities	54,378	69,094
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain		16
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(1,655)	(1,399)
Fair value	$ 52,723	$ 67,711

XML

Investment Securities - (Summary of Held-to-Maturity Securities, Unrealized Losses) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 months	$ 155,642	$ 54,791
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(285)	(591)
Fair Value, 12 months or more	63,770	32,146
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1,825)	(1,042)
Total Fair Value	219,412	86,937
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	(2,110)	(1,633)
Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 months	149,182	27,799
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(220)	(234)
Fair Value, 12 months or more	17,506
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(235)
Total Fair Value	166,688	27,799
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	(455)	(234)
Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 months	6,460	26,992
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(65)	(357)
Fair Value, 12 months or more	46,264	32,146
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1,590)	(1,042)
Total Fair Value	52,724	59,138
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	$ (1,655)	$ (1,399)

XML

Non-Marketable Securities (Narrative) (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Schedule of Cost-method Investments [Line Items]
Federal Reserve Bank stock	$ 9.2	$ 9.2
FHLB Des Moines Stock [Member]
Schedule of Cost-method Investments [Line Items]
FHLB Stock	$ 5.8	5.2
FHLB San Francisco Stock [Member]
Schedule of Cost-method Investments [Line Items]
FHLB Stock		$ 0.5

XML

Allowance for Loan Losses - (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance For Loan And Lease Losses [Line Items]
Provision (recoupment) for loan losses	$ 12,972	$ 23,651	$ 12,444
Non ASC 310-30 [Member]
Allowance For Loan And Lease Losses [Line Items]
Charge-offs, net	10,900	21,600
Provision (recoupment) for loan losses	13,126	24,456
Non ASC 310-30 [Member] | Energy Loans [Member]
Allowance For Loan And Lease Losses [Line Items]
Charge-offs, net		19,100
Provision (recoupment) for loan losses		18,900
ASC 310-30 [Member]
Allowance For Loan And Lease Losses [Line Items]
Provision (recoupment) for loan losses	(154)	(805)
ASC 310-30 [Member] | Commercial Portfolio Segment [Member]
Allowance For Loan And Lease Losses [Line Items]
Provision (recoupment) for loan losses	$ (194)	$ 788

XML

Loans - Narrative Section (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Fees and cost related to loans	$ 4,300	$ 4,300	$ 6,300
Loans Held for Sale Included in Loans Receivable			14,400
Carrying amount of loan investments	3,178,947	3,178,947	2,860,921
Increase (decrease) in non-accrual loans	3,700
Commercial and Industrial [Member]
Debt Instrument [Line Items]
Decrease related to loans resolved and/or charged-off		2,500
Energy Loans [Member]
Debt Instrument [Line Items]
Decrease related to loans resolved and/or charged-off		7,500
Loans Placed on Accrual		2,200
Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,874,605	1,874,605	1,560,430
Non Accrual [Member]
Debt Instrument [Line Items]
Recorded investment, non-accrual status	21,000	21,000
Increase (decrease) in non-accrual loans		$ 9,700
Percentage increase (decrease) in past due loans		31.60%
Non ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	3,058,324	$ 3,058,324	2,715,069
Allowance for Loan and Lease Losses, Write-offs		11,315	22,143
Non ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,845,130	1,845,130	1,521,150
ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	120,623	120,623	145,852
Allowance for Loan and Lease Losses, Write-offs			47
ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	29,475	29,475	39,280
Total Loans [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	3,178,947	3,178,947	2,860,921
Total Loans [Member] | Non ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	3,058,324	3,058,324	2,715,069
Recorded investment, non-accrual status	21,000	21,000	30,717
Total past due loans	13,557	13,557	19,435
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,376,022	1,376,022	1,074,696
Recorded investment, non-accrual status	7,767	7,767	8,688
Total past due loans	2,060	2,060	8,221
Total Loans [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	57,460	57,460	90,273
Recorded investment, non-accrual status	1,645	1,645	12,645
Total past due loans	1,645	1,645	6,550
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,845,130	1,845,130	1,521,150
Recorded investment, non-accrual status	14,893	14,893	25,294
Total past due loans	7,670	7,670	16,127
Total Loans [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	272,753	272,753	221,544
Recorded investment, non-accrual status	3,478	3,478	2,056
Total past due loans	2,679	2,679	855
Total Loans [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	336,098	336,098	309,068
Recorded investment, non-accrual status	605	605	66
Total past due loans	630	630	28
Total Loans [Member] | ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	120,623	120,623	145,852
Total Loans [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	29,475	29,475	39,280
Total Loans [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	77,908	77,908	89,150
Total Loans [Member] | Substandard [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	66,329	66,329	116,558
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	33,613	33,613	56,924
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	14,824	14,824	25,636
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,646	1,646	7,811
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	23,764	23,764	45,490
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	5,424	5,424	10,137
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,477	1,477	2,251
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	32,716	32,716	59,634
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	4,451	4,451	11,234
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	26,488	26,488	45,520
Total Loans [Member] | Special Mention [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	51,188	51,188	38,590
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	48,171	48,171	35,669
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	10,829	10,829	7,243
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	46,683	46,683	25,536
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	17,030	17,030	9,371
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,396	1,396	5,895
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	3,017	3,017	2,921
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,070	1,070	610
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	883	883	967
Total Loans [Member] | Doubtful [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,461	1,461	9,113
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,461	1,461	5,345
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,253	1,253	491
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments			4,843
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,461	1,461	5,334
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	$ 75	$ 75
Total Loans [Member] | Doubtful [Member] | ASC 310-30 [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments			3,768
Total Loans [Member] | Doubtful [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments			$ 3,768

XML

Loans - Impaired Loans Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Carrying amount of loan investments	$ 3,178,947	$ 2,860,921
Recorded investment of impaired loans	30,873	38,282
Collective related allowance for loan losses for impaired loans	1,500	2,408
Non Accrual [Member]
Debt Instrument [Line Items]
Investment in impaired loans not covered by loan loss, non-accrual status	21,000
Fair Value Of Collateral Pledged [Member]
Debt Instrument [Line Items]
Impaired loans	20,300
Discounted Cash Flows [Member]
Debt Instrument [Line Items]
Impaired loans	2,300
General Reserve [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	8,300
Impaired loans	250
Commercial Loan [Member]
Debt Instrument [Line Items]
Carrying amount of loan investments	1,874,605	$ 1,560,430
Recorded investment of impaired loans	14,100
Commercial and Industrial [Member]
Debt Instrument [Line Items]
Recorded investment of impaired loans	9,000
Energy Loans [Member]
Debt Instrument [Line Items]
Recorded investment of impaired loans	$ 3,900

XML

Loans - (Loan Portfolio Composition Including Carrying Value by Segment of Loans Accounted for under ASC Topic 310-30) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Total Loans	$ 3,178,947	$ 2,860,921
% of Total	100.00%	100.00%
Commercial Loan [Member]
Loans [Line Items]
Total Loans	$ 1,874,605	$ 1,560,430
% of Total	59.00%	54.60%
Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	$ 563,049	$ 526,792
% of Total	17.70%	18.40%
Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	$ 716,237	$ 744,885
% of Total	22.50%	26.00%
Consumer [Member]
Loans [Line Items]
Total Loans	$ 25,056	$ 28,814
% of Total	0.80%	1.00%
ASC 310-30 [Member]
Loans [Line Items]
Total Loans	$ 120,623	$ 145,852
ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	29,475	39,280
ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	77,908	89,150
ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	12,759	16,524
ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	481	898
Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	3,058,324	2,715,069
Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,845,130	1,521,150
Non ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	485,141	437,642
Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	703,478	728,361
Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	$ 24,575	$ 27,916

XML

Loans - (Loan Delinquency) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Total loans	$ 3,178,947	$ 2,860,921
Commercial Loan [Member]
Loans [Line Items]
Total loans	1,874,605	1,560,430
Commercial Real Estate [Member]
Loans [Line Items]
Total loans	563,049	526,792
Residential Real Estate Segment [Member]
Loans [Line Items]
Total loans	716,237	744,885
Consumer [Member]
Loans [Line Items]
Total loans	25,056	28,814
Non ASC 310-30 [Member]
Loans [Line Items]
Total loans	3,058,324	2,715,069
Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total loans	1,845,130	1,521,150
Non ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total loans	485,141	437,642
Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total loans	703,478	728,361
Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total loans	24,575	27,916
ASC 310-30 [Member]
Loans [Line Items]
Total loans	120,623	145,852
ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total loans	29,475	39,280
ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total loans	77,908	89,150
ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total loans	12,759	16,524
ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total loans	481	898
Total Loans [Member]
Loans [Line Items]
Total loans	3,178,947	2,860,921
Total Loans [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total past due loans	13,557	19,435
Current	3,044,767	2,695,634
Total loans	3,058,324	2,715,069
Loans 90 days past due and still accruing	150
Non- accrual	21,000	30,717
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Construction [Member]
Loans [Line Items]
Total past due loans	179
Current	107,502	90,314
Total loans	107,681	90,314
Non- accrual	179
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Acquisition/Development [Member]
Loans [Line Items]
Total past due loans	1,097
Current	13,318	13,306
Total loans	14,415	13,306
Total Loans [Member] | Non ASC 310-30 [Member] | Multifamily [Member]
Loans [Line Items]
Current	26,947	24,954
Total loans	26,947	24,954
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total past due loans	2,060	8,221
Current	1,373,962	1,066,475
Total loans	1,376,022	1,074,696
Loans 90 days past due and still accruing	150
Non- accrual	7,767	8,688
Total Loans [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	2,679	855
Current	270,074	220,689
Total loans	272,753	221,544
Non- accrual	3,478	2,056
Total Loans [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	630	28
Current	335,468	309,040
Total loans	336,098	309,068
Non- accrual	605	66
Total Loans [Member] | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total past due loans	1,906	28
Current	483,235	437,614
Total loans	485,141	437,642
Non- accrual	784	66
Total Loans [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total past due loans	3,448	2,991
Current	643,034	672,699
Total loans	646,482	675,690
Non- accrual	4,724	4,522
Total Loans [Member] | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total past due loans	365	198
Current	56,631	52,473
Total loans	56,996	52,671
Non- accrual	459	654
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total past due loans	7,670	16,127
Current	1,837,460	1,505,023
Total loans	1,845,130	1,521,150
Loans 90 days past due and still accruing	150
Non- accrual	14,893	25,294
Total Loans [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total past due loans	1,286	501
Current	137,609	134,136
Total loans	138,895	134,637
Non- accrual	2,003	1,905
Total Loans [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total past due loans	1,645	6,550
Current	55,815	83,723
Total loans	57,460	90,273
Non- accrual	1,645	12,645
Total Loans [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total past due loans	3,813	3,189
Current	699,665	725,172
Total loans	703,478	728,361
Non- accrual	5,183	5,176
Total Loans [Member] | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total past due loans	168	91
Current	24,407	27,825
Total loans	24,575	27,916
Non- accrual	140	181
Total Loans [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total loans	120,623	145,852
Total Loans [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total loans	77,908	89,150
Total Loans [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total loans	29,475	39,280
Total Loans [Member] | ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total loans	12,759	16,524
Total Loans [Member] | ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total loans	481	898
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member]
Loans [Line Items]
Total past due loans	4,545	5,306
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Commercial Acquisition/Development [Member]
Loans [Line Items]
Total past due loans	1,097
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total past due loans	554	3,134
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	696	583
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	56
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total past due loans	1,153
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total past due loans	1,167	888
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total past due loans	233	115
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total past due loans	1,835	4,220
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total past due loans	585	501
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total past due loans		2
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total past due loans	1,400	1,003
Total Loans [Member] | 30-59 Days Past Due | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total past due loans	157	83
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member]
Loans [Line Items]
Total past due loans	1,099	4,939
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total past due loans	117	4,009
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total past due loans		216
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total past due loans	885	645
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total past due loans	91	61
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total past due loans	117	4,225
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total past due loans	976	706
Total Loans [Member] | 60-89 Days Past Due | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total past due loans	6	8
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member]
Loans [Line Items]
Total past due loans	7,913	9,190
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Commercial Construction [Member]
Loans [Line Items]
Total past due loans	179
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total past due loans	1,389	1,078
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	1,983	56
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total past due loans	574	28
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total past due loans	753	28
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total past due loans	1,396	1,458
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total past due loans	41	22
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total past due loans	5,718	7,682
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total past due loans	701
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total past due loans	1,645	6,548
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total past due loans	1,437	$ 1,480
Total Loans [Member] | Greater than 90 Days Past Due | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total past due loans	5
Non Accrual [Member]
Loans [Line Items]
Non- accrual	$ 21,000

XML

Loans - (Credit Exposure for Loans as Determined by Company's Internal Risk Rating System) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Total Loans	$ 3,178,947	$ 2,860,921
Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,874,605	1,560,430
Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	716,237	744,885
Consumer [Member]
Loans [Line Items]
Total Loans	25,056	28,814
Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	563,049	526,792
Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	3,058,324	2,715,069
Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,845,130	1,521,150
Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	703,478	728,361
Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	24,575	27,916
Non ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	485,141	437,642
ASC 310-30 [Member]
Loans [Line Items]
Total Loans	120,623	145,852
ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	29,475	39,280
ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	12,759	16,524
ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	481	898
ASC 310-30 [Member] | Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	77,908	89,150
Special Mention [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Change in Risk Rating	12,500
Substandard [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Change in Risk Rating	23,300
Doubtful [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Change in Risk Rating	3,900
Total Loans [Member]
Loans [Line Items]
Total Loans	3,178,947	2,860,921
Total Loans [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	3,058,324	2,715,069
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total Loans	1,376,022	1,074,696
Total Loans [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total Loans	138,895	134,637
Total Loans [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total Loans	57,460	90,273
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,845,130	1,521,150
Total Loans [Member] | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	485,141	437,642
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Construction [Member]
Loans [Line Items]
Total Loans	107,681	90,314
Total Loans [Member] | Non ASC 310-30 [Member] | Commercial Acquisition/Development [Member]
Loans [Line Items]
Total Loans	14,415	13,306
Total Loans [Member] | Non ASC 310-30 [Member] | Multifamily [Member]
Loans [Line Items]
Total Loans	26,947	24,954
Total Loans [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total Loans	272,753	221,544
Total Loans [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	336,098	309,068
Total Loans [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	703,478	728,361
Total Loans [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total Loans	646,482	675,690
Total Loans [Member] | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total Loans	56,996	52,671
Total Loans [Member] | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	24,575	27,916
Total Loans [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total Loans	120,623	145,852
Total Loans [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	29,475	39,280
Total Loans [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	77,908	89,150
Total Loans [Member] | ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	12,759	16,524
Total Loans [Member] | ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	481	898
Total Loans [Member] | Pass [Member]
Loans [Line Items]
Total Loans	3,059,969	2,696,660
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	2,975,079	2,617,131
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total Loans	1,349,116	1,041,326
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total Loans	118,068	123,809
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total Loans	55,814	77,619
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,773,222	1,444,790
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	479,959	424,274
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Commercial Construction [Member]
Loans [Line Items]
Total Loans	107,502	90,099
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Commercial Acquisition/Development [Member]
Loans [Line Items]
Total Loans	14,415	10,758
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Multifamily [Member]
Loans [Line Items]
Total Loans	24,817	22,495
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total Loans	250,224	202,036
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	333,225	300,922
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	697,466	720,398
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total Loans	641,294	669,148
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total Loans	56,172	51,250
Total Loans [Member] | Pass [Member] | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	24,432	27,669
Total Loans [Member] | Pass [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total Loans	84,890	79,529
Total Loans [Member] | Pass [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	23,954	27,436
Total Loans [Member] | Pass [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	50,537	38,895
Total Loans [Member] | Pass [Member] | ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	10,072	12,477
Total Loans [Member] | Pass [Member] | ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	327	721
Total Loans [Member] | Special Mention [Member]
Loans [Line Items]
Total Loans	51,188	38,590
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	48,171	35,669
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total Loans	10,829	7,243
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total Loans	18,824	8,922
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	46,683	25,536
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	1,396	8,681
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Commercial Acquisition/Development [Member]
Loans [Line Items]
Total Loans		2,548
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Multifamily [Member]
Loans [Line Items]
Total Loans		238
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total Loans	17,030	9,371
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	1,396	5,895
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	91	1,393
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total Loans	91	1,215
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total Loans		178
Total Loans [Member] | Special Mention [Member] | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	1	59
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total Loans	3,017	2,921
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,070	610
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	883	967
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	1,055	1,327
Total Loans [Member] | Special Mention [Member] | ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	9	17
Total Loans [Member] | Substandard [Member]
Loans [Line Items]
Total Loans	66,329	116,558
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	33,613	56,924
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total Loans	14,824	25,636
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total Loans	1,870	1,906
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total Loans	1,646	7,811
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	23,764	45,490
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Total Commercial Real Estate [Member]
Loans [Line Items]
Total Loans	3,786	4,687
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Commercial Construction [Member]
Loans [Line Items]
Total Loans	179	215
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Multifamily [Member]
Loans [Line Items]
Total Loans	2,130	2,221
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total Loans	5,424	10,137
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	1,477	2,251
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	5,921	6,559
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total Loans	5,097	5,316
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Junior lien
Loans [Line Items]
Total Loans	824	1,243
Total Loans [Member] | Substandard [Member] | Non ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	142	188
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total Loans	32,716	59,634
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	4,451	11,234
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans	26,488	45,520
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans	1,632	2,720
Total Loans [Member] | Substandard [Member] | ASC 310-30 [Member] | Consumer [Member]
Loans [Line Items]
Total Loans	145	160
Total Loans [Member] | Doubtful [Member]
Loans [Line Items]
Total Loans	1,461	9,113
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member]
Loans [Line Items]
Total Loans	1,461	5,345
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Commercial and Industrial [Member]
Loans [Line Items]
Total Loans	1,253	491
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Agriculture [Member]
Loans [Line Items]
Total Loans	133
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Energy Loans [Member]
Loans [Line Items]
Total Loans		4,843
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Commercial Loan [Member]
Loans [Line Items]
Total Loans	1,461	5,334
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Owner-Occupied [Member]
Loans [Line Items]
Total Loans	$ 75
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Residential Real Estate Segment [Member]
Loans [Line Items]
Total Loans		11
Total Loans [Member] | Doubtful [Member] | Non ASC 310-30 [Member] | Senior lien
Loans [Line Items]
Total Loans		11
Total Loans [Member] | Doubtful [Member] | ASC 310-30 [Member]
Loans [Line Items]
Total Loans		3,768
Total Loans [Member] | Doubtful [Member] | ASC 310-30 [Member] | Non Owner-Occupied [Member]
Loans [Line Items]
Total Loans		$ 3,768

XML

Loans - (Additional Information Regarding Impaired Loans) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	$ 22,308	$ 33,243
Recorded investment with no related allowance recorded	15,465	20,641
Unpaid principal balance of impaired loans with an allowance recorded	19,043	23,544
Recorded investment of impaired loans with an allowance recorded	15,408	17,641
Allowance for loan losses allocated with an allowance recorded	1,500	2,408
Unpaid principal balance, Total	41,351	56,787
Recorded investment of impaired loans	30,873	38,282
Loans and Leases Receivable, Allowance	1,500	2,408
Commercial and Industrial [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	6,481	8,671
Recorded investment with no related allowance recorded	5,055	7,495
Unpaid principal balance of impaired loans with an allowance recorded	7,919	3,495
Recorded investment of impaired loans with an allowance recorded	5,339	3,464
Allowance for loan losses allocated with an allowance recorded	1,329	492
Recorded investment of impaired loans	9,000
Agriculture [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	1,502	2,044
Recorded investment with no related allowance recorded	1,245	1,987
Unpaid principal balance of impaired loans with an allowance recorded	2,122
Recorded investment of impaired loans with an allowance recorded	2,083
Allowance for loan losses allocated with an allowance recorded	133
Recorded investment of impaired loans	1,200
Energy Loans [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	8,661	17,142
Recorded investment with no related allowance recorded	3,861	6,105
Unpaid principal balance of impaired loans with an allowance recorded		11,216
Recorded investment of impaired loans with an allowance recorded		6,548
Allowance for loan losses allocated with an allowance recorded		1,866
Recorded investment of impaired loans	3,900
Commercial Loan [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	20,830	31,207
Recorded investment with no related allowance recorded	14,095	18,784
Unpaid principal balance of impaired loans with an allowance recorded	10,914	15,668
Recorded investment of impaired loans with an allowance recorded	8,135	10,654
Allowance for loan losses allocated with an allowance recorded	1,466	2,360
Recorded investment of impaired loans	14,100
Commercial Construction [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	215
Recorded investment with no related allowance recorded	179
Multifamily [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	29	33
Recorded investment with no related allowance recorded	29	33
Owner-Occupied [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	4,186	3,350
Recorded investment with no related allowance recorded	3,934	3,197
Unpaid principal balance of impaired loans with an allowance recorded	873	957
Recorded investment of impaired loans with an allowance recorded	713	642
Allowance for loan losses allocated with an allowance recorded	4	2
Non Owner-Occupied [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	901	394
Recorded investment with no related allowance recorded	853	343
Unpaid principal balance of impaired loans with an allowance recorded	207	261
Recorded investment of impaired loans with an allowance recorded	200	255
Allowance for loan losses allocated with an allowance recorded	1	1
Total Commercial Real Estate [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	1,145	427
Recorded investment with no related allowance recorded	1,061	376
Unpaid principal balance of impaired loans with an allowance recorded	207	261
Recorded investment of impaired loans with an allowance recorded	200	255
Allowance for loan losses allocated with an allowance recorded	1	1
Senior lien
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	333	1,551
Recorded investment with no related allowance recorded	309	1,426
Unpaid principal balance of impaired loans with an allowance recorded	6,481	5,646
Recorded investment of impaired loans with an allowance recorded	5,753	5,016
Allowance for loan losses allocated with an allowance recorded	24	31
Junior lien
Loans [Line Items]
Unpaid principal balance with no related allowance recorded		54
Recorded investment with no related allowance recorded		51
Unpaid principal balance of impaired loans with an allowance recorded	1,295	1,781
Recorded investment of impaired loans with an allowance recorded	1,179	1,532
Allowance for loan losses allocated with an allowance recorded	8	14
Residential Real Estate Segment [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded	333	1,605
Recorded investment with no related allowance recorded	309	1,477
Unpaid principal balance of impaired loans with an allowance recorded	7,776	7,427
Recorded investment of impaired loans with an allowance recorded	6,932	6,548
Allowance for loan losses allocated with an allowance recorded	32	45
Consumer [Member]
Loans [Line Items]
Unpaid principal balance with no related allowance recorded		4
Recorded investment with no related allowance recorded		4
Unpaid principal balance of impaired loans with an allowance recorded	146	188
Recorded investment of impaired loans with an allowance recorded	141	184
Allowance for loan losses allocated with an allowance recorded	$ 1	$ 2

XML

Loans - (Impaired Loans - Average Recorded Investment and Interest Income Recognized) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	$ 20,394	$ 27,445	$ 16,324
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	654	387	363
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	17,975	21,716	20,326
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	144	382	252
Impaired Financing Receivable, Average Recorded Investment	38,369	49,161	36,650
Impaired Financing Receivable, Interest Income, Cash Basis Method	798	769	615
Commercial and Industrial [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	5,609	7,909
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	152	252	266
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	7,331	3,545	6,273
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method		198	1
Owner-Occupied [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	4,155	3,249	2,221
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	80	92	83
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	747	703	1,230
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	20	20	27
Agriculture [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	1,422	1,830	1,961
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	244
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	2,092	162	276
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	5	5	4
Energy Loans [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	8,004	12,565	5,679
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	156
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		10,008	3,092
Commercial Loan [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	19,190	25,553	14,910
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	632	344	349
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	10,170	14,418	10,871
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	25	223	32
Commercial Construction [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment			188
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	188
Multifamily [Member]
Loans [Line Items]
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	30	34	60
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	1	2	1
Non Owner-Occupied [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	878	368	157
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	22	22
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	213	268	1,667
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	9	13	48
Total Commercial Real Estate [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	878	368	345
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method	22	22
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	431	302	1,727
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	10	15	49
Senior lien
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	326	1,466	956
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method		19
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	5,986	5,200	5,911
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	67	88	119
Impaired Financing Receivable, Interest Income, Cash Basis Method			15
Junior lien
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		54	113
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method		2
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	1,225	1,600	1,725
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	42	56	51
Residential Real Estate Segment [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	326	1,520	1,069
Impaired Financing Receivable, with No Related Allowance, Interest Income, Cash Basis Method		21	15
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	7,211	6,800	7,636
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	109	144	170
Consumer [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		4
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	$ 163	$ 196	92
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method			1
Impaired Loans With No Related Allowance Recorded [Member] [Member]
Loans [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment			$ 5,049

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Loans - Troubled Debt Restructuring and Loans Accounted for Under ASC Topic 310-30 Narratives (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Change in Non-accruing TDRs	$ 9.4
Troubled Debt Restructurings [Member]
Debt Instrument [Line Items]
Recorded investment	2.1
Commercial Loan [Member]
Debt Instrument [Line Items]
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 3.2	$ 6.4
Residential [Member]
Debt Instrument [Line Items]
Financing Receivable, Modifications, Subsequent Default, Recorded Investment		$ 0.4

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Loans - (Additional Information Related to Accruing TDR's) (Details) - Accruing TDR [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Recorded investment	$ 8,460	$ 5,767
Average year-to- date recorded investment	9,261	6,017
Unpaid principal balance	9,092	6,030
Unfunded commitments to fund TDRs	2,043	102
Commercial [Member]
Loans [Line Items]
Recorded investment	6,595	3,302
Average year-to- date recorded investment	7,308	3,440
Unpaid principal balance	7,171	3,464
Unfunded commitments to fund TDRs	2,041	100
Commercial Real Estate [Member]
Loans [Line Items]
Recorded investment	455	538
Average year-to- date recorded investment	489	572
Unpaid principal balance	500	590
Residential Real Estate Segment [Member]
Loans [Line Items]
Recorded investment	1,409	1,920
Average year-to- date recorded investment	1,461	1,996
Unpaid principal balance	1,420	1,969
Unfunded commitments to fund TDRs	2	2
Consumer [Member]
Loans [Line Items]
Recorded investment	1	7
Average year-to- date recorded investment	3	9
Unpaid principal balance	$ 1	$ 7

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Loans - (Summary of Company's Carrying Value of Non-Accrual TDR's) (Details) - Non-Accruing TDR [Member] - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Loans [Line Items]
Carrying Value of Non - Accruing TDR's	$ 7,255	$ 16,708
Commercial [Member]
Loans [Line Items]
Carrying Value of Non - Accruing TDR's	5,808	15,265
Residential Real Estate Segment [Member]
Loans [Line Items]
Carrying Value of Non - Accruing TDR's	1,336	1,301
Consumer [Member]
Loans [Line Items]
Carrying Value of Non - Accruing TDR's	$ 111	$ 142

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Loans - (Re-Measurement of Loans Accounted for Under ASC Topic 310-30 Resulting in Changes in Carrying Amount of Accretable Yield) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Accretable yield beginning balance	$ 60,476	$ 84,194
Reclassification from non-accretable difference	11,398	14,316
Reclassification to non-accretable difference	(2,801)	(4,778)
Accretion	(22,505)	(33,256)
Accretable yield ending balance	$ 46,568	$ 60,476

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Loans - (Composition of Net Book Value for Loans Accounted for under ASC Topic 310-30) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Contractual cash flows	$ 489,892	$ 537,611
Non-accretable difference	(322,701)	(331,283)
Accretable yield	(46,568)	(60,476)
Loans accounted for under ASC 310-30	$ 120,623	$ 145,852

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Allowance for Loan Losses - (Summary of Company's Allowance for Loan Losses ("All") and Recorded Investment in Loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 29,174	$ 27,119
Provision (recoupment) for loan losses	12,972	23,651	$ 12,444
Ending balance	31,264	29,174	27,119
Carrying amount of loan investments				$ 3,178,947	$ 2,860,921
Loans	29,174	27,119	27,119	31,264	29,174
Total Loans				3,178,947	2,860,921
Non ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	28,949	26,042
Charge-offs	(11,315)	(22,143)
Recoveries	433	594
Provision (recoupment) for loan losses	13,126	24,456
Ending balance	31,193	28,949	26,042
Ending allowance balance individually evaluated for impairment				1,501	2,409
Ending allowance balance collectively evaluated for impairment				29,692	26,540
Loans individually evaluated for impairment				30,873	37,576
Loans collectively evaluated for impairment				3,027,451	2,677,493
Carrying amount of loan investments				3,058,324	2,715,069
Loans	28,949	26,042	26,042	31,193	28,949
Total Loans				3,058,324	2,715,069
ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	225	1,077
Charge-offs		(47)
Provision (recoupment) for loan losses	(154)	(805)
Ending balance	71	225	1,077
Carrying amount of loan investments				120,623	145,852
Loans	225	1,077	1,077	71	225
Total Loans				120,623	145,852
ASC 310-30 [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	145,852
Ending balance	120,623	145,852
Loans	145,852	145,852		120,623	145,852
Commercial Portfolio Segment [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	18,821	17,261
Ending balance	21,385	18,821	17,261
Carrying amount of loan investments				1,874,605	1,560,430
Loans	18,821	17,261	17,261	21,385	18,821
Total Loans				1,874,605	1,560,430
Commercial Portfolio Segment [Member] | Non ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	18,821	16,473
Charge-offs	(10,342)	(20,684)
Recoveries	99	89
Provision (recoupment) for loan losses	12,762	22,943
Ending balance	21,340	18,821	16,473
Ending allowance balance individually evaluated for impairment				1,466	2,360
Ending allowance balance collectively evaluated for impairment				19,874	16,461
Loans individually evaluated for impairment				22,232	29,411
Loans collectively evaluated for impairment				1,822,898	1,491,739
Loans	18,821	16,473	16,473	21,340	18,821
Commercial Portfolio Segment [Member] | ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance		788
Provision (recoupment) for loan losses	45	(788)
Ending balance	45		788
Loans	45	788	788	45
Commercial Portfolio Segment [Member] | ASC 310-30 [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	39,280
Ending balance	29,475	39,280
Loans	39,280	39,280		29,475	39,280
Non Owner-Occupied [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	5,642	4,166
Ending balance	5,609	5,642	4,166
Carrying amount of loan investments				563,049	526,792
Loans	5,642	4,166	4,166	5,609	5,642
Total Loans				563,049	526,792
Non Owner-Occupied [Member] | Non ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	5,422	3,939
Charge-offs		(280)
Recoveries	20	123
Provision (recoupment) for loan losses	141	1,640
Ending balance	5,583	5,422	3,939
Ending allowance balance individually evaluated for impairment				2	1
Ending allowance balance collectively evaluated for impairment				5,581	5,421
Loans individually evaluated for impairment				1,260	631
Loans collectively evaluated for impairment				483,881	437,011
Loans	5,422	3,939	3,939	5,583	5,422
Non Owner-Occupied [Member] | ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	220	227
Charge-offs		(41)
Provision (recoupment) for loan losses	(194)	34
Ending balance	26	220	227
Loans	220	227	227	26	220
Non Owner-Occupied [Member] | ASC 310-30 [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	89,150
Ending balance	77,908	89,150
Loans	89,150	89,150		77,908	89,150
Residential Portfolio Segment [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,387	5,281
Ending balance	3,965	4,387	5,281
Carrying amount of loan investments				716,237	744,885
Loans	4,387	5,281	5,281	3,965	4,387
Total Loans				716,237	744,885
Residential Portfolio Segment [Member] | Non ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,387	5,245
Charge-offs	(236)	(408)
Recoveries	129	108
Provision (recoupment) for loan losses	(315)	(558)
Ending balance	3,965	4,387	5,245
Ending allowance balance individually evaluated for impairment				32	46
Ending allowance balance collectively evaluated for impairment				3,933	4,341
Loans individually evaluated for impairment				7,240	7,346
Loans collectively evaluated for impairment				696,238	721,015
Loans	4,387	5,245	5,245	3,965	4,387
Residential Portfolio Segment [Member] | ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance		36
Provision (recoupment) for loan losses		(36)
Ending balance			36
Loans		36	36
Residential Portfolio Segment [Member] | ASC 310-30 [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	16,524
Ending balance	12,759	16,524
Loans	16,524	16,524		12,759	16,524
Consumer Loan [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	324	411
Ending balance	305	324	411
Carrying amount of loan investments				25,056	28,814
Loans	324	411	411	305	324
Total Loans				25,056	28,814
Consumer Loan [Member] | Non ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	319	385
Charge-offs	(737)	(771)
Recoveries	185	274
Provision (recoupment) for loan losses	538	431
Ending balance	305	319	385
Ending allowance balance individually evaluated for impairment				1	2
Ending allowance balance collectively evaluated for impairment				304	317
Loans individually evaluated for impairment				141	188
Loans collectively evaluated for impairment				24,434	27,728
Loans	319	385	385	305	319
Consumer Loan [Member] | ASC 310-30 [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	5	26
Charge-offs		(6)
Provision (recoupment) for loan losses	(5)	(15)
Ending balance		5	26
Loans	5	26	$ 26		5
Consumer Loan [Member] | ASC 310-30 [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	898
Ending balance	481	898
Loans	$ 898	$ 898		$ 481	$ 898

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Premises and Equipment (Schedule of Premises and Equipment) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Premises and equipment	$ 148,492	$ 141,911
Less: accumulated depreciation and amortization	(54,784)	(46,240)
Property, Plant and Equipment, Net, Total	93,708	95,671
Land [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	28,698	29,864
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	73,703	69,980
Equipment [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	$ 46,091	$ 42,067

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Premises and Equipment (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 7,600	$ 8,700	$ 10,100
Property, Plant and Equipment, Disposals	$ 2,300	3,500	100
Banking center consolidation related expenses			$ 1,411
Buildings classified as held-for-sale		$ 1,600

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Premises and Equipment (Summary of Future Minimum Lease Payments) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	$ 3,158
2018	3,092
2019	2,981
2020	3,091
2021	3,052
Thereafter	12,210
Total	$ 27,584

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Other Real Estate Owned - (Summary of Activity in OREO Balances) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other Real Estate [Roll Forward]
Balance	$ 15,662	$ 20,814
Transfers from loan portfolio, at fair value	1,800	6,868	$ 4,576
Impairments	(766)	(298)
Sales, net	(6,205)	(11,722)
Balance	$ 10,491	$ 15,662	$ 20,814

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Other Real Estate Owned - (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
FDIC Loss-Sharing Related
Minority interests in OREO which are held by outside banks	$ 700	$ 1,600
Gain on sale of OREO, net	$ 4,150	$ 4,383	$ 2,776

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Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended			36 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets	$ 38,400			$ 38,400
Amortizing the core deposit intangibles (in years)	7 years
Intangible asset amortization	$ 5,300	$ 5,500	$ 5,400
Finite-Lived Intangible Assets, Accumulated Amortization	36,800	31,500		36,800
Goodwill	$ 59,630	$ 59,630		59,630
Goodwill Impairment				$ 0

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Goodwill and Intangible Assets (Summary of Estimated Future Amortization Expense) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Estimated future amortization expense
Intangible amortization expense, 2018	$ 1,122
Intangible amortization expense, 2019	135
Intangible amortization expense, 2020	135
Intangible amortization expense, 2021	135
Intangible amortization expense, 2022	$ 79

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Deposits - (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Total Deposits	$ 3,979,559	$ 3,868,649
Time deposits	1,118,050	1,172,046
Amount of certificates of deposit that meet or exceed insurance limit	$ 140,700	119,700
Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Total Deposits		103,000
Time deposits		$ 51,600

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Deposits - (Summary of Time Deposits Based Upon Contractual Maturity) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deposits [Abstract]
Time Deposit Maturities, Next Twelve Months	$ 684,622
Time Deposit Maturities, Year Two	308,139
Time Deposit Maturities, Year Three	100,275
Time Deposit Maturities, Year Four	7,044
Time Deposit Maturities, Year Five	14,389
Time Deposit Maturities, after Year Five	3,581
Time Deposits, Total	$ 1,118,050	$ 1,172,046

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Deposits - (Schedule of Interest Expense on Deposits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deposits [Abstract]
Interest bearing demand deposits	$ 445	$ 369	$ 315
Money market accounts	4,077	3,600	3,372
Savings accounts	1,481	1,016	837
Time deposits	10,169	8,978	9,085
Interest Expense, Deposits, Total	$ 16,172	$ 13,963	$ 13,609

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Borrowings (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2020	Dec. 31, 2018
Assets Sold under Agreements to Repurchase [Line Items]
Fair value of collateral	$ 5.7	$ 7.0	$ 68.1
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Due Date, Earliest					2018
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Due Date, Last				2020
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	129.1	25.0	25.0
Federal Home Loan Bank of Topeka [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	806.7
Federal Home Loan Bank of Des Moines [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Fair value of collateral	28.1	28.8	41.7
Interest expense related to FHLB advances	$ 1.8	$ 0.7	$ 0.7
Federal Home Loan Bank of Des Moines [Member] | Minimum
Assets Sold under Agreements to Repurchase [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	1.31%
Federal Home Loan Bank of Des Moines [Member] | Maximum
Assets Sold under Agreements to Repurchase [Line Items]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	2.33%
Maturity Overnight [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Average interest rate	0.19%	0.14%	0.09%
Maturity on Demand [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Amount of repurchase agreements	$ 0.0
U.S. Treasury Securities [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Fair value of collateral	$ 136.1	$ 99.1	$ 205.7

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Borrowings (Schedule of Selected Information Regarding Repurchase Agreements) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deposits [Abstract]
Maximum amount of outstanding agreements at any month end during the period	$ 130,463	$ 154,404	$ 288,591
Average amount outstanding during the period	$ 88,390	$ 109,246	$ 197,726
Weighted average interest rate for the period	0.19%	0.14%	0.09%

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Regulatory Capital - (Capital Ratio Requirements under Prompt Corrective Action or Other Regulatory Requirements) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Parent Company [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Leverage Ratio	9.80%	10.40%
Common equity risk-based ratio	12.90%	14.20%
Risk-based capital Ratio	12.90%	14.20%
Total risk-based capital Ratio	13.80%	15.00%
Leverage Amount	$ 470,877	$ 470,259
Common equity risk-based amount	470,877	470,259
Risk-based capital amount	470,877	470,259
Total risk-based capital Amount	$ 502,917	$ 499,759
Required to be considered adequately capitalized Ratio, leverage ratio	4.00%	4.00%
Required to be considered adequately capitalized Ratio, risk-based common equity capital ratio	7.00%	7.00%
Required to be considered adequately capitalized Ratio, risk-based capital ratio	8.50%	8.50%
Required to be considered adequately capitalized Ratio, Total risk-based capital ratio	10.50%	10.50%
Required to be considered adequately capitalized leverage Amount	$ 191,559	$ 181,019
Required to be considered adequately capitalized common equity capital amount	335,228	316,784
Required to be considered adequately capitalized risk-based capital Amount	309,400	282,578
Required to be considered adequately capitalized Total risk-based capital Amount	$ 382,200	$ 349,067
NBH Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Leverage Ratio	8.10%	8.60%
Common equity risk-based ratio	10.60%	11.80%
Risk-based capital Ratio	10.60%	11.80%
Total risk-based capital Ratio	11.50%	12.70%
Leverage Amount	$ 382,918	$ 389,189
Common equity risk-based amount	382,918	389,189
Risk-based capital amount	382,918	389,189
Total risk-based capital Amount	$ 414,958	$ 418,689
Required to be considered well capitalized Ratio, leverage ratio	5.00%	4.50%
Required to be considered adequately capitalized Ratio, risk-based common equity capital ratio	6.50%	6.50%
Required to be considered well capitalized Ratio, risk-based capital ratio	8.00%	8.00%
Required to be considered well capitalized Ratio, Total risk-based capital ratio	10.00%	10.00%
Required to be considered well capitalized leverage Amount	$ 237,772	$ 202,903
Required to be considered well capitalized common equity capital amount	309,103	293,082
Required to be considered well capitalized risk-based capital Amount	289,022	264,596
Required to be considered well capitalized Total risk-based capital Amount	$ 361,277	$ 330,745
Required to be considered adequately capitalized Ratio, leverage ratio	4.00%	4.00%
Required to be considered adequately capitalized Ratio, risk-based common equity capital ratio	7.00%	7.00%
Required to be considered adequately capitalized Ratio, risk-based capital ratio	8.50%	8.50%
Required to be considered adequately capitalized Ratio, Total risk-based capital ratio	10.50%	10.50%
Required to be considered adequately capitalized leverage Amount	$ 190,217	$ 180,358
Required to be considered adequately capitalized common equity capital amount	332,881	315,627
Required to be considered adequately capitalized risk-based capital Amount	307,086	281,133
Required to be considered adequately capitalized Total risk-based capital Amount	$ 379,341	$ 347,282

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FDIC Loss-Sharing Related

12 Months Ended

Dec. 31, 2017

FDIC Loss-Sharing Related

FDIC Loss-Sharing Related

Note 14 FDIC Loss-Sharing Related

During the fourth quarter of 2015, the Bank entered into an early termination agreement with the FDIC, terminating its loss-share agreements. The Bank paid consideration of $15.1 million to the FDIC for the termination of the agreements. Additionally, the Bank recorded a pre-tax gain of $4.9 million in the fourth quarter of 2015, which was recorded in FDIC loss-sharing related income in the consolidated statements of operations. FDIC related income during 2015 was $(15.6) million, mostly driven by FDIC indemnification asset amortization.

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FDIC Loss-Sharing Related (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
FDIC Loss-Sharing Related
Consideration paid for the termination of the agreements with the FDIC	$ 15,100
Gain (loss) on FDIC termination	$ 4,900
FDIC loss-sharing related		$ (15,553)

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Stock-based Compensation and Employee Benefits - (Narrative) (Details) - USD ($)	6 Months Ended	9 Months Ended	12 Months Ended			15 Months Ended	36 Months Ended	69 Months Ended
	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2017	Sep. 30, 2016
NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		5,754,830	5,754,830			5,754,830	5,754,830
Share-based Compensation Arrangement by Share-based Payment Award, Reduction in Number of Shares for Every One Option or Stock Appreciation Right Granted			1
Share-based Compensation Arrangement by Share-based Payment Award, Reduction in Number of Shares for Every One Award Other Than An Option or Stock Appreciation Right Granted			3.25
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.07	$ 0.09
Stock based compensation expense			$ 700,000	$ 700,000	$ 700,000
Unrecognized compensation expense		$ 500,000	$ 500,000			$ 500,000	$ 500,000
Unrecognized compensation cost, weighted-average period, years			2 years
Stock options [Member] | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award Vesting Rights, Percentage							33.33%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)			66,471	122,992
Weighted average grant-date fair value, Granted (in dollars per share)			$ 33.43	$ 19.15
Stock based compensation expense			$ 2,200,000	$ 2,400,000	2,600,000
Market-based stock awards | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)				26,594
Share-based Compensation Arrangement by Share-based Payment Award, Award Performance Period			5 years
Weighted average grant-date fair value, Granted (in dollars per share)			$ 11.28
Unrecognized compensation expense		100,000	$ 100,000			100,000	$ 100,000
Unrecognized compensation cost, weighted-average period, years			1 year 2 months 12 days
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)			49,758	91,342
Weighted average grant-date fair value, Granted (in dollars per share)			$ 33.22	$ 18.22
Stock based compensation expense			$ 800,000	$ 400,000	$ 0
Performance stock units | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)			49,758	91,342
Share-based Compensation Arrangement by Share-based Payment Award, Award Performance Period			3 years
Unrecognized compensation expense		$ 1,600,000	$ 1,600,000			$ 1,600,000	$ 1,600,000
Unrecognized compensation cost, weighted-average period, years			1 year 9 months 18 days
Performance stock units | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member] | EPS target
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of awards based on performance type			60.00%
Weighted average grant-date fair value, Granted (in dollars per share)			$ 34.04
Performance stock units | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member] | TSR target
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of awards based on performance type			40.00%
Weighted average grant-date fair value, Granted (in dollars per share)			$ 32.06
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		400,000	400,000			400,000	400,000
Maximum stock purchases by employees, value			$ 25,000
Maximum stock purchases by employees (in shares)			2,000
Discount on purchase of common stock (as a percent)			90.00%
Offering period for employee stock purchases			6 months
Employees purchased shares under the ESPP (in shares)			11,178	19,178
Shares available for issuance		355,159	355,159			355,159	355,159
Minimum | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Share Based Compensation Arrangement By Share Based Payment Award Options Granted Contractual Term			7 years
Common Stock, Dividends, Per Share, Declared								$ 0.05
Minimum | Restricted Stock [Member] | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Minimum | Performance stock units | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of initial target awards			0.00%
Maximum | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years
Share Based Compensation Arrangement By Share Based Payment Award Options Granted Contractual Term			10 years
Common Stock, Dividends, Per Share, Declared						$ 0.07
Maximum | Restricted Stock [Member] | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Maximum | Performance stock units | NBH Holdings Corp. 2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of initial target awards			150.00%

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Stock-based Compensation and Benefits - (Summary of Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding Options, beginning	2,185,922	2,596,251
Granted, Options	100,401
Forfeited, Options	(29,634)
Exercised, Options	(658,371)
Outstanding Options, ending	1,598,318	2,185,922
Options fully vested and exercisable at end of period, Options	1,372,300
Options expected to vest, Options	1,581,184
Outstanding, Weighted average exercise price, beginning	$ 19.81	$ 19.84
Granted, Weighted average exercise price	33.98
Forfeited, Weighted average exercise price	19.82
Exercised, Weighted average exercise price	19.91
Outstanding, Weighted average exercised price, ending	20.62	$ 19.81
Options fully vested and exercisable at end of period, Weighted average exercise price	19.82
Options expected to vest, Weighted average exercise price	$ 20.54
Outstanding, Weighted average remaining contractual term in years	4 years 26 days	4 years 10 months 6 days
Options fully vested and exercisable at end of period, weighted average remaining contractual term in years	3 years 4 months 6 days
Options expected to vest, Weighted average remaining contractual term in years	4 years 7 days
Outstanding, Aggregate intrinsic value, beginning	$ 7,753
Outstanding, Outstanding, Aggregate intrinsic value, beginning	19,017	$ 7,753
Aggregate intrinsic Value of Options fully vested and exercisable at end of period	17,306
Options expected to vest, Aggregate Intrinsic Value	$ 18,924

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Stock-based Compensation and Benefits (Schedule Of Weighted Average Assumptions Using Black-Scholes option-Pricing Model) (Details) - Stock options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share Based Compensation [Line Items]
Weighted average fair value	$ 7.84	$ 4.24	$ 4.37
Risk-free interest rate	2.14%	1.47%	1.59%
Expected volatility	21.61%	22.47%	23.87%
Expected term (years)	6 years 1 month 2 days	6 years 1 month 2 days	6 years 4 days
Dividend yield	0.83%	1.02%	1.05%

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Stock-based Compensation and Benefits - (Summary of Restricted Stock Activity) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested Restricted shares, Beginning (in shares)	499,271	836,031
Unvested Restricted shares, Vested (in shares)	(380,956)	(431,155)
Unvested Restricted shares, Granted (in shares)	66,471	122,992
Unvested Restricted shares, Forfeited (in shares)	(21,229)	(28,597)
Unvested Restricted shares, Ending (in shares)	163,557	499,271
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted average grant-date fair value, Beginning (in dollars per share)	$ 15.82	$ 15.42
Weighted average grant-date fair value, Vested (in dollars per share)	15.40	15.78
Weighted average grant-date fair value, Granted (in dollars per share)	33.43	19.15
Weighted average grant-date fair value, Forfeited (in dollars per share)	18.73	18.95
Weighted average grant-date fair value, Ending (in dollars per share)	$ 22.60	$ 15.82
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested Restricted shares, Beginning (in shares)	85,295
Unvested Restricted shares, Granted (in shares)	49,758	91,342
Unvested Restricted shares, Forfeited (in shares)	(9,971)	(6,047)
Unvested Restricted shares, Ending (in shares)	125,082	85,295
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted average grant-date fair value, Beginning (in dollars per share)	$ 18.22
Weighted average grant-date fair value, Granted (in dollars per share)	33.22	$ 18.22
Weighted average grant-date fair value, Forfeited (in dollars per share)	21.78	18.22
Weighted average grant-date fair value, Ending (in dollars per share)	$ 23.90	$ 18.22

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Stock-based Compensation and Benefits (Summarizes Information about Outstanding Stock Options) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Number	1,598,318	2,185,922	2,596,251
Options Outstanding, Weighted Average Remaining Contractual Life in years	4 years 26 days	4 years 10 months 6 days
Options Outstanding, Weighted Average Exercise Price	$ 20.62	$ 19.81	$ 19.84
Options Vested, Number	1,581,184
Options Vested, Weighted Average Exercise Price	$ 20.54
18.00 - 18.99
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Low Range of Exercise Price	18.00
Options Outstanding, High Range of Exercise Price	$ 18.99
Options Outstanding, Number	129,327
Options Outstanding, Weighted Average Remaining Contractual Life in years	5 years 10 months 6 days
Options Outstanding, Weighted Average Exercise Price	$ 18.55
Options Vested, Number	129,145
Options Vested, Weighted Average Exercise Price	$ 18.55
19.00 - 19.99
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Low Range of Exercise Price	19.00
Options Outstanding, High Range of Exercise Price	$ 19.99
Options Outstanding, Number	243,649
Options Outstanding, Weighted Average Remaining Contractual Life in years	7 years 9 months 11 days
Options Outstanding, Weighted Average Exercise Price	$ 19.38
Options Vested, Number	115,278
Options Vested, Weighted Average Exercise Price	$ 19.31
20.00 - 20.99
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Low Range of Exercise Price	$ 21.00
Options Outstanding, Number	1,126,549
Options Outstanding, Weighted Average Remaining Contractual Life in years	2 years 7 months 10 days
Options Outstanding, Weighted Average Exercise Price	$ 20.01
Options Vested, Number	1,125,577
Options Vested, Weighted Average Exercise Price	$ 20.01
21.00 and above
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Number	98,793
Options Outstanding, Weighted Average Remaining Contractual Life in years	9 years 1 month 21 days
Options Outstanding, Weighted Average Exercise Price	$ 33.42
Options Vested, Number	2,300
Options Vested, Weighted Average Exercise Price	$ 23.98

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Warrants (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Warrants and Rights Note Disclosure [Abstract]
Warrants granted, exercise price per share	$ 20.00	$ 20.00
Warrants settled or exercised	250,750	475,000
Expense (benefit) from the change in fair value of warrant liability or settlement			$ 106

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Common Stock - (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Schedule Of Common Stock [Line Items]
Shares repurchased (shares)		4,500,936	8,645,836
Repurchase of shares		$ 93,573	$ 175,048
Shares outstanding	26,875,585	26,386,583
Common Class A [Member]
Schedule Of Common Stock [Line Items]
Shares outstanding	26,875,585	26,386,583
Restricted issued but not yet vested, shares	163,557	499,271
New Board Authorized Share Repurchase Program
Schedule Of Common Stock [Line Items]
Remaining authorized amount	$ 12,600

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Income Per Share - (Narrative) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Shares outstanding	26,875,585	26,386,583
Outstanding stock options to purchase common stock	1,598,318	2,185,922	2,596,251
Outstanding stock options to purchase common stock, per share	$ 20.62	$ 19.81	$ 19.84
Warrants granted, exercise price per share	$ 20.00	$ 20.00
Restricted shares outstanding	288,639	499,271	836,031
Warrant [Member]
Dilutive Convertible Securities	8,504	73,451	4,170

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Income Per Share - (Schedule of Computation of Basic and Diluted Income Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ (10,119)	$ 7,231	$ 9,209	$ 8,258	$ 9,991	$ 8,314	$ 4,504	$ 251	$ 3,340	$ 1,636	$ (1,341)	$ 1,246	$ 14,579	$ 23,060	$ 4,881
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic													(56)	(52)	(53)
Income available to common stockholders (numerator)													$ 14,523	$ 23,008	$ 4,828
Weighted average common shares outstanding (denominator)													26,928,763	28,313,061	34,349,996
Weighted average shares outstanding for diluted earnings per common share													27,709,659	29,091,343	34,363,487
Income per share-basic (in dollars per share)	$ (0.37)	$ 0.27	$ 0.34	$ 0.31	$ 0.38	$ 0.30	$ 0.15	$ 0.01	$ 0.11	$ 0.05	$ (0.04)	$ 0.03	$ 0.54	$ 0.81	$ 0.14
Income per share-diluted (in dollars per share)	$ (0.37)	$ 0.26	$ 0.33	$ 0.30	$ 0.36	$ 0.30	$ 0.15	$ 0.01	$ 0.11	$ 0.05	$ (0.04)	$ 0.03	$ 0.53	$ 0.79	$ 0.14
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive Convertible Securities													772,392	704,831	9,321
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive Convertible Securities													8,504	73,451	4,170

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Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current expense: [Abstract]
U.S. federal													$ 1,230	$ 1,868	$ 3,536
State and local													169	117	311
Total current income tax expense													1,399	1,985	3,847
Deferred expense (benefit):
U.S. federal													17,639	626	(710)
State and local													2,245	336	(93)
Total deferred income tax expense (benefit)													19,884	962	(803)
Income tax expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	$ 21,283	$ 2,947	$ 3,044

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Income Taxes (Components of Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended			36 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	$ 21,283	$ 2,947	$ 3,044
Statutory rate																35.00%
Income tax at federal statutory rate (35%)													12,550	9,103	2,774
State income taxes, net of federal benefits													265	295	142
Tax-exempt loan interest income													(5,380)	(3,798)	(2,568)
Bank-owned life insurance income													(813)	(724)	(576)
Stock-based compensation													(3,998)	(2,002)	3,520
Warrant valuation													18,457		37
Bargain purchase gain															(367)
Other													202	73	82
Income tax expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	$ 21,283	$ 2,947	$ 3,044

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Income Taxes (Significant Components of Deferred Taxes) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Excess tax basis of acquired loans over carrying value	$ 1,887	$ 5,865
Allowance for loan losses	7,354	11,063
Intangible assets	6,367	12,279
Other real estate owned	228
Accrued stock-based compensation	3,098	7,429
Accrued compensation	2,431	3,296
Capitalized start-up costs	2,488	4,554
Accrued expenses	1,227	2,218
Net deferred loan fees	622	1,198
Net operating loss	1,027	2,177
Federal tax credits	5,891	1,888
Net unrealized losses on investment securities	2,307	1,082
Other	993	1,526
Total deferred tax assets	35,920	54,575
Deferred tax liabilities:
Premises and equipment	(113)	(937)
Other real estate owned		(426)
Prepaid expenses	(177)	(402)
Total deferred tax liabilities	(290)	(1,765)
Net deferred tax asset	$ 35,630	$ 52,810

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Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Loss Carryforwards [Line Items]
Income tax (benefit) expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	$ 21,283	$ 2,947	$ 3,044
Accrued stock-based compensation	3,098				7,429								3,098	7,429
Adjustments for New Accounting Principle, Early Adoption [Member]
Operating Loss Carryforwards [Line Items]
Income tax (benefit) expense													$ (4,200)	2,100
Stock options [Member]
Operating Loss Carryforwards [Line Items]
Strike price													$ 20.00
Minimum
Operating Loss Carryforwards [Line Items]
Tax credit carryover that does not expire	5,900												$ 5,900
Minimum | Stock options [Member]
Operating Loss Carryforwards [Line Items]
Strike price													$ 18.09
Maximum | Stock options [Member]
Operating Loss Carryforwards [Line Items]
Strike price													$ 34.16
Domestic Country [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers (NOLs)	4,000												$ 4,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers (NOLs)	8,900												8,900
Executive Officer [Member]
Operating Loss Carryforwards [Line Items]
Write off due to awards granted					$ 3,700									$ 3,700
Accrued stock-based compensation	$ 2,300												$ 2,300

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Derivatives - (FV of Derivatives on the Balance Sheet) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Asset derivatives fair value	$ 10,489	$ 9,528
Liability derivatives fair value	1,167	1,381
Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Asset derivatives fair value	2,616	2,187
Liability derivatives fair value	2,591	1,924
Other assets [Member] | Interest rate products [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Asset derivatives fair value	10,489	9,528
Other assets [Member] | Interest rate products [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Asset derivatives fair value	2,483	1,900
Other assets [Member] | Interest Rate Lock Commitments [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Asset derivatives fair value	128	149
Other assets [Member] | Forward Contracts [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Asset derivatives fair value	5	138
Other liabilities [Member] | Interest rate products [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Liability derivatives fair value	1,167	1,381
Other liabilities [Member] | Interest rate products [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Liability derivatives fair value	2,584	1,898
Other liabilities [Member] | Interest Rate Lock Commitments [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Liability derivatives fair value		6
Other liabilities [Member] | Forward Contracts [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Liability derivatives fair value	$ 7	$ 20

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Derivatives - (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($) item
Derivative [Line Items]
Number of forward contracts | item	6	11
Notional amount	$ 9,000	$ 11,800
Termination value of derivatives in net liability position	500
Collateral Already Posted, Aggregate Fair Value	500
Interest Rate Lock Commitments Notional Amount Member
Derivative [Line Items]
Notional amount	$ 8,000
Not Designated as Hedging Instrument, Economic Hedge [Member] | Interest rate swap derivatives [Member]
Derivative [Line Items]
Number of interest rate swaps held | item	44	36
Notional amount	$ 202,200	$ 132,600
Not Designated as Hedging Instrument, Economic Hedge [Member] | Number OF Interest Rate Loack Commitments Member
Derivative [Line Items]
Number of interest rate lock commitments | item	31	78
Notional amount		$ 13,800
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Gain (loss) related to hedge ineffectiveness	$ (995)	$ 293
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Interest rate swap derivatives [Member]
Derivative [Line Items]
Number of interest rate swaps held | item	61	42
Notional amount	$ 417,700	$ 313,000

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Derivatives - (Derivatives on the Income Statement) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on hedged items	$ (2,172)	$ (7,890)
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	1,177	8,183
Fair Value Hedging [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	(29)	389
Interest rate products [Member] | Designated as Hedging Instrument [Member] | Other Non-Interest income [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on hedged items	(2,172)	(7,890)
Interest rate products [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Other Non-Interest income [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	1,177	8,183
Interest rate products [Member] | Fair Value Hedging [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | Other Non-Interest income [Member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	104	129
Forward Contracts [Member] | Fair Value Hedging [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | Gain on sale of mortgages net [member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	(120)	118
Interest Rate Lock Commitments [Member] | Fair Value Hedging [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | Gain on sale of mortgages net [member]
Derivative [Line Items]
Amount of gain or (loss) recognized in income on derivatives	$ (13)	$ 142

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Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Commitment And Contingencies [Line Items]
Loan commitments	$ 680.8	$ 602.2
Standby Letters of Credit [Member]
Commitment And Contingencies [Line Items]
Standby letters of credit	$ 7.2	$ 13.5

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Commitments and Contingencies (Schedule of Total Unfunded Commitments) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Commitment And Contingencies [Line Items]
Total unfunded commitments	$ 687,946	$ 615,774
Commitments to fund loans [Member]
Commitment And Contingencies [Line Items]
Total unfunded commitments	181,904	149,391
Unfunded Commitment Line Of Credit [Member]
Commitment And Contingencies [Line Items]
Total unfunded commitments	498,857	452,851
Commercial And Standby Letters Of Credit [Member]
Commitment And Contingencies [Line Items]
Total unfunded commitments	$ 7,185	$ 13,532

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Fair Value Measurements - (Tables of Financial Instruments Measured At Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	$ 872,441	$ 919,449
Total liabilities at fair value	3,758	3,305
Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	12,972	287
Total liabilities at fair value	3,751	3,279
Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	829	3,648
Mortgage-Backed Securities (MBS) [Member] | Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	168,648	227,160
Mortgage-Backed Securities (MBS) [Member] | Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	685,230	652,739
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	872,308	919,162
Total liabilities at fair value	3,751	3,279
Level 2 [Member] | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	12,972
Total liabilities at fair value	3,751	3,279
Level 2 [Member] | Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	829	3,648
Level 2 [Member] | Mortgage-Backed Securities (MBS) [Member] | Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	168,648	227,160
Level 2 [Member] | Mortgage-Backed Securities (MBS) [Member] | Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	685,230	652,739
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	133	287
Total liabilities at fair value	7	26
Level 3 [Member] | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value		287
Interest rate swap derivatives [Member] | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value		11,428
Interest rate swap derivatives [Member] | Level 2 [Member] | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value		11,428
Mortgage banking derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	133
Total liabilities at fair value	7
Mortgage banking derivatives | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value		26
Mortgage banking derivatives | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	133
Total liabilities at fair value	$ 7
Mortgage banking derivatives | Level 3 [Member] | Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value		$ 26

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Fair Value Measurements - (Table of Changes in Level 3 Financial Instruments) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 261
Realized gain (loss) included in earnings—net mortgage banking derivatives	(135)
Net change in Level 3	(135)
Ending Balance	$ 126

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Fair Value Measurements - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) loan	Dec. 31, 2016 USD ($) loan	Dec. 31, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	$ 3,178,947	$ 2,860,921
Impairment on other real estate owned	$ 766	$ 298	$ 1,580
Impairment on fixed assets related to banking center consolidations			$ 1,411
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of Loans measured | loan	7	3
Loans	$ 7,100	$ 10,500
Nonrecurring Loans Reserves	1,500	2,400
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment on other real estate owned	$ 800	$ 300

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Fair Value Measurements - (Inputs Used to Determine Fair Values of Oreo are Considered Level 3 Inputs in Fair Value Hierarchy) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on a non-recurring basis	$ 10,491	$ 15,662
Losses From Fair Value Changes	766	154
Impaired loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on a non-recurring basis	30,873	38,282
Losses From Fair Value Changes	$ 11,099	$ 15,200

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Fair Value Measurements - (Table of Valuation Techniques and Unobservable Inputs Used in Valuation of Financial Instruments Falling Within Level 3 of Fair Value Hierarchy) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Total assets at fair value	$ 872,441	$ 919,449

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Fair Value of Financial Instruments - (Schedule of Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
ASSETS:
Cash and cash equivalents	$ 257,364	$ 152,736	$ 166,092	$ 256,979
Investment securities available-for-sale (at fair value)	855,345	884,232
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	258,730	332,505
Non-marketable securities	15,030	14,949
Loans held-for-sale	4,629	24,187
LIABILITIES:
Time deposits	1,118,050	1,172,046
Securities sold under agreements to repurchase	130,463	92,011
Federal Home Loan Bank advances	129,115	38,665
Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	168,648	227,160
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	204,352	263,411
Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	685,230	652,739
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	54,378	69,094
Other Securities [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	419	419
Municipal [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	1,048	3,914
Carrying Amount [Member] | Level 1 [Member]
ASSETS:
Cash and cash equivalents	257,364	152,736
Carrying Amount [Member] | Level 2 [Member]
ASSETS:
Non-marketable securities	15,030	14,949
Loans held-for-sale	4,629	24,187
Accrued interest receivable	14,255	12,562
LIABILITIES:
Deposit transaction accounts	2,861,509	2,696,603
Time deposits	1,118,050	1,172,046
Securities sold under agreements to repurchase	130,463	92,011
Federal Home Loan Bank advances	129,115	38,665
Accrued interest payable	5,776	4,973
Carrying Amount [Member] | Level 3 [Member]
ASSETS:
Loans receivable, net	3,178,947	2,860,921
Carrying Amount [Member] | Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member] | Level 2 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	168,648	227,160
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	204,352	263,411
Carrying Amount [Member] | Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member] | Level 2 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	685,230	652,739
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	54,378	69,094
Carrying Amount [Member] | Other Securities [Member] | Level 3 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	419	419
Carrying Amount [Member] | Municipal [Member] | Level 2 [Member]
ASSETS:
Municipal obligations	829	3,648
Carrying Amount [Member] | Municipal [Member] | Level 3 [Member]
ASSETS:
Municipal obligations	219	265
Estimated Fair Value [Member] | Level 1 [Member]
ASSETS:
Cash and cash equivalents	257,364	152,736
Estimated Fair Value [Member] | Level 2 [Member]
ASSETS:
Non-marketable securities	15,030	14,949
Loans held-for-sale	4,629	24,187
Accrued interest receivable	14,255	12,562
LIABILITIES:
Deposit transaction accounts	2,861,509	2,696,603
Time deposits	1,118,050	1,172,046
Securities sold under agreements to repurchase	130,463	92,011
Federal Home Loan Bank advances	130,300	39,324
Accrued interest payable	5,776	4,973
Estimated Fair Value [Member] | Level 3 [Member]
ASSETS:
Loans receivable, net	3,167,508	2,879,860
Estimated Fair Value [Member] | Residential Mortgage Pass-Through Securities Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member] | Level 2 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	168,648	227,160
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	204,048	264,862
Estimated Fair Value [Member] | Other Residential MBS Issued or Guaranteed by U.S. Government Agencies or Sponsored Enterprises [Member] | Level 2 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	685,230	652,739
Mortgage-backed securities-residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	52,723	67,711
Estimated Fair Value [Member] | Other Securities [Member] | Level 3 [Member]
ASSETS:
Investment securities available-for-sale (at fair value)	419	419
Estimated Fair Value [Member] | Municipal [Member] | Level 2 [Member]
ASSETS:
Municipal obligations	829	3,648
Estimated Fair Value [Member] | Municipal [Member] | Level 3 [Member]
ASSETS:
Municipal obligations	219	265
Interest rate swap derivatives [Member] | Carrying Amount [Member] | Level 2 [Member]
ASSETS:
Derivative asset	12,972	11,428
LIABILITIES:
Derivative liability	3,751	3,279
Interest rate swap derivatives [Member] | Estimated Fair Value [Member] | Level 2 [Member]
ASSETS:
Derivative asset	12,972	11,428
LIABILITIES:
Derivative liability	3,751	3,279
Mortgage banking derivatives | Carrying Amount [Member] | Level 3 [Member]
ASSETS:
Derivative asset	133	287
LIABILITIES:
Derivative liability	7	187
Mortgage banking derivatives | Estimated Fair Value [Member] | Level 3 [Member]
ASSETS:
Derivative asset	133	287
LIABILITIES:
Derivative liability	$ 7	$ 187

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Fair Value of Financial Instruments - (Additional Information) (Details)	12 Months Ended
	Dec. 31, 2017
Fair Value Of Financial Instruments [Abstract]
Residential mortgage loans held for sale period	45 days

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 01, 2018	Jan. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Subsequent Event [Line Items]
Business Acquisition, Transaction Costs				$ 2,700
Amortization of accretion of purchase discounts				(2,581)	$ (3,067)	$ (4,124)
Amortization of acquired identifiable intangibles				5,300	5,500	$ 5,400
Business Acquisition, Pro Forma Revenue				263,000	268,100
Business Acquisition, Pro Forma Net Income (Loss)				$ 22,600	$ 34,700
Business Acquisition, Pro Forma Earnings Per Share, Basic				$ 0.75	$ 1.09
Business Acquisition, Pro Forma Earnings Per Share, Diluted				$ 0.73	$ 1.07
Peoples Inc. Member
Subsequent Event [Line Items]
Accretion amortization of discounts and premiums				$ 900	$ 900
Amortization of acquired identifiable intangibles				1,100	$ 1,100
Peoples and NBH Combined Member
Subsequent Event [Line Items]
Business Acquisition, Transaction Costs				$ 13,100
Subsequent Event
Subsequent Event [Line Items]
Mortgage repurchase reserve	$ 3,800
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares		3,398,477
Business Acquisition, Share Price		$ 32.43
Business Acquisition Restricted Cash			$ 10,000

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Subsequent Events - (Summary of Net Assets Acquired) (Details) 10K - USD ($) $ in Thousands	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Consideration:
Goodwill		$ 59,630	$ 59,630
Peoples Inc Member | Subsequent Event
Assets:
Cash and due from banks	$ 105,173
Investment secruities available-for-sale (at fair value)	118,553
Non-marketable securities	4,846
Loans, net	544,233
Loans held for sale	54,260
Other real estate owned	1,436
Premises and equipment, net	17,931
Core deposit intangible asset	9,839
Mortgage servicing right	4,233
Other assets	15,740
Total assets aquired	876,244
Liabilities:
Total deposits	729,911
Other liabilities	55,973
Total liabilities assumed	785,884
Identifiable net assets acquired	90,360
Consideration:
Cash	36,189
Common stock paid	110,213
Total Consideration	146,402
Goodwill	$ 56,042

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Parent Company Only Financial Statements (Condensed Statements of Financial Condition) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 257,364	$ 152,736	$ 166,092	$ 256,979
Other assets	139,248	154,778
Total assets	4,843,465	4,573,046
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	71,921	37,532
Total liabilities	4,311,058	4,036,857
Stockholders' equity	532,407	536,189	617,544	794,575
Total liabilities and shareholders' equity	4,843,465	4,573,046
Parent Company [Member]
ASSETS
Cash and cash equivalents	73,873	64,691	$ 15,739	$ 123,144
Investment in subsidiaries	444,445	455,120
Other assets	14,414	16,996
Total assets	532,732	536,807
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	325	618
Total liabilities	325	618
Stockholders' equity	532,407	536,189
Total liabilities and shareholders' equity	$ 532,732	$ 536,807

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Parent Company Only Financial Statements (Condensed Statements of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest expense:
Salaries and benefits													$ 80,188	$ 79,765	$ 83,018
Income tax (benefit) expense	$ 18,615	$ 1,733	$ 2,175	$ (1,240)	$ 81	$ 1,695	$ 982	$ 189	$ 4,355	$ (1,580)	$ 692	$ (423)	21,283	2,947	3,044
Net income	$ (10,119)	$ 7,231	$ 9,209	$ 8,258	$ 9,991	$ 8,314	$ 4,504	$ 251	$ 3,340	$ 1,636	$ (1,341)	$ 1,246	14,579	23,060	4,881
Parent Company [Member]
Interest income													45	24
Undistributed equity from subsidiaries													(11,192)	(129,956)	(74,131)
Dividends from subsidiaries													28,903	155,353	86,000
Other income															1,048
Total income													17,756	25,421	12,917
Interest expense:
Salaries and benefits													3,680	3,529	3,349
Other expenses													3,587	3,578	3,597
Total expenses													7,267	7,107	6,946
Operating income													10,489	18,314	5,971
Income tax (benefit) expense													(4,090)	(4,746)	1,090
Net income													$ 14,579	$ 23,060	$ 4,881

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Parent Company Only Financial Statements (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ (10,119)	$ 7,231	$ 9,209	$ 8,258	$ 9,991	$ 8,314	$ 4,504	$ 251	$ 3,340	$ 1,636	$ (1,341)	$ 1,246	$ 14,579	$ 23,060	$ 4,881
Stock-based compensation expense													3,648	3,492	3,349
Net excess tax (benefit) deficit on stock-based compensation													(4,225)	(2,078)	3,677
Net cash provided by (used in) operating activities													58,139	(3,936)	(37,628)
Cash flows from investing activities:
Net cash provided by (used in) investing activities													(178,517)	114,629	182,343
Cash flows from financing activities:
Issuance of stock under purchase and equity compensation plans													(8,395)	(6,201)	(952)
Proceeds from exercise of stock options													104		160
Settlement of warrants															(368)
Payment of dividends													(9,401)	(6,400)	(6,711)
Repurchase of shares														(93,573)	(175,048)
Net cash proivded by (used in) financing activities													225,006	(124,049)	(235,602)
Increase (decrease) in cash and cash equivalents													104,628	(13,356)	(90,887)
Cash and cash equivalents at beginning of the year				152,736				166,092				256,979	152,736	166,092	256,979
Cash and cash equivalents at end of year	257,364				152,736				166,092				257,364	152,736	166,092
Parent Company [Member]
Cash flows from operating activities:
Net income													14,579	23,060	4,881
Undistributed equity from subsidiaries													11,192	(25,388)	(11,869)
Stock-based compensation expense													3,648	3,492	3,349
Net excess tax (benefit) deficit on stock-based compensation													(4,225)	(2,078)	3,677
Other													6,680	418	(1,042)
Net cash provided by (used in) operating activities													31,874	(496)	(1,004)
Cash flows from investing activities:
Outlay for business combinations															(9,482)
Dividend payment from subsidiary equity														15,353
Return of capital from investments in subsidiaries														140,000	86,000
Net cash provided by (used in) investing activities														155,353	76,518
Cash flows from financing activities:
Issuance of stock under purchase and equity compensation plans													(8,395)	(6,201)	(952)
Capital Contribution													(5,000)
Proceeds from exercise of stock options													104		160
Settlement of warrants															(368)
Payment of dividends													(9,401)	(6,131)	(6,711)
Repurchase of shares														(93,573)	(175,048)
Net cash proivded by (used in) financing activities													(22,692)	(105,905)	(182,919)
Increase (decrease) in cash and cash equivalents													9,182	48,952	(107,405)
Cash and cash equivalents at beginning of the year				$ 64,691				$ 15,739				$ 123,144	64,691	15,739	123,144
Cash and cash equivalents at end of year	$ 73,873				$ 64,691				$ 15,739				$ 73,873	$ 64,691	$ 15,739

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Quarterly Results of Operations - Summary of Quarterly Results (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Interest and dividend income	$ 41,889	$ 42,579	$ 41,213	$ 38,740	$ 39,658	$ 40,764	$ 38,472	$ 41,554	$ 43,492	$ 42,311	$ 42,517	$ 43,087	$ 164,421	$ 160,448	$ 171,407
Interest expense	4,976	4,681	4,440	4,018	3,873	3,700	3,719	3,516	3,563	3,629	3,662	3,608	18,115	14,808	14,462
Net interest income before provision for loan losses	36,913	37,898	36,773	34,722	35,785	37,064	34,753	38,038	39,929	38,682	38,855	39,479	146,306	145,640	156,945
Provision for loan losses	3,272	3,880	4,025	1,795	1,282	5,293	6,457	10,619	5,423	3,710	1,858	1,453	12,972	23,651	12,444
Net interest income after provision for loan losses	33,641	34,018	32,748	32,927	34,503	31,771	28,296	27,419	34,506	34,972	36,997	38,026	133,334	121,989	144,501
Non-interest income	8,883	9,551	12,075	8,696	9,992	11,608	10,504	7,923	15,419	3,761	2,747	(479)	39,205	40,027	21,448
Non-interest expense	34,028	34,605	33,439	34,605	34,423	33,370	33,314	34,902	42,230	38,677	40,393	36,724	136,677	136,009	158,024
Income before income taxes	8,496	8,964	11,384	7,018	10,072	10,009	5,486	440	7,695	56	(649)	823	35,862	26,007	7,925
Income tax (benefit) expense	18,615	1,733	2,175	(1,240)	81	1,695	982	189	4,355	(1,580)	692	(423)	21,283	2,947	3,044
Net income	$ (10,119)	$ 7,231	$ 9,209	$ 8,258	$ 9,991	$ 8,314	$ 4,504	$ 251	$ 3,340	$ 1,636	$ (1,341)	$ 1,246	$ 14,579	$ 23,060	$ 4,881
Income per share-basic (in dollars per share)	$ (0.37)	$ 0.27	$ 0.34	$ 0.31	$ 0.38	$ 0.30	$ 0.15	$ 0.01	$ 0.11	$ 0.05	$ (0.04)	$ 0.03	$ 0.54	$ 0.81	$ 0.14
Income per share-diluted (in dollars per share)	$ (0.37)	$ 0.26	$ 0.33	$ 0.30	$ 0.36	$ 0.30	$ 0.15	$ 0.01	$ 0.11	$ 0.05	$ (0.04)	$ 0.03	$ 0.53	$ 0.79	$ 0.14