Fair Values of Financial Instruments |
Note 18: Fair Values of Financial Instruments
The estimated fair values approximate carrying amount for all items except those described in the following table. Investment security fair values are based upon market prices or dealer quotes, and if no such information is available, on the rate and term of the security. The carrying value of FHLBC stock approximates fair value as the stock is nonmarketable and can only be sold to the FHLBC or another member institution at par. During the years ended December 31, 2015, and 2014, the Company participated in redemptions and a purchase with the FHLBC and, using these transactions values as the carrying value, FHLBC stock is carried at a Level 2 fair value. Fair values of loans were estimated for portfolios of loans with similar financial characteristics, such as type and fixed or variable interest rate terms. Cash flows were discounted using current rates at which similar loans would be made to borrowers with similar ratings and for similar maturities. The fair value of time deposits is estimated using discounted future cash flows at current rates offered for deposits of similar remaining maturities. The fair values of borrowings were estimated based on interest rates available to the Company for debt with similar terms and remaining maturities. The fair value of off balance sheet volume is not considered material. The fair value of mortgage banking derivatives is discussed above in Note 16.
The carrying amount and estimated fair values of financial instruments were as follows:
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December 31, 2015
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Carrying
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Fair
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Amount
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Value
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Level 1
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Level 2
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Level 3
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Financial assets:
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Cash and due from banks
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$
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26,975
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$
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26,975
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$
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26,975
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$
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-
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$
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-
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Interest bearing deposits with financial institutions
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13,363
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13,363
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13,363
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-
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-
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Securities available-for-sale
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456,066
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456,066
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1,509
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454,446
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111
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Securities held-to-maturity
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247,746
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251,675
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-
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251,675
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-
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FHLBC and Reserve Bank Stock
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8,518
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8,518
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-
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8,518
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-
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Bank-owned life insurance
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58,028
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58,028
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-
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58,028
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-
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Loans held-for-sale
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2,849
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2,849
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-
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2,849
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-
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Loans, net
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1,117,492
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1,126,959
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-
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-
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1,126,959
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Accrued interest receivable
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4,464
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4,464
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-
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4,464
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-
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Financial liabilities:
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Noninterest bearing deposits
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$
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442,639
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$
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442,639
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$
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442,639
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$
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-
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$
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-
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Interest bearing deposits
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1,316,447
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1,316,550
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-
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1,316,550
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-
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Securities sold under repurchase agreements
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34,070
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34,070
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-
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34,070
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-
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Other short-term borrowings
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15,000
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15,000
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-
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15,000
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-
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Junior subordinated debentures
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58,378
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54,686
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32,441
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22,245
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-
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Subordinated debenture
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45,000
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41,101
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-
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41,101
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-
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Note payable and other borrowings
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500
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445
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-
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445
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-
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Interest rate swap agreements
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631
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631
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631
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Borrowing interest payable
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75
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75
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-
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75
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-
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Deposit interest payable
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445
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445
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-
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445
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-
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December 31, 2014
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Carrying
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Fair
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Amount
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Value
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Level 1
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Level 2
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Level 3
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Financial assets:
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Cash and due from banks
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$
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30,101
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$
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30,101
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$
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30,101
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$
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-
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$
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-
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Interest bearing deposits with financial institutions
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14,096
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14,096
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14,096
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-
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-
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Securities available-for-sale
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385,486
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385,486
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1,527
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330,900
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53,059
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Securities held-to-maturity
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259,670
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263,266
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-
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263,266
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-
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FHLBC and Reserve Bank Stock
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9,058
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9,058
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-
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9,058
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-
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Bank-owned life insurance
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56,807
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56,807
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-
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56,807
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-
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Loans held-for-sale
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5,072
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5,072
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-
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5,072
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-
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Loans, net
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1,137,695
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1,151,223
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-
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-
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1,151,223
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Accrued interest receivable
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4,888
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4,888
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-
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4,888
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-
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Financial liabilities:
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Noninterest bearing deposits
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$
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400,447
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$
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400,447
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$
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400,447
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$
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-
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$
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-
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Interest bearing deposits
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1,284,608
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1,284,887
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-
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1,284,887
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-
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Securities sold under repurchase agreements
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21,036
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21,036
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-
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21,036
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-
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Other short-term borrowings
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45,000
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45,000
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-
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45,000
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-
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Junior subordinated debentures
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58,378
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54,686
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32,441
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22,245
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-
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Subordinated debenture
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45,000
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39,366
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-
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39,366
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-
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Note payable and other borrowings
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500
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422
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-
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422
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-
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Borrowing interest payable
|
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75
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75
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-
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75
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-
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Deposit interest payable
|
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467
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467
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-
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467
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-
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