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Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2021

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. September 30, 2021 and December 31, 2020, 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:


		September 30, 2021
		Carrying			Fair
		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Cash and due from banks		$	26,705		$	26,705		$	26,705		$	-		$	-
Interest earning deposits with financial institutions			492,548			492,548			492,548			-			-
Securities available-for-sale			715,188			715,188			4,070			705,558			5,560
FHLBC and FRBC stock			9,917			9,917			-			9,917			-
Loans held-for-sale			3,009			3,009			-			3,009			-
Net loans			1,840,993			1,849,933			-			-			1,849,933
Mortgage servicing rights			5,320			5,320			-			-			5,320
Interest rate swap agreements			5,292			5,292			-			5,292			-
Interest rate lock commitments and forward contracts			875			875			-			875			-
Interest receivable on securities and loans			8,956			8,956			-			8,956			-

Financial liabilities:
Noninterest bearing deposits		$	1,037,638		$	1,037,638		$	1,037,638		$	-		$	-
Interest bearing deposits			1,676,691			1,677,796			-			1,677,796			-
Securities sold under repurchase agreements			42,962			42,962			-			42,962			-
Junior subordinated debentures			25,773			18,557			-			18,557			-
Subordinated debentures			59,190			60,390						60,390
Senior notes			44,454			44,724			44,724			-			-
Note payable and other borrowings			20,155			20,600			-			20,600			-
Interest rate swap agreements			7,767			7,767			-			7,767			-
Interest payable on deposits and borrowings			1,920			1,920			-			1,920			-


		December 31, 2020
		Carrying			Fair
		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Cash and due from banks		$	24,306		$	24,306		$	24,306		$	-		$	-
Interest earning deposits with financial institutions			305,597			305,597			305,597			-			-
Securities available-for-sale			496,178			496,178			4,117			487,742			4,319
FHLBC and FRBC stock			9,917			9,917			-			9,917			-
Loans held-for-sale			12,611			12,611			-			12,611			-
Net loans			2,000,996			2,009,773			-			-			2,009,773
Mortgage servicing rights			4,224			4,224			-			-			4,224
Interest rate swap agreements			9,388			9,388			-			9,388			-
Interest rate lock commitments and forward contracts			840			840			-			840			-
Interest receivable on securities and loans			9,698			9,698			-			9,698			-

Financial liabilities:
Noninterest bearing deposits		$	909,505		$	909,505		$	909,505		$	-		$	-
Interest bearing deposits			1,627,568			1,630,109			-			1,630,109			-
Securities sold under repurchase agreements			66,980			66,980			-			66,980			-
Junior subordinated debentures			25,773			14,658			-			14,658			-
Senior notes			44,375			44,600			44,600			-			-
Note payable and other borrowings			23,393			24,043			-			24,043			-
Interest rate swap agreements			13,071			13,071			-			13,071			-
Interest payable on deposits and borrowings			418			418			-			418			-