Investment Securities

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and estimated fair value of investment securities at March 31, 2017 and December 31, 2016 are summarized as follows (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
March 31, 2017
Available-for-Sale:
U.S. Treasury notes	$	33,236	$	102	$	33	$	33,305
U.S. Agency notes	91,911		137		1,723		90,325
U.S. Agency mortgage-backed securities	69,162		79		1,273		67,968
Municipal securities:
Non-taxable	113,180		640		1,334		112,486
Taxable	19,189		224		62		19,351
Mutual funds	2,536		—		45		2,491
Trust preferred securities	49		—		—		49
Equity securities	632		75		6		701
	$	329,895	$	1,257	$	4,476	$	326,676
Held-to-Maturity:
Municipal securities:
Non-taxable	$	33,279	$	103	$	368	$	33,014
Taxable	5,176		—		178		4,998
	$	38,455	$	103	$	546	$	38,012
December 31, 2016
Available-for-Sale:
U.S. Treasury notes	$	28,180	$	41	$	76	$	28,145
U.S. Agency notes	87,098		150		1,848		85,400
U.S. Agency mortgage-backed securities	72,402		89		1,444		71,047
Municipal securities:
Non-taxable	114,064		574		1,623		113,015
Taxable	19,710		220		85		19,845
Mutual funds	2,527		—		45		2,482
Trust preferred securities	49		—		1		48
Equity securities	632		55		10		677
	$	324,662	$	1,129	$	5,132	$	320,659
Held-to-Maturity:
Municipal securities:
Non-taxable	$	31,015	$	56	$	352	$	30,719
Taxable	9,988		—		217		9,771
	$	41,003	$	56	$	569	$	40,490

Information concerning investment securities with gross unrealized losses at March 31, 2017 and December 31, 2016, 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
March 31, 2017
Available-for-Sale:
U.S. Treasury notes	$	11,090	$	33	$	—	$	—
U.S. Agency notes	77,741		1,723		—		—
U.S. Agency mortgage-backed securities	62,000		1,145		3,393		128
Municipal securities:
Non-taxable	58,461		1,334		301		—
Taxable	8,957		59		450		3
Mutual funds	1,211		37		280		8
Trust preferred securities	49		—		—		—
Equity securities	42		6		—		—
	$	219,551	$	4,337	$	4,424	$	139
Held-to-Maturity:
Municipal securities:
Non-taxable	$	19,061	289		2,586		79
Taxable	3,122		178		—		—
	$	22,183	$	467	$	2,586	$	79
December 31, 2016
Available-for-Sale:
U.S. Treasury notes	$	16,076	$	76	$	—	$	—
U.S. Agency notes	69,784		1,848		—		—
U.S. Agency mortgage-backed securities	64,564		1,310		3,518		134
Municipal securities:
Non-taxable	72,867		1,621		451		2
Taxable	9,721		82		450		3
Mutual funds	1,205		37		277		8
Trust preferred securities	49		1		—		—
Equity securities	201		10		—		—
	$	234,467	$	4,985	$	4,696	$	147
Held-to-Maturity:
Municipal securities:
Non-taxable	$	20,429	$	251	$	2,564	$	101
Taxable	8,030		217		—		—
	$	28,459	$	468	$	2,564	$	101

Management has determined that the unrealized losses at March 31, 2017 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 March 31, 2017 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	$	11,856	$	11,925	$	6,035	$	6,043
Due from one to five years	117,046		117,557		4,108		4,070
Due from five to ten years	121,065		118,832		10,365		10,142
Due after ten years	7,549		7,153		17,947		17,757
	257,516		255,467		38,455		38,012
U.S. Agency mortgage-backed securities	69,162		67,968		—		—
Mutual funds	2,536		2,491		—		—
Trust preferred securities	49		49		—		—
Equity securities	632		701		—		—
	$	329,895	$	326,676	$	38,455	$	38,012

Investment securities with a market value of $185,788,000 and $149,990,000 at March 31, 2017 and December 31, 2016, respectively, were pledged to secure public deposits and for other purposes required or as permitted by law.

Certain information concerning the sale of investment securities available-for-sale for the three months ended March 31, 2017 and 2016 was as follows (in thousands):

	Three Months Ended   March 31,
	2017		2016
Proceeds from sales	$	—	$	20,429
Gross realized gains	—		371
Gross realized losses	—		—

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