Investment Securities

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and estimated fair value of investment securities at September 30, 2016 and December 31, 2015 are summarized as follows (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses	Fair Value
September 30, 2016
Available-for-Sale:
U.S. Treasury notes	$	44,892	1,019		—	45,911
U.S. Agency notes	107,819		1,174		30	108,963
U.S. Agency mortgage-backed securities	49,753		606		37	50,322
Municipal securities:
Non-taxable	115,493		2,227		44	117,676
Taxable	19,673		599		2	20,270
Mutual funds	2,517		2		11	2,508
Trust preferred securities	49		—		—	49
Equity securities	632		67		7	692
	$	340,828	$	5,694	131	346,391
Held-to-Maturity:
Municipal securities:
Non-taxable	31,965		821		23	32,763
Taxable	10,072		44		—	10,116
	$	42,037	865		23	42,879
December 31, 2015
Available-for-Sale:
U.S. Treasury notes	$	72,672	309		135	72,846
U.S. Agency notes	140,876		164		1,151	139,889
U.S. Agency mortgage-backed securities	29,608		174		404	29,378
Certificates of deposit	248		1		—	249
Municipal securities:
Non-taxable	103,900		1,713		134	105,479
Taxable	26,738		337		134	26,941
Mutual funds	2,517		—		51	2,466
Trust preferred securities	49		1		—	50
Equity securities	659		40		19	680
	$	377,267	2,739		2,028	377,978
Held-to-Maturity:
Municipal securities:
Non-taxable	22,233		95		97	22,231
Taxable	400		—		1	399
	$	22,633	95		98	22,630

Information concerning investment securities with gross unrealized losses at September 30, 2016 and December 31, 2015, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (dollars in thousands):

	Less than Twelve Months			Twelve Months or Greater
	Fair Value		Unrealized Losses	Fair Value		Unrealized Losses
September 30, 2016
Available-for-Sale:
U.S. Treasury notes	$	4,008	—	$	—	—
U.S. Agency notes	11,891		30	—		—
U.S. Agency mortgage-backed securities	5,164		11	3,761		26
Municipal securities:
Non-taxable	6,926		41	1,602		3
Taxable	501		—	450		2
Mutual funds	—		—	272		11
Trust preferred securities	49		—	—		—
Equity securities	81		7	—		—
	$	28,620	89	$	6,085	42
Held-to-Maturity:
Municipal securities:
Non-taxable	$	—	—	2,641		23
Taxable	—		—	—		—
	$	—	—	$	2,641	23
December 31, 2015
Available-for-Sale:
U.S. Treasury notes	$	32,854	75	$	4,846	60
U.S. Agency notes	104,053		1,000	9,869		151
U.S. Agency mortgage-backed securities	19,190		256	4,068		148
Municipal securities:
Non-taxable	13,124		74	7,037		60
Taxable	15,601		114	880		20
Mutual funds	1,215		17	268		34
Trust preferred securities	—		—	—		—
Equity securities	248		12	73		7
	$	186,285	1,548	$	27,041	480
Held-to-Maturity:
Municipal securities:
Non-taxable	$	832	3	$	3,426	94
Taxable	399		1	—		—
	$	1,231	4	$	3,426	94

Management has determined that the unrealized losses at September 30, 2016 are primarily due to fluctuations in market interest rates and do not reflect credit quality deterioration of the securities.   Because LCNB does not have the intent to sell the investments and it is more likely than not that LCNB will not be required to sell the investments before recovery of their amortized cost bases, which may be at maturity, LCNB does not consider these investments to be other-than-temporarily impaired.

Contractual maturities of investment securities at September 30, 2016 were as follows (in thousands).  Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations.

	Available-for-Sale			Held-to-Maturity
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	27,119	27,161	3,640	3,643
Due from one to five years	120,742		122,761	4,154	4,159
Due from five to ten years	135,686		138,587	11,073	11,297
Due after ten years	4,330		4,311	23,170	23,780
	287,877		292,820	42,037	42,879
U.S. Agency mortgage-backed securities	49,753		50,322	—	—
Mutual funds	2,517		2,508	—	—
Trust preferred securities	49		49	—	—
Equity securities	632		692	—	—
	$	340,828	346,391	42,037	42,879

Investment securities with a market value of $195,448,000 and $215,952,000 at September 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes required as permitted by law.

Certain information concerning the sale of investment securities available-for-sale for the three and nine months ended September 30, 2016 and 2015 was as follows (in thousands):

	Three Months Ended   September 30,			Nine Months Ended   September 30,
	2016		2015	2016		2015
Proceeds from sales	$	25,723	—	$	62,252	54,955
Gross realized gains	307		—	978		345
Gross realized losses	—		—	21		13

Realized gains or losses from the sale of securities are computed using the specific identification method.