it cards, auto loans and personal loans. Other loans assumed little or no prepayment. Prepayment estimates were based on the Corporation’s his- torical data for similar loans. Discount rates were based on the Treasury Yield Curve at the date of the analysis, with an adjustment which reflects the risk and other costs inherent in the loan category. In certain cases, where recent experience was available regarding the sale of loans, this information was also incorporated into the fair value estimates. 

Non-accruing loans covered by a specific loan loss allowance were viewed as immediate losses and were valued at zero. Other non-accruing loans were arbitrarily assumed to be repaid after one year. Presumably this would occur either because loan is repaid, collateral has been sold to sat- isfy the loan or because general reserves are applied to it. The principal of non-accruing loans not covered by specific reserves was discounted for one year at the going rate for similar new loans. 

## Deposits 

The estimated fair values of demand deposits and savings accounts, which are the deposits with no defined maturities, equal the amount payable on demand at the reporting date. For deposits with stated maturities, but that reprice at least quarterly, the fair values are also estimated to be the amount payable at the reporting date. 

The fair values of fixed rate deposits with stated maturities, are based on the present value of the future cash flows expected to be paid on deposits. The cash flows are based on contractual maturities; no early repayments are assumed. Discount rates are based on the LIBOR yield curve. The esti- mated fair values of total deposits exclude the fair value of core deposits intangible, which represent the value of the customer relationship meas- ured by the values of demand deposits and savings deposits that bear a low or zero rate of interest and do not fluctuate in response to changes in interest rates. 

Substantially all swaps currently held by the Corporation form part of structured broker CD’s. In these instruments a fixed rate CD is matched with a swap of the same rate and maturity, thereby converting the fixed rate broker CD to a floating rate instrument which reprices quarterly based on a fixed differential to three month LIBOR. The swaps are record- ed at fair value with a corresponding adjustment to CD’s, therefore, for purposes of fair value analysis, these structured broker CD’s are valued at book. 

## Federal funds, securities sold under agreements to repurchase and other short-term borrowings 

Federal funds purchased, repurchase agreements and other short-term borrowings are mostly borrowed funds, which reprice at least quarterly, and their outstanding balances are estimated to be their fair values. Where longer commitments are involved, fair values are estimated in the same way as fixed terms deposits. 

## Advances from FHLB, notes payable and subordinated notes 

The fair value of notes payable and subordinated notes with fixed maturi- ties was determined using discounted cash flow analysis over the full term of the borrowings. The cash flows assumed no early repayment of the bor- rowings. Discount rates were based on the LIBOR yield curve. Variable rate debt securities reprice at intervals of three months or less, therefore, their outstanding balances are estimated to be their fair values. 

## Interest rate swaps 

The fair value of the interest rate swaps were provided by the brokers who created them. 

