Fair Values of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note 18: Fair Value 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 December 31, 2022 and 2021, 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 fair value of mortgage banking derivatives is discussed in Note 16: Mortgage Banking Derivatives, above.

The carrying amount and estimated fair values of financial instruments at December 31, were as follows:

	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		-

	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	$	2,087,649	$	2,087,649	$	2,087,649	$	-	$	-
Interest bearing deposits		3,378,583		3,375,930		-		3,375,930		-
Securities sold under repurchase agreements		50,337		50,337		-		50,337		-
Other short-term borrowings		-		-		-		-		-
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		-