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Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2022

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. The fair value of loans and leases at September 30, 2022 and December 31, 2021, was 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:


		September 30, 2022
		Carrying			Fair
		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Cash and due from banks		$	64,903		$	64,903		$	64,903		$	-		$	-
Interest earning deposits with financial institutions			51,251			51,251			51,251			-			-
Securities available-for-sale			1,609,759			1,609,759			211,097			1,385,353			13,309
FHLBC and FRBC stock			19,413			19,413			-			19,413			-
Loans held-for-sale			1,297			1,297			-			1,297			-
Net loans			3,820,487			3,694,682			-			-			3,694,682
Mortgage servicing rights			11,461			11,461			-			-			11,461
Interest rate swap agreements			6,602			6,602			-			6,602			-
Interest rate lock commitments and forward contracts			188			188			-			188			-
Interest receivable on securities and loans			20,133			20,133			-			20,133			-

Financial liabilities:
Noninterest bearing deposits		$	2,098,144		$	2,098,144		$	2,098,144		$	-		$	-
Interest bearing deposits			3,183,215			3,166,428			-			3,166,428			-
Securities sold under repurchase agreements			35,497			35,497			-			35,497			-
Other short-term borrowings			25,000			25,000			-			25,000			-
Junior subordinated debentures			25,773			21,650			-			21,650			-
Subordinated debentures			59,275			51,985			-			51,985			-
Senior notes			44,559			44,469			44,469			-			-
Note payable and other borrowings			10,000			9,970			-			9,970			-
Interest rate swap agreements			12,277			12,277			-			12,277			-
Interest payable on deposits and borrowings			2,067			2,067			-			2,067			-


		December 31, 2021
		Carrying			Fair
		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Cash and due from banks		$	38,565		$	38,565		$	38,565		$	-		$	-
Interest earning deposits with financial institutions			713,542			713,542			713,542			-			-
Securities available-for-sale			1,693,632			1,693,632			202,339			1,476,057			15,236
FHLBC and FRBC stock			13,257			13,257			-			13,257			-
Loans held-for-sale			4,737			4,737			-			4,737			-
Net loans			3,376,523			3,407,596			-			-			3,407,596
Mortgage servicing rights			7,097			7,097			-			-			7,097
Interest rate swap agreements			3,494			3,494			-			3,494			-
Interest rate lock commitments and forward contracts			508			508			-			508			-
Interest receivable on securities and loans			13,431			13,431			-			13,431			-

Financial liabilities:
Noninterest bearing deposits		$	2,093,494		$	2,093,494		$	2,093,494		$	-		$	-
Interest bearing deposits			3,372,738			3,375,930			-			3,375,930			-
Securities sold under repurchase agreements			50,377			50,377			-			50,377			-
Junior subordinated debentures			25,773			18,557			-			18,557			-
Subordinated debentures			59,212			60,111			-			60,111			-
Senior notes			44,480			44,480			44,480			-			-
Note payable and other borrowings			19,074			19,411			-			19,411			-
Interest rate swap agreements			6,788			6,788			-			6,788			-
Interest payable on deposits and borrowings			1,706			1,706			-			1,706			-