When we refer to the financial statements of Chemical Financial Corporation we can clearly see on page 92 as to how the Available for sale securities are recorded on fair value based on a three-level hierarchy established by GAAP. The company  records it available for sale securities as per Level 2 which is defined in the company’s Annual report as follows:

“Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Valuations are obtained from a third-party pricing service for Level 2 investment securities.”

Now let calculate the Original cost of available for sale securities as of 31 December 2012 .As per Note 3 of the financial statements the Market value of Available for sale securities is $586,809(in thousands) as discussed in class to arrive at the original cost of available for sale security we need to deduct the unrealized gains and in case of a unrealized loss we need to add it back   .As per the financial statements the original cost is   $580,234(in thousands) with an unrealized gain of $6575 (in thousands)

Since 1996 the mergers and acquisitions of the company are as follows:

1 branch of TCF financial corporation in 1998

1 branch of Standard Federal Bancorporation, Inc in 1998

2 branches of Old Kent Financial Corporation in 2000

Shoreline Financial Corporation in 2000

4 Branches of Fifth Third Bancorp in 2001

Bank West Financial Corporation in 2001

Caledonia Financial Corporation in 2003

2 Branches of First Financial Bancorp in 2006

O.A.K. Financial Corporation in 2010

21 Branches of Independent Bank Corporation in 2012

( Source: http://www.snl.com/irweblinkx/corporateprofile.aspx?IID=100200)