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, 2020 and December 31, 2019, the fair values of loans and leases are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. 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 carrying amount and estimated fair values of financial instruments were as follows:


	March 31, 2020
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	27,627	$	27,627	$	27,627	$	-	$	-
Interest bearing deposits with financial institutions		45,511		45,511		45,511		-		-
Securities available-for-sale		449,694		449,694		4,152		434,385		11,157
FHLBC and FRBC stock		9,917		9,917		-		9,917		-
Loans held-for-sale		10,049		10,049		-		10,049		-
Net loans		1,927,159		1,947,974		-		-		1,947,974
Interest rate swap agreements		11,115		11,115		-		11,115
Interest receivable on securities and loans		9,392		9,392		-		9,392		-

Financial liabilities:
Noninterest bearing deposits	$	702,598	$	702,598	$	702,598	$	-	$	-
Interest bearing deposits		1,493,044		1,496,968		-		1,496,968		-
Securities sold under repurchase agreements		51,236		51,236		-		51,236		-
Other short-term borrowings		6,375		6,375		-		6,375		-
Junior subordinated debentures		25,773		9,257		-		9,257		-
Senior notes		44,297		42,689		42,689		-		-
Note payable and other borrowings		26,609		27,003		-		27,003		-
Interest rate swap agreements		16,795		16,795		-		16,795		-
Interest payable on deposits and borrowings		1,728		1,728		4		1,724		-


	December 31, 2019
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	34,096	$	34,096	$	34,096	$	-	$	-
Interest bearing deposits with financial institutions		16,536		16,536		16,536		-		-
Securities available-for-sale		484,648		484,648		4,036		475,193		5,419
FHLBC and FRBC stock		9,917		9,917		-		9,917		-
Loans held-for-sale		3,061		3,061		-		3,061		-
Net loans		1,911,023		1,915,531		-		-		1,915,531
Interest rate swap agreements		2,771		2,771		-		2,771		-
Interest receivable on securities and loans		9,697		9,697		-		9,697		-

Financial liabilities:
Noninterest bearing deposits	$	669,795	$	669,975	$	669,975	$	-	$	-
Interest bearing deposits		1,456,954		1,457,832		-		1,457,832		-
Securities sold under repurchase agreements		48,693		48,693		-		48,693		-
Other short-term borrowings		48,500		48,500		-		48,500		-
Junior subordinated debentures		57,734		51,188		33,614		17,574		-
Senior notes		44,270		46,269		46,269		-		-
Note payable and other borrowings		6,673		7,003		-		7,003		-
Interest rate swap agreements		5,921		5,921		-		5,921		-
Interest payable on deposits and borrowings		1,079		1,079		-		1,079		-