Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2023

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 13 – Fair Values of Financial Instruments

The estimated fair values approximate carrying amount for all items except those described in the following table.  Securities available-for-sale fair values are based upon market prices or dealer quotes, and if no such information is available, on the rate and term of the security.  The carrying value of FHLBC stock approximates fair value as the stock is nonmarketable and can only be sold to the FHLBC or another member institution at par.  FHLBC stock is carried at cost and considered a Level 2 fair value. For March 31, 2023 and December 31, 2022, the fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.  The fair value of time deposits was 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 was not considered material.

The carrying amount and estimated fair values of financial instruments were as follows:

	March 31, 2023
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	50,860	$	50,860	$	50,860	$	-	$	-
Interest earning deposits with financial institutions		52,162		52,162		52,162		-		-
Securities available-for-sale		1,455,068		1,455,068		214,734		1,225,355		14,979
FHLBC and FRBC stock		30,205		30,205		-		30,205		-
Loans held-for-sale		946		946		-		946		-
Net loans		4,003,354		3,842,384		-		-		3,842,384
Mortgage servicing rights		10,784		10,784		-		-		10,784
Interest rate swap agreements		5,735		5,735		-		5,735		-
Interest rate lock commitments and forward contracts		28		28		-		28		-
Interest receivable on securities and loans		24,214		24,214		-		24,214		-
Financial liabilities:
Noninterest bearing deposits	$	1,950,144	$	1,950,144	$	1,950,144	$	-	$	-
Interest bearing deposits		2,947,076		2,932,989		-		2,932,989		-
Securities sold under repurchase agreements		27,897		27,897		-		27,897		-
Other short-term borrowings		315,000		315,000		-		315,000		-
Junior subordinated debentures		25,773		19,330		-		19,330		-
Subordinated debentures		59,318		46,118		-		46,118		-
Senior notes		44,611		41,011		41,011		-		-
Interest rate swap agreements		10,006		10,006		-		10,006		-
Interest payable on deposits and borrowings		2,029		2,029		-		2,029		-

	December 31, 2022
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	56,632	$	56,632	$	56,632	$	-	$	-
Interest earning deposits with financial institutions		58,545		58,545		58,545		-		-
Securities available-for-sale		1,539,359		1,539,359		212,129		1,291,219		36,011
FHLBC and FRBC stock		20,530		20,530		-		20,530		-
Loans held-for-sale		491		491		-		491		-
Net loans		3,820,129		3,681,387		-		-		3,681,387
Mortgage servicing rights		11,189		11,189		-		-		11,189
Interest rate swap agreements		6,391		6,391		-		6,391		-
Interest rate lock commitments and forward contracts		76		76		-		76		-
Interest receivable on securities and loans		22,661		22,661		-		22,661		-
Financial liabilities:
Noninterest bearing deposits	$	2,051,702	$	2,051,702	$	2,051,702	$	-	$	-
Interest bearing deposits		3,059,021		3,042,740		-		3,042,740		-
Securities sold under repurchase agreements		32,156		32,156		-		32,156		-
Other short-term borrowings		90,000		90,000		-		90,000		-
Junior subordinated debentures		25,773		21,907		-		21,907		-
Subordinated debentures		59,297		52,322		-		52,322		-
Senior notes		44,585		44,248		44,248		-		-
Note payable and other borrowings		9,000		8,984		-		8,984		-
Interest rate swap agreements		12,264		12,264		-		12,264		-
Interest payable on deposits and borrowings		1,657		1,657		-		1,657		-